Half-Year Accounts: What to Review at the End of June
The end of June is the halfway mark of the calendar year, and it is the perfect moment to look at your books before summer pulls your attention elsewhere. A half-year accounts review does not need to be a giant project. With a clear list and an afternoon set aside, you can catch errors, spot trends and walk into July knowing exactly where your business stands.
Key takeaways
- Start with the basics: reconcile every bank and card account to 30 June before you read any report.
- Chase old invoices, check what you owe, and record accrued expenses so your half-year profit is honest.
- Compare the first six months with your budget and with last year, then adjust the plan for the second half.
- Use the review to prepare for July deadlines, such as US quarterly payroll returns and the UK second payment on account.
Most owners only look closely at their accounts when something forces them to, such as a tax deadline or a worrying bank balance. A half-year review flips that around: you look at the numbers while there are still six months left to change the outcome. A quick note before we begin: this is general information about bookkeeping and planning, not accounting, tax or legal advice. Rules vary by country and business type, so check anything specific with a qualified accountant.
Why the end of June is a smart checkpoint
If your financial year runs with the calendar, 30 June is the exact midpoint. If your year ends at another date, June is still a natural pause: the first half of the calendar year is behind you, many businesses are entering a quieter or a busier season, and several tax and payroll deadlines land in July.
A mid-year review gives you three things you cannot get in December:
- Time to fix problems. A pricing issue found in June can still improve this year's profit. Found in December, it only explains a bad year.
- Clean books for later. Year-end is far easier when the first six months are already reconciled and checked.
- Better decisions now. Hiring, buying equipment, raising prices or cutting costs all go better when they rest on current numbers.
Pro tip
Put the review in your calendar for the first working days of July, once June's bank statements are available. Call it a meeting with your business and treat it like one you cannot move.
Step one: get the books clean and complete
Reports are only as good as the records behind them. Before you look at profit or trends, make sure the first six months are complete and accurate.
- Reconcile every account to 30 June. Match each bank account, credit card, payment processor and loan account in your bookkeeping system to the statement balance. Investigate any difference, however small.
- Clear uncategorized transactions. Most bookkeeping tools have a suspense or "ask my accountant" bucket. Empty it. Unknown items hide both errors and missed expenses.
- Match receipts to spending. Check that larger purchases have a receipt or invoice attached, especially anything you plan to claim as a business expense.
- Separate personal and business items. If anything personal slipped through the business account, record it correctly as an owner's drawing or a loan to the business, as your accountant advises.
- Check fixed assets. Make sure equipment, vehicles or computers bought this year are recorded as assets where appropriate, not buried in general expenses.
If you use leased equipment or premises, note the agreements too. Under IFRS 16 and US GAAP (ASC 842), most leases appear on the balance sheet, though small private businesses should confirm the treatment that applies to them with their accountant.
Step two: review what you are owed and what you owe
Once the books are clean, look at the money moving in and out that has not settled yet. This is where many small businesses quietly lose cash.
Accounts receivable
Run an aged receivables report, which groups unpaid invoices by how long they have been outstanding. For each overdue invoice, decide on one action: a friendly reminder, a phone call, a payment plan or, for very old items, a conversation with your accountant about whether it is still collectable. Also check for invoices you meant to send but never did. Unbilled work is one of the most common leaks in service businesses.
Accounts payable
Look at the bills you owe. Are any overdue? Are any suppliers offering early payment discounts you could use? Are there duplicate bills or payments? Then check your subscriptions: six months is long enough to see which software and services you actually use.
Accrued expenses
Accrued expenses are costs you have incurred but not yet paid, such as staff hours worked in late June but paid in July, or a utility bill that covers June but arrives later. They sit on the balance sheet as a liability. If you keep accrual-based books, recording them gives you a truer half-year profit. If you use cash accounting, keep a simple list anyway so you know what is coming out of the bank next month.
Common mistake
Reading a strong half-year profit and spending against it, while a stack of unpaid supplier bills, unrecorded wages and a tax payment sit just around the corner. Profit and cash are not the same thing. Always check the bills and liabilities before you celebrate.
Step three: read your profit and loss with fresh eyes
Now pull a profit and loss statement (also called an income statement) for 1 January to 30 June. Put three columns side by side: this year's first half, your budget for the same period and last year's first half if you have it.
Work through it from top to bottom with these questions:
- Revenue. Is it above or below plan? Which products, services or clients drove the difference? Is any single client now a worryingly large share of sales?
- Cost of sales and gross margin. Did materials, stock or subcontractor costs rise faster than your prices? A slipping gross margin is often the first sign that a price review is overdue.
- Overheads. Which costs grew the most? Rent, software, marketing, insurance and professional fees are worth a line-by-line look.
- One-off items. Strip out unusual income or expenses so you can see the underlying trend.
- Net profit. Is it on track for your full-year goal? If not, by how much do the next six months need to improve?
If you sell products, add a quick look at inventory turnover, which is cost of goods sold divided by average inventory. A falling number means stock is sitting on shelves longer, tying up cash you could use elsewhere.
