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Midyear Budget Checkup: Key Areas to Review for Business Success

 

It’s hard to believe it’s already the beginning of July! This is the perfect time to perform a midyear budget checkup to evaluate your business performance and make any necessary adjustments for a successful year-end. Here are some key areas to focus on:

Year-to-Date Expenses and Revenue Alignment

    • Review Your Projections: Are your year-to-date expenses and revenue aligning with your initial projections?
    • Sales Goals: Have you met your sales goals? If not, analyze why.
      • Did your restaurant close for a week due to a burst pipe?
      • Did you over-project sales?
      • Did you introduce new products earlier than planned?
    • Action Steps:
      • Eliminate unprofitable products or services.
      • Ensure correct pricing.
      • Verify that your marketing and sales plans are being followed.
      • Adjust based on insights.

Cash Flow

    • Assess Your Cash Flow: Check for any cash flow shortages due to supply cost fluctuations and slow-paying customers.
    • Cash Flow Analysis:
      • Detect any collection issues.
      • Consider revisiting vendor relationships or adjusting pricing.
    • Accounting Software: Use reports to review inventory costs, vendor payments, and customer collections.
    • Customer Payment Terms: Check average payment days and adjust terms to improve collections if necessary.

Tax Adjustments

    • Tax Law Changes: Evaluate any recent changes in tax laws.
    • Capital Expenditures: Review plans for capital expenditures.
    • Quarterly Tax Payments: Track and adjust quarterly tax payments as needed.
    • Consult with a Tax Preparer: Schedule a meeting to discuss your business needs.
    • Further Reading: For more information, check out the IRS recommended reading for small businesses.

Hiring More Help

    • Consider All Costs: Beyond salaries, factor in office and training expenses.
      • Do you need new phones, desks, chairs, or computers?
      • How much training is required and what are the associated costs?
    • Office Space and Supplies: Ensure you have enough space and supplies to accommodate new staff.
    • Employment Tax Forms: For detailed information on employment tax forms, visit the IRS Employment Tax Forms page.

Conclusion

Conducting a midyear budget checkup is essential for driving growth and ensuring a successful year-end. By focusing on key areas like year-to-date expenses, cash flow, tax adjustments, and hiring needs, you can set your business up for success.

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