Let’s take a mid-year look at your business goals

Whether in life or in business, a part of setting goals is evaluating mid-way how you’re doing on reaching those goals. In January, I challenged you to use your financial records to help you set your goals for your business.

Flash forward to now. It’s June already! Can you believe it? That also means we are halfway through the year and it’s time to check in on those lofty goals we set in January. What’s great about using financial records to set your goals is, you have a quantifiable way of revisiting your goals instead of just going by feeling. Looking at concrete numbers will tell you for certain how your business is faring.

Let’s look at this step-by-step and if you need help, you know who to ask!

Pull up your reports

Most of my clients use QuickBooks Online or Xero so these directions are based on that premise. If you use a different accounting software, follow the path you usually take to find the same reports I’m about to describe below.

For QBO users, here is your process:

• Go the Reports option on the left side of your screen.

• Select the Profit/Loss by month report

• Change the reporting period to “This year to last month” and click “Run.”

For Xero users, do this:

Go to Accounting (top menu) and choose “Income Statement

• Click on “Show Date Range”

• Change the date range to January 1 to May 31

• Change “Compare With” to “Previous month”

• Change “Compare Periods” to “Previous 5 periods” and click “Update”

For any other accounting software, run a Profit & Loss or Income Statement for year-to-date by month.

Examine your income

Look at each line month-by-month and make sure you note several things. First, which month had the highest income? Next, which month had the lowest income? For both of those, determine the “why.” For example, January is always my busiest month because I’m doing so much year-end accounting for clients.

Examine your expenses

Now, let’s look at your expenses month-to-month so far. Use the same technique and figure out which month had the least expenses and then which month had the highest final expenses. Determine why for both. For example, did you have to make a large insurance payment one month so that pushed that month into the highest expenses paid category? On the same token, if you notice one month seems especially low on expenses, make sure you didn’t miss paying something or didn’t simply miss recording it.

 Compare to your goals

Now, take the information about your income and expenses and compare it to your goals. Are you reaching the monthly goals you thought you would? Why or why not? What products or services are performing better than you anticipated? What is not performing as well as you had hoped?

Use this updated information to map out your business for the rest of the year. You can use this data to determine where your marketing efforts need to be, where you can potentially cut back on expenses, or where in your business you can continue just as you are.

Need help?

Most of my clients aren’t fans of running reports. That’s why they have me! I can help you run these reports and better yet, help make sense of them. Let’s discuss how hiring a bookkeeper to help maintain your books is a key part of reaching your business goals.