The halfway point of the year presents a valuable opportunity for businesses to conduct a mid-year financial check-up. This is more than just good practice—it’s a strategic move that helps organizations stay on course, identify areas for improvement, and ensure compliance before year-end deadlines approach. At the heart of this review lies one of the most critical elements of financial management: bookkeeping.
Here are five essential bookkeeping tasks you should prioritize now to maintain financial health and make smart decisions for the remainder of the year.
1. Reconcile Bank and Credit Card Statements
One of the most fundamental yet often overlooked tasks is the reconciliation of bank and credit card statements. Matching your bookkeeping records with financial institution statements ensures that all transactions have been properly recorded and categorized. Discrepancies, if left unchecked, can lead to significant reporting errors or even missed instances of fraud.
By reconciling accounts mid-year, you validate the accuracy of your financial data and lay the groundwork for a smoother year-end closing process. This step is crucial for producing accurate financial statements and for preparing future budgets based on reliable figures.
2. Review and Categorize Expenses Properly
Proper expense categorization is essential for maintaining clean financial records, optimizing tax deductions, and gaining clarity on your company’s financial health. A mid-year review allows you to reclassify or adjust miscategorized expenses that may have gone unnoticed earlier in the year.
Evaluate recurring expenses, eliminate redundant costs, and flag any unusual charges for further investigation. Categorizing expenses correctly now also improves your ability to generate insightful reports that drive strategic decision-making for the remainder of the fiscal year.
3. Assess Accounts Receivable and Payable
Maintaining a healthy cash flow requires active monitoring of your accounts receivable (AR) and accounts payable (AP). Start by reviewing outstanding invoices—are there clients with overdue balances? Send out reminders or follow up on late payments to improve cash inflows.
On the payables side, check if there are any vendor bills nearing their due dates or discounts for early payment that could benefit your business. Keeping AR and AP in check ensures smoother operations and helps avoid liquidity issues in the second half of the year.
4. Evaluate Your Budget Against Actuals
Your budget was likely set at the beginning of the year based on forecasts and assumptions. Now that half the year has passed, compare your budgeted figures against actual performance. Look for significant variances and try to understand their causes—whether due to external market factors, internal mismanagement, or unexpected opportunities.
This exercise not only gives you insight into the effectiveness of your budgeting process but also allows you to recalibrate your financial plan for the next six months. Updating your budget now can help optimize spending and improve your ability to hit year-end targets.
5. Ensure Tax Compliance and Prepare for Year-End
Tax season may seem far off, but mid-year is the perfect time to review your tax obligations and make sure your records are in order. Ensure that all payroll filings, sales tax submissions, and estimated tax payments are up to date. It’s also a good time to review potential deductions or credits you may want to leverage come tax time.
By getting a head start on year-end tax planning, you reduce the risk of last-minute surprises and allow your tax advisor to offer more strategic advice while there’s still time to act on it.
Ready to take control of your financial health? At A Better Business Solution, we help you streamline your bookkeeping and stay ahead of the curve. Our expert team offers personalized, reliable, and detail-oriented support to ensure your records are accurate, compliant, and ready for strategic decision-making. Contact us today to schedule your mid-year financial check-up and position your business for a strong year-end finish.