Conducting a Mid-Year Financial Review: A Step-by-Step Guide  

Paul Crichton

Paul Crichton

Conducting a Mid-Year Financial Review: A Step-by-Step Guide  

Maintaining a clear financial perspective is vital for the health of any business. As we reach the midpoint of the year, it’s an excellent time for businesses to pause, reassess their financial position, and adjust strategies as necessary. This mid-year review can provide invaluable insights into your organisation’s financial health and illuminate the path to a flourishing future. At MMG Chartered Accountants, we understand the complexities of this process and are here to help. Let’s explore a step-by-step guide on how to conduct an effective mid-year financial review.  


Step 1: Revisit Your Budget  

As the first step in your mid-year review, it’s crucial to compare your projected budget to your actual figures. An innovative tool that can assist you in this endeavour is Fluidly. Designed for businesses using Xero or QuickBooks who require a holistic view of their finances, Fluidly makes use of machine learning to set expectations about your near-future cash position.  

Fluidly analyses when your customers will pay invoices based on their previous payment history. By integrating with QuickBooks and Xero, it reconciles all payments on your purchase ledger, including direct debits and regular payments, providing a daily estimate of your cash over a three-month period. With this information at hand, you can swiftly identify any discrepancies between your budget and your actual income and expenses.  


Step 2: Analyse Your Cash Flow  

Cash flow is the lifeblood of your business. Therefore, understanding your cash flow situation is critical. Review your cash inflows and outflows and compare this data against your forecast. Are there any unanticipated cash shortages or surpluses? Identifying potential cash flow issues early can help you navigate them before they become severe problems.  


Step 3: Assess Your Debt  

Review all debts, loans, lines of credit, and interest rates. If you’ve taken on additional debt during the first half of the year, calculate its impact on your financial status. It may be an opportune time to explore refinancing options, particularly if interest rates have dropped. Prioritising paying down high-interest debt can also free up additional cash flow in the future.  


Step 4: Evaluate Investments  

During your mid-year review, assessing your investments is critical. At MMG, we’ve partnered with Verus Wealth to assist in this area. Verus Wealth’s financial planners are equipped to guide businesses in making informed investment decisions, from utilising excess cash to understanding the risks and rewards of various investment options.  

This partnership extends beyond simply evaluating investments. Verus Wealth can offer expert advice on risk management strategies, tax planning, and retirement planning for business owners. This can include suggesting tax-efficient investment methods, setting up retirement plans, and implementing risk management strategies to protect your business.  

With the combined expertise of MMG and Verus Wealth, your mid-year financial review can help you gain invaluable insights into your investments’ performance and set the course for future financial success.  


Step 5: Review Tax Planning Strategies  

Tax planning can significantly impact your business’s bottom line. The strategic application of taxes could mean the difference between growth and stagnation. At MMG, we house a team of tax experts committed to helping you navigate these intricacies, and in particular, our Accounts and Tax manager, Ryan, is ready to assist.  


Ryan’s journey at MMG started with a traineeship straight out of school, fueled by his passion for numbers. Today, he is an ACCA qualified accountant, currently working towards becoming a Chartered Tax Advisor (CTA). His academic pursuit of tax specialisation has allowed him to incorporate the latest tax knowledge into his role at MMG, providing enhanced advice to our clients.  


Ryan’s story is testament to MMG’s commitment to nurturing talent and promoting continuous learning. Ryan and our skilled tax team are well-equipped to handle a variety of tax scenarios. This extends from filing tax returns to offering customised strategies, ensuring our clients minimise their tax liabilities while adhering to evolving tax laws.  


We believe in the power of expert guidance in achieving your financial goals. As part of your mid-year financial review, let MMG’s “tax eggsperts” help you review and optimise your tax strategies, setting your business on a prosperous path for the remainder of the year and beyond.  


Step 6: Reconsider Your Financial Goals  

Having reviewed your budget, cash flow, debt, investments, and tax strategy, you are now in a strong position to reassess your financial goals. Are they still relevant and achievable based on your current financial situation? If not, now is the time to reframe these goals and adjust your strategies accordingly.  


Step 7: Plan for the Future  

Having conducted your mid-year review, use this information to plan for the second half of the year. This may involve adjusting your budget, reworking your cash flow projections, paying down debt, reallocating investments, or rethinking your tax strategies. Your mid-year financial review should serve as a blueprint for the remainder of the year, guiding your decisions and setting your business on the path to financial success.  


Conducting a mid-year financial review may seem daunting, but it’s a vital exercise that can provide significant benefits. If your business lacks the resources or expertise to carry out this review effectively, MMG Chartered Accountants can help. Our team of experienced professionals can guide you through this process, providing the insights and advice you need to make informed financial decisions.  


Remember, staying proactive and regularly reviewing your business finances is key to staying ahead in this ever-changing business environment. When done correctly, a mid-year financial review can be a powerful tool in helping your business grow, thrive and achieve its financial goals.