The end of Q2 is fast approaching and for many business owners, it often arrives with a realisation that the year is moving much quicker than anticipated. That’s exactly why a business financial review before the end of Q2 is so valuable.
One minute you’re setting goals in January and the next you’re halfway through the year wondering where the time has gone. Between serving customers, managing staff, chasing invoices and handling day-to-day operations, it’s easy for financial admin to take a back seat.
Rather than waiting until year-end to discover issues, a mid-year review gives you the opportunity to identify problems early, improve cash flow and make more informed decisions for the months ahead.
Step 1: Start Your Business Financial Review By Looking Back On Q1
The first step in any business financial review is understanding how the first quarter of the year actually performed.
Many business owners work off instinct, which is often necessary when running a company. However, the numbers can sometimes tell a very different story.
What you should look at:
- Revenue compared to your targets
- New customers gained
- Repeat business levels
- Major expenses
- Any unexpected costs
We hear stories time and time again from local business owners who felt as though they’d had an incredibly busy Q1, only to discover that profit margins were actually lower than expected because of additional material costs or their supplier prices had suddenly increased.
Step 2: Check For Outstanding Tax Obligations
A business financial review should always include a tax compliance check.
Now is the perfect time to review whether everything is up-to-date.
Questions to ask yourself:
- Have all VAT returns been submitted?
- Are PAYE obligations up to date?
- Have CIS returns been filed correctly?
- Are there any upcoming HMRC deadlines that need planning for?
For many businesses, tax isn’t difficult because the rules are unclear, it’s difficult because there are so many competing priorities throughout the year. The common “I’ll deal with it next week” mentality often catches business owners out and very quickly transforms into a last-minute panic when a deadline suddenly appears.
A simple review now can help avoid penalties later.
Step 3: Reconcile Your Accounts Before Small Problems Become Big Ones
One of the most overlooked parts of a business financial review is reconciling bank accounts and credit card statements.
It’s not the most exciting task on the list, but it can uncover:
- Missing transactions
- Duplicate payments
- Incorrect expenses
- Forgotten subscriptions
- Unpaid invoices
The longer discrepancies remain unnoticed, the harder they become to resolve.
Be honest, have you ever discovered an old software subscription, duplicate payment or recurring expense that had been draining money for months without anyone noticing? These are often the easiest solutions to resolve and result in the biggest savings a business can make.
Step 4: Review Pricing, Profit Margins And Cash Flow
A strong business financial review isn’t just about looking backwards. It’s about making sure your business remains profitable moving forwards.
Many business owners haven’t reviewed their pricing in years and others thought they were generating strong turnover but discovered certain jobs or services were barely making a profit.
Meanwhile, supplier costs increase, fuel costs fluctuate, wages rise and overheads continue to grow. If prices stay the same whilst costs increase, profitability naturally suffers.
What to review:
- Your highest-margin services
- Your least profitable work
- Cash flow trends
- Future expenditure
Step 5: Plan Ahead For Growth And Future Costs
The final stage of your business financial review should focus on what’s coming next.
Many businesses spend time reviewing the past but very little time planning ahead.
Things to consider:
- Upcoming tax payments
- Planned investments
- Equipment purchases
- Recruitment plans
- Expansion opportunities
- Seasonal fluctuations
Many business owners that we speak to start thinking about growth before fully understanding their cash position, creating unnecessary pressure later on. Even a very basic forecast can help you make better decisions and reduce surprises later in the year.
How Accounts & Returns Can Help
A business financial review doesn’t need to be complicated, but it does need to happen.
At Accounts & Returns, we help sole traders, landlords, limited companies and growing businesses gain a clearer picture of their finances throughout the year, not just at year-end.
With branches across the UK and flexible fixed-fee packages available, we’re here to help make managing your finances simpler and less stressful.
The end of Q2 is the perfect opportunity to step back, review where your business stands and make sure you’re heading in the right direction.
If you’d like support with your next business financial review, get in touch with your local branch today.
