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  • Why Mid-Year Financial Reviews Matter

    Posted by Natalie Paris on June 5, 2024 at 9:26 am

    Maintaining financial stability is paramount to your auto repair business. With the unpredictable twists and turns of entrepreneurship, it’s critical to conduct regular financial reviews to ensure that there aren’t any cracks in your foundation.

    When tax time rolls around, business owners are forced to examine their finances to confirm their annual revenue and file—or at least hand their information over to the professionals.

    However, as a bookkeeper who works in the automotive industry and has seen business owners navigate their finances blindly, I recommend reviewing your reports more than once a year.

    In this blog post, I’m sharing my perspective on why you should never skip your mid-year financial review when you’re focused on business growth.

    Benefits of a mid-year financial review

    As the middle of the year sneaks up on you, it’s critical to have a financial game plan to help you navigate the remaining months. When you’re aware of your financial situation, you’ll be much more likely to cross the 2024 finish line with a thriving auto repair business.

    Conducting a mid-year financial review clarifies your progress or regression thus far. This information is the guiding hand for making profitable decisions for the remainder of the year.

    It also gives insight into weaker areas of your business so you can make adjustments. This is your opportunity to identify which services, products, or employees are losing you money so you can pivot your strategy to improve your sales and profitability for the long term.

    Necessary documents for a mid-year review

    You’ll need access to several financial documents for a comprehensive review that will keep you well-informed year-round.

    You’ll examine everything from your sales, budgets, and expenses to your credit cards and loans. Understanding your spending and income patterns, along with any money owed, will paint a clear picture of your available funds so you can make investments, pay off debts, and optimize profits.

    Consider these key financial reports:

    • Income statements
    • Credit card statements
    • Balance sheets
    • Profit and loss statements
    • Cash flow statements

    To simplify your mid-year financial review, I recommend utilizing software such as Quickbooks Online. This records and organizes your financial documents for a faster, more efficient review. It also makes them accessible from anywhere!

    Why mid-year reviews are critical for growth in your automotive business (heading)

    While I believe mid-year reviews are an essential tool for businesses in every industry, auto repair shops experience specific financial hurdles.

    Here is a breakdown of two common struggles and how a mid-year review can help support your business through them.

    The struggle: seasonal fluctuations

    How mid-year reviews can help: The automotive industry may experience slower seasons with a significant dip in revenue. Conducting a mid-year review will help you identify those patterns, create a budget to align with lower income, and carry you through the lull in business.

    The struggle: inventory management

    How mid-year reviews can help: Whether you’re not stocking enough inventory or you’re purchasing parts that sit on the shelf, inventory management can throw a wrench in a healthy budget. Mid-year reviews give you deeper insight into inventory patterns so you can purchase more of what you need and less of what you don’t.

    Remember: it’s impossible to create an adequate budget and strategic decisions to move your business forward when you’re in the dark about your financial status. Conducting a mid-year review gives you the insight you need to do so!

    Natalie Paris replied 1 week, 6 days ago 1 Member · 0 Replies
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