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The Importance of a Mid-Year Check-in with Your Accounting Team

by | Aug 31, 2022 | Business

Team Discussing

It’s typical for businesses to wait until the end of the year or tax season to check in with their accounting team. But by then, it’s too late to make any course corrections that could have improved your bottom line. It’s also the busiest time for your accounting team, which is wrapped up in closing books and preparing for tax filings.

The true value of your accounting team is the guidance they can provide throughout the year to help you manage your profits and your personal income. To get the most value out of your accounting team, it’s crucial to check in several times a year, or at the very least, for a mid-year review.

Here’s what a mid-year check-in with your accounting team seeks to accomplish:


Year-Over-Year Numbers

Comparing year-over-year numbers provides a primary measure of how your business is doing. It’s essential to see if your revenues and profits are increasing, decreasing, or staying flat. If a lot has changed since last year – i.e., more customers, significant business investments, new products, etc. – it may not be a meaningful comparison. However, if the numbers are lower or flat over the prior year, especially in contrast to the industry, that would be a red flag that needs to be explored.

The Numbers vs. Your Goals

The more meaningful comparison is your midyear numbers versus your goals. This is your reality check to determine if you were too optimistic or pessimistic in your goal planning. You will need to take note of where you are behind and where you are ahead, as well as where you stand in relation to your end-of-year destination. Then you and your accounting team will need to take a deep dive into assessing your goals and progress to determine what can realistically be addressed by yearend.

Your Actual Spending with the Budget

If you are not on track to meeting your cash flow projections or working towards your profit goal, your spending may be the culprit. Your income and cash flow statements will most likely tell you where you may be spending too much on day-to-day operating expenses, debt service, or marketing. Have your accounting team look for expenses that can be reduced or eliminated to increase your profit margin immediately.

Your Cash Flow with Projections

If you’re like most business owners, you probably keep a close eye on your cash flow. However, your midyear review is an opportunity to recalibrate your projections based on what you know now. If you anticipate accelerated growth this year, you could run into a cash flow crunch when you need to hire staff or purchase more inventories. Now would be the time to meet with your accounting team to help you prepare for a line of credit or arrange other financing.

Your cash flow can also be impacted by slow receivables or uncontrolled payables. This is where working with your accounting team to implement efficient cash management tools can have a significant impact. Now would be the time to install systems to streamline both processes and optimize their timing, aiming to ensure that an optimal level of cash always remains in the business.

Assess Your Goals

Time passes quickly when running a business, making it challenging to keep your eye on the big picture. The midyear review is an opportunity to take a step back and take stock of where your business is versus where you expected it to be based on your goals for the year. Goals should be quantified so it is easy to gauge whether or not you are on track. Wherever you are in relation to your goals, your circumstances may have changed enough to make it necessary to adjust your goals or reprioritize them to focus on what’s most important from this point forward.

Update Your Finances

Changes in your personal finances could have an impact on your tax picture. If your income is creeping up to higher tax brackets, you may miss opportunities to mitigate it if you wait until yearend or tax season. A mid-year review is the best time to review your finances with your accounting team to begin looking for credits and deductions that can offset any tax increases. Also, if your personal circumstances change, such as marital status or childbirth, your accounting team can update your plan.

Next Steps

Once you complete your financial checkup, you and your accounting team will better understand how your business is doing and its progress towards your goals. It’s not at all uncommon for businesses to have to change course midstream. A part of the midyear review process is to reinvent based on what you know, which is why it’s essential to seek the guidance of your accounting team.

If you’re interested in working with an accounting team who aim to keep you on track—no matter what the complexity or time of year—we encourage you to reach out and schedule a call with our team to discuss your opportunities with Trivium Point Advisory.

*The LPL Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.

Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.. Trivium Point Advisory and LPL Financial are separate entities. Tax and accounting related services offered through Trivium Point Advisory LLC, DBA Trivium Point Advisory, LLC. Trivium Point Advisory is a separate legal entity and not affiliated with LPL Financial. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for individualized tax or legal advice. Please consult your legal advisor regarding your specific situation. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

LPL Financial does not offer tax or legal advice or services

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

This article was prepared by Lexicon Advisor Marketing. This article was prepared for Trivium Point Advisory’s use.

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