Q: The second quarter (2Q06) is about to end, what should I expect from our Accounting Manager / CFO?

A: The key to expert financial management is proactively planning for success by asking questions, analyzing data, and adjusting course to meet your goals. Take care of compliance issues, too, before they become obstacles to your success.

This is a critical time in the annual cycle of your business. In addition to recurring compliance tasks, the mid-point of your company’s year (for calendar year firms) means you have enough data to know how the year is shaping up, and plenty of time to make improvements. Don’t fall prey to a summer lull – take advantage of this opportunity.

1. Cash flow. No matter what time of year, your #1 priority should be to stay on top of cash flow.
2. Prepare to close the June books. First things first. Many of the items below depend on sound numbers through June 30th.
   • Prepare for quarterly compliance tasks. Common ones include:
   • Sales tax return
   • Payroll tax returns
3. Take care of your money people. Do you need to update your banker and/or investor(s) with YTD financial results?
4. Income tax planning
   • Last year’s income tax returns should be complete, all the way through year-end adjustments. If not, wrap them up so you and your financial team can focus on more important current issues.
   • If not done during last year’s tax preparation process, have a tax planning meeting with your CPA.
   • If a tax plan is in place, take a quick look to see if YTD financial results are in line with projections; if not, you might need to adjust your tax plan.
5. Update this year’s forecast
   • The big question is: will you meet your earnings targets? Yes, things have changed since you created this year’s budget. The question still remains. Hold you and your staff accountable.
   • To your financial results through June 30th, add your updated revenue and expense forecasts for the next six months. Again: will you meet your earnings targets?
   • Not sure whether to budget in QuickBooks or Excel? See Financial Think #31.
6. Plan for staff vacations. How will summer vacations affect productivity: marketing, sales, delivery, and administration? Don’t fall behind on key tasks and then play catch up for the rest of year; you’ll need your resources to meet or exceed year-end targets.
7. Warm up next year’s budget. Just jotting down a list of issues this month will start to build momentum for next year’s budget and reduce the likelihood of procrastination.
   • Do you forecast a big income tax payment in March or April of 2007?
   • Will your office lease, key equipment leases, or financing instruments expire?
   • Will your accounting software support your growth goals next year or are you looking at a conversion to a more robust system?
   • What kind of capital expenditures do you need to plan for? IT, furniture and fixtures, operating equipment, buildings, vehicles, etc.
   • What sort of staffing changes do you need to plan for?