As we have approached yet another midpoint of year, 2024, it is a crucial time for all the Accounting Aces. Though, it is easy to get engaged in day-to-day client meetings and focus on your accounting firm’s growth; yet, it is also that time of the year, when your focus must be on performing mid-year bookkeeping and accounting checks. It will help you ensure that all your client’s books are perfectly pristine and in excellent condition. As an accountant, you play a crucial role in helping your clients stay organised and make sound financial decisions based on the financial records and drive, toward their success.
In this blog post, we provide a walkthrough of some essential tips for mid-year bookkeeping that every accountant should know. It will help you ace your financial game. We will also focus on the benefits of bookkeeping outsourcing and outsourced accounting services to support your work this busy season.
Tips for Mid-year bookkeeping
1. Conduct a Thorough Financial Review
A thorough financial review ensures that all financial records are up-to-date with no errors, omissions, or discrepancies.
Reconcile the Bank Accounts
The key foundational aspect of effective bookkeeping is regularly reconciling the bank accounts. When the mid-year approaches, reconciliation of all bank accounts becomes imperative. You will be ensured that your client’s financial records are up to date, there are no discrepancies, or errors and the balances match with the bank statements. In case the balances are not matching you get enough time for corrections.
Access Outstanding Invoices and Payments
Mid-year is an excellent time to access and reconcile all your client’s accounts. Evaluate whether you have any outstanding invoices or any pending payments. If so, send the follow-up on the overdue accounts receivable. Check if all the invoices have been sent out. Similarly, review the accounts payable to manage the cash flows effectively and avoid any late payment penalties.
Financial Ratios for Analysis
Financial ratios help in analysing the company’s performance. Mid-year ratio analysis around will give you valuable insight into your client’s overall financial health of the business including liquidity, and solvency aspects. Early-stage identification of any potential issues will help your client to make necessary adjustments promptly.
Tip: Healthy cash flow is one of the fundamental aspects of a business. Utilise bookkeeping outsourcing services for regular and timely reconciliation of your client’s accounts including accounts receivable and payable processes. With the help of outsourced accounting services, you can ensure your clients maintain a healthy financial spectrum, by handling this task efficiently and reducing the risk of errors, while you focus on the growth of your business.
2. Update and Organise Financial Records
Leverage Technology and Digitize Records
Bookkeeping is no stranger to digitization. If you haven’t already explored and adopted new bookkeeping and accounting software or tools, mid-year is the prime opportunity for exploration and digitizing the records. Implementation automation will help to streamline your client’s bookkeeping process and elevate the accuracy and efficiency of their bookkeeping activities. While you say goodbye to manual data entry, you can also bid farewell to all the paperwork by digitizing your paper records. This can ease up the work of tracking, updating, and retrieving financial documents and preventing data loss with easy backup facilities at regular intervals.
Tip: An outsourced accounting service often has access to the latest technology and can integrate these tools into your processes, providing you with efficient and cost-effective solutions.
Categorize Transactions Correctly
Categorizing financial transactions is one of the key aspects of bookkeeping and financial reporting. In the mid-year review of your clients’ books check if all the transactions are categorised correctly including invoices, receipts, and expenses. This will help with the tax reporting process, as any misclassified transactions can lead to inaccuracy in the financial statements and potential problems with tax authorities.
Tip: Utilising bookkeeping and outsourced accounting services can help manage your financial records and accuracy in transaction categorization, ensuring they are always up-to-date and organized. This can free up your internal resources to focus on core business activities.
3. Review Budget and Financial Goals
Analyse Budget vs. Actuals
Revisit your client’s budgeted figures and compare them with their actual financial performance. This is essential as it will help you identify variances and give you an understanding of them. Based on these analyses you can help your client overcome these by making informed decisions for the remainder of the year through adjusting the budgets if required. It’s a proactive step to ensure your client’s business stays on track financially.
Set Realistic Financial Goals through effective forecasting
Mid-year review can help your client set realistic financial goals for the remaining months based on effective forecasting. Ensure that the goals set are SMART
Specific,
Measurable,
Achievable,
Relevant, and
Time-bound.