Step four: check cash, debt and break-even
The balance sheet and your bank balance tell a different story from the profit and loss, and you need both.
Cash position
Write down your cash at 30 June, then list the big known payments for the next three months: tax bills, payroll, rent, loan repayments, stock orders and annual renewals. Subtract them from your cash plus the receivables you realistically expect to collect. If the answer is uncomfortably small, you have time to act now: chase invoices harder, delay a purchase or talk to your bank before a crunch, not during one.
Debt and lender ratios
If you have business loans, check the balances against lender statements and note any upcoming rate resets or renewals. If you might borrow in the second half, calculate your debt service coverage ratio (DSCR): net operating income divided by total debt payments.
Break-even point
Your break-even point in units is fixed costs divided by price minus variable cost per unit. Recalculate it with your actual first-half costs. If overheads crept up, your break-even point did too, and the sales target for the second half may need to rise with it.
Hypothetical example
Imagine Sam runs a small candle studio. In January she planned monthly fixed costs of $6,000, a price of $30 per candle and variable costs of $10 per candle, a break-even point of 300 candles a month. At the half-year review she finds rent and software rose, so fixed costs are now $7,000 a month. Her new break-even is $7,000 divided by $20, or 350 candles. Knowing this in July, she raises prices slightly on her best sellers and drops one subscription she no longer uses. All figures are made up for illustration.
Step five: get ahead of tax and payroll deadlines
The half-year review is a great time to line up the deadlines that land in July and later in the year. Exact rules depend on where you are, so treat this as a prompt to check, not a complete list.
- US employers: Form 941, the quarterly payroll return, is due by the last day of the month after the quarter ends. For the second quarter that is 31 July, moved to the next business day when it falls on a weekend. In 2027, 31 July is a Saturday, so plan for the following Monday and confirm on the IRS website.
- US sales tax: if you collect sales tax, check your filing schedule for each state and note that several states hold back-to-school sales tax holidays in late July or August.
- UK sole traders and partners: the second Self Assessment payment on account is due on 31 July. Check your HMRC online account for the amount and set the money aside now.
- UK employers: P11D forms reporting benefits in kind, such as company cars, are due by 6 July.
- Everyone: compare your profit so far with the tax you have set aside. If you are well ahead of plan, your tax bill will likely be bigger too.
A half-year accounts review template
Copy this table into a spreadsheet. Add one row per area you review, note what you found and give each action an owner and a date. The rows below are made-up examples.
| Area | What to check | Finding (example) | Action | Owner | Due |
|---|---|---|---|---|---|
| Bank reconciliation | All accounts match statements at 30 June | Card account off by $84 | Find and fix the missing transaction | Bookkeeper | 5 July |
| Receivables | Invoices over 60 days | 3 invoices, $4,200 in total | Call each client, offer a payment plan | Owner | 9 July |
| Gross margin | Margin vs budget | 2 points below plan | Run a pricing review on top 10 products | Owner | 23 July |
Keep the finished sheet with your June records. Next year, it becomes your starting point, and you will be able to see whether last year's fixes actually worked.
Turning the review into a second-half plan
A review is only useful if it changes what you do next. Finish your session by writing a short plan for July to December. Keep it to one page.
- Update the forecast. Replace the first six months of your budget with actuals, then re-forecast the remaining months based on what you now know.
- Pick three priorities. For example: lift gross margin, collect faster, and cut two unused subscriptions. Three is enough to focus on.
- Set a monthly check. A 30-minute monthly look at cash, receivables and margin keeps the second half from drifting.
- Book time with your accountant. Share the review and ask about tax planning, structure or equipment purchases before year-end, while there is still time to act.
Your half-year accounts checklist
- Reconcile every bank, card, processor and loan account to 30 June
- Clear uncategorized transactions and attach missing receipts
- Run aged receivables and act on every overdue invoice
- Review bills, subscriptions and accrued expenses
- Compare the half-year profit and loss with budget and last year
- Check gross margin and, if you sell products, inventory turnover
- List cash commitments for the next three months
- Recalculate break-even and, if you plan to borrow, DSCR
- Note July deadlines such as Form 941, P11D and payments on account
- Update the forecast and write a one-page second-half plan
Frequently asked questions
Do I need an accountant for a half-year review?
Not necessarily. Many owners can do the tidying and reading themselves with their bookkeeping software. An accountant is worth bringing in for tax planning, unusual transactions or if the numbers do not make sense. Sharing a clean review usually makes that conversation shorter and cheaper.
How long should a half-year review take?
For a small business with tidy books, two to four hours is often enough. If reconciliation has slipped, give it a full day or split it into two sessions: one to clean the books, one to read and plan.
What if the numbers look bad?
That is exactly why you do the review in June. A weak first half gives you six months to adjust prices, collect faster, trim costs or change your sales focus. Pick the one or two changes with the biggest impact and start this month.
Related reading
The bottom line
A half-year accounts review is simple: clean the books to 30 June, check what you are owed and what you owe, read the profit and loss against your plan, look