Mid-Year Bookkeeping Check In
We’re in the last month of the second quarter, so half of the year is almost complete. It's time to review what is happening in your business and see if any adjustments are needed to meet your goals. Based on what you find, you can adjust to prepare for a change in taxes based on your profitability.
If you set a goal for the business in terms of revenue, how are you doing in relationship to that figure? If you are at 50% or better, that's great! How much over your goal are you? Is this going to impact your taxes? Do you need to alter your estimated tax payments (if you currently have to file) to avoid owing a large amount later?
Do you have excess cash on hand? Should you consider making equipment purchases you've been postponing to increase operational efficiency? Can you deposit funds into investment accounts for a higher rate of return or pay down debt?
Of course, talk to your CPA before making this decision to see if now is the best time to spend those dollars.
On the other hand, maybe you're finding that you aren't on track to meet your goal. This can be due to sales being lower than expected, costs higher than estimated, or a combination of the two.
Look at where you are spending money and see if there is a way to reduce some of these costs. There are expenses that are fixed (such as rent, insurance, payroll tax rates) but some costs can be adjusted by analyzing your spending to see where reductions can be put into place.
Contact vendors to see if you can get a discount for paying more quickly, see if there is a way to run a process more efficiently (and therefore reduce the time or costs associated with the task) or research if the rates you are charging for your products and/or services are too low and need to be increased.
Based on how far off your goal you are, you may want to look at your estimated tax payments and see if those can be reduced to keep more cash on hand. Schedule an appointment with your CPA to review your financial statements and determine if any changes should be made.
If you've been too busy to do your bookkeeping and you don't have this information handy, it may be time to consider partnering with a bookkeeping company to assist you. If you are overwhelmed with this task, we are here to help. Contact us at 310-534-5577 or contact@abandp.com. Let us give you peace of mind by removing this burden and allowing you to do the parts of the business you truly love!