Clear goals will help your clients move ahead in a precise direction and motivate them to achieve financial targets.
Tip: An outsourced accounting team can provide valuable insights into budgeting and forecasting and offer recommendations for adjustments and improvements.
4. Prepare for Tax Season
Though it might seem that the busy season is far away right now, but we are nearly in the middle of tax season. So, a prudent accountant never leaves anything for the last minute.
Review Tax Liabilities
Mid-year is the best time to review your client’s tax liabilities and ensure that all the tax regulations are in compliance. It also helps in identifying tax-saving opportunities for your client that could be leveraged before the year’s end. Early planning will also ensure the necessary investments required for tax advantages, optimising deductions and making necessary adjustments if required to avoid any penalties due to underpayments.
Tip: Bookkeeping outsourcing services can help your clients stay compliant with tax regulations and ease the burden of tax preparation.
5. Improving Cash Flow Management
Regular monitoring of the cash flows helps in gaining financial stability.
Monitor Cash Flow Regularly
Cash flow is the most important metric for the evaluation of the financial health of your client. It can help in identifying any outstanding collection issues requiring immediate attention, and determining whether your client’s expenses are recorded correctly and they are on track to achieve their targets. It will also help identify the trends and predict future cash flow needs of your client if required. This proactive approach will help you enable your client to make informed decisions about their expenditures and investments.
Implement Cost-Saving Measures
Implementing cost-saving measures will help you identify those areas for your client. You can suggest corrective measures to your client to reduce unnecessary expenses and improve their cash flows and overall financial health of their companies, or whether they must adjust their budgets or secure additional financing.
Tip: Bookkeeping outsourcing can provide help you with providing detailed cash flow analysis and projections to your client and, helping them make informed decisions about their business finances.
6. Audit Internal Processes
Internal audit processes help in identifying whether there are any irregularities or inefficiencies in the financial processes. It’s an opportunity to tighten up controls and improve the accuracy of financial reporting.
Evaluate Internal Controls
Mid-year is the best time to evaluate your client’s book by conducting internal audits. It assures all the balances are in place without any errors, discrepancies, or fraudulent activities. Internal controls also increase the accuracy and reliability of your client’s financial reporting.
Tip: Outsourced accounting firms can conduct internal audits, providing an unbiased assessment of your client’s financial health and recommendations for improvements.
7. Stay Updated with Regulatory Changes
Staying ahead on the professional development curve is necessary for every accountant. It helps with knowledge expansion and bringing valuable insights into your client’s financial endeavors.
Monitor Changes in Accounting Standards
Every accountant must stay informed about any changes in accounting standards and regulations that can affect your bookkeeping practices. Adapting to new standards promptly ensures compliance and avoids potential legal issues for your client.
Attend Professional Development Courses
Investing your time in professional development is crucial. Attending seminars, workshops, and webinars, and delving into the latest trends and best practices can help in enhancing your knowledge and skills and making your role as an accountant more effective.
Tip: Outsourcing your processing can reduce errors and ensure compliance with the latest regulations, allowing you to focus on other critical aspects of your business.
Conclusion
Mid-year bookkeeping is a critical aspect of maintaining businesses financial health. Implementing these tips will help you ensure that your client’s financial records are accurate with better cash flow management, and a smoother year-end process. Also, providing value-added services to your clients, such as financial planning, budgeting advice, and tax optimising strategies. These services not only foster a healthy relationship with your clients but also pose you as a trusted advisor. Regular communication with clients by keeping them informed about their financial status during the mid-year will help in ensuring long-term business relationships.
For, providing these value-added services, you can leverage bookkeeping outsourcing and outsourced accounting services. It will help in enhancing your efficiency, reduce errors, and provide expert insights, allowing you to focus on growing your business.
Partnering with Corient means more than just outsourcing. Our wide range of services includes bookkeeping and accounting outsourcing, Tax, VAT, and payroll outsourcing, Let us handle the day-to-day financial tasks so you can focus on driving your business toward growth and success.
Stay proactive, stay organized, and make the most of the mid-year financial check-up! Contact us today!