Mid-Year Saas Financial Checklist

It’s the middle of the year and you’re ready to dive into your saas financial status to help prepare yourself for the coming months. 

It’s important you are on track to meeting your year-end goals and are doing what it takes to avoid potential pitfalls that may come without much-needed mid-year maintenance. 

However, with so many areas that need to be evaluated, it can be tough to know where to start. To help, we’ve put together a mid-year Saas financial checklist to help you better understand your current finances and pointed to areas where making adjustments may be the key to helping you reach your financial goals. 

Compare Budgets to Actuals

At the mid-year point, you’ve collected enough information to take a detailed look at your expenses. As you know, the goal is for your actuals to be as close to your budget as possible. Now is the time to figure how close they actually are and make the necessary adjustments to get things (or keep things) on the right track. 

Here are a few potential situations you may need to work around: 

• Overspending: If you are overspending in certain areas, brainstorm ways to lower your expenses.
• Underspending: If you are underspending in certain categories, allocate your additional fund to areas that drive revenue, like marketing.
• On target: If you are on target with your spending, continue on the path you are headed and create an action plan in the case of unexpected expenses.

Utilize the information you’ve collected to this point to help you set your budget up for the rest of the year. It is a good indicator of what to expect in the following months. 

Compare Cash Flow Forecast to Actuals

Along with comparing your budget to actuals, you should also compare your cash flow forecast to actuals. This will tell you if your sales and margins are where you thought they would be. Similarly to your budget, you can use your cash flow forecast and actuals to make the needed adjustments to get things (or keep things) on track. 

The easiest way to align your cash flow forecast with your actuals for the rest of the year is to set accurate sales goals. If you look at your actuals and see there is no way to achieve what you originally expected, figure out where things aren’t going according to plan, and make the necessary improvements. You can also adjust your sales goals to better match your actuals. There’s a chance you overshot your goals, so for the remainder of the year, set and try to achieve more attainable goals. 

If you don’t have a cash flow forecast, you can compare this year’s sales to last year and evaluate that way. While it won’t provide the full picture as a complete forecast, it is a good place to start. In the future, consider putting together a full cash flow forecast so that this time next year you can give yourself a more accurate view of your sales and margins. 

Check on Tax Payments

Tax payments can sneak up on you and disrupt your finances if you are not careful. Here are a couple of potential situations you may run into: 

• Overpaying: Oftentimes you can pay too much for your taxes, which hurts your idea of how much cash is in your accounts. If this is you, send less for Q2 so you can improve the cash in the accounts.
• Underpaying: Paying too little is just as harmful, if not more, than paying too much for taxes. A large bill at the end of the year can really throw a wrench into your reporting. To avoid this, use your mid-year check to figure out how much you need to pay down your balance or catch up without completely breaking the bank.

Not sure where to find the money to make the payments? 

Go back to your budget and see if there are any areas where you can make cuts. This helps you make advantageous deductions and allows you to pay down your tax payments.  In addition, if you haven’t already, you should be budgeting for tax payments to avoid the unnecessary surprises that hurt your cash flow.

You should also look to see if there are any credits you qualify for such as the R&D tax credit. These can come up big in looking for ways to lower your total tax payments. 

Update Supplier and Contractor Records

At the mid-year point, you should already be deep in your contracts with your suppliers and contractors, but that doesn’t mean you can’t take a look at them to make sure things are in order. 

A frequent mistake is not sending 1099’s properly, which will result in unwanted fees. You can avoid these by making sure you have the right addresses, a completed W-9 form, and that you are being charged/charging the proper amount. With six months of data, it will be easy to see where there are gaps and what needs to be done to fix the information you already have. Doing this now will make it easier at year-end and potentially save you from unwanted and unexpected fees. 

Check-in with an Saas Financial Expert

Heading into the second half of the year means it’s crunch time. You need to start getting your bearings to find out where and how you can improve your finances for the rest of the year. Your mid-year saas financial checklist should include comparing your budget to actuals, comparing your cash flow forecast to actuals, checking on tax payments, and updating supplier and contractor records. 

It can sound like an overwhelming task on your own, which is why you should check in with an expert to answer your questions about current financials, upcoming taxes, or the future of the business. Founder’s CPA is the perfect choice if you are looking for a partner to help make more sense of your accounting practices. Schedule a free consultation with Founder’s CPA today to learn more!