A mid-year financial review is one sitting with your books that answers seven questions: is revenue on plan, are margins holding, who owes you money, what is payroll consuming, how long is your cash runway, are tax payments on pace, and what is quietly draining subscriptions. This guide is for owners who want that checkup now, while half a year is still fixable.
July is the best month of the year for this. You have six real months of data, and six more to act on what it says. In January, the same findings are history; in July, they are levers.
The mid-year financial review: 7 numbers to pull
1. Revenue against plan, by month
Not the total, but the shape. For example, six months that read flat, growing, or sliding tell three different stories, and averages hide all of them. If you never wrote a plan, compare against the same six months last year. The question is simple: is the trend the one you would choose?
2. Gross margin trend
Revenue up with margin down means you are buying growth. So check gross margin by month, and if you sell products or projects, check it by line. This is where the pricing decisions of the last year show their real effect, after costs moved.
3. Accounts receivable aging
Run the AR aging report and look at everything past 60 days. In other words, that is your money, interest-free, in someone else’s account. A mid-year collections push is uncomfortable exactly once; carrying stale receivables into Q4 is uncomfortable all season.
4. Payroll as a share of revenue
First, divide total payroll cost by revenue for the half. Of course, every industry has its healthy band, and the useful signal is your own drift: two points higher than last year deserves an explanation you actually believe, whether that is planned hiring or quiet creep.
5. Cash runway
Average your last three months of true operating outflow, then divide cash on hand by it. In practice, that number, in months, is the one to know before Q4 asks for inventory, staffing, or both. Our upcoming notes on Q4 planning build on exactly this figure.
6. Estimated tax pacing
Two federal payments are behind you, and the third lands September 15 per the IRS schedule. If the half-year profit is running well ahead of last year, this is the moment for your CPA to reset the remaining vouchers, not after a surprise in April. Our estimated taxes guide covers the schedule and the California wrinkle.
7. Subscription and software creep
Finally, pull six months of recurring charges and read the list cold. Software repriced aggressively this year, as our price history breakdown shows, and idle tools plus tier overshoot are the fastest savings most businesses have. Fifteen minutes here routinely funds a month of something useful.
What a passing grade looks like
Importantly, you do not need seven green lights. You need seven honest readings and one or two actions: a collections push, a price adjustment, a subscription cull, a voucher reset. The review fails only when it does not happen, because every one of these is cheaper to fix in July than in January.
One prerequisite, though: the review is only as good as the books underneath it. If reconciliations are months behind, the seven numbers are seven guesses. Catch up first; our cleanup guide explains what that takes.
How Books LA handles this
Our monthly clients get these numbers in their reports all year, so mid-year is a conversation, not a project. For everyone else, our bookkeeping review takes a current look at your books, flags exactly these seven areas, and starts at $495. Details on our services page.
Frequently asked questions
How long does a mid-year financial review take?
With reconciled books, an afternoon: the reports take minutes to run and the thinking takes the rest. With books that are months behind, the catch-up comes first, which is most of the work and most of the value.
Which reports do I actually run?
Profit and loss by month for the half, the same period last year, AR aging, and a balance sheet. Those four cover all seven checks. In QuickBooks Online or Xero, each is a standard report, no customization needed.
What if my revenue is fine but cash feels tight?
That combination usually points to receivables, inventory, or debt payments absorbing the profit. The AR aging and the runway calculation will show which. It is the most common mid-year finding we see, and the most fixable.
Should I reset my estimated taxes myself?
Instead, bring the numbers to your CPA; the recalculation is theirs to make. What you control is arriving with an accurate year-to-date profit figure, which is a bookkeeping deliverable, and the reason mid-year books need to be current.
Is July too late to fix a bad first half?
Rather the opposite; it is the last cheap moment. Price changes, collections, cost cuts, and staffing decisions made now show up in this year’s results. The same decisions in November barely move the year at all.
What does Books LA’s $495 review include?
A current-state look at your books: reconciliation status, categorization quality, and the health signals above, delivered as findings you can act on. If the books need cleanup first, you get a plain-language scope of what that takes before anyone commits to anything.
If you want the seven numbers without doing the digging, book a short call with Books LA.
This article is general information, not tax advice. Books LA provides bookkeeping services and does not provide income tax advice; we work with our clients’ CPAs on income tax matters.
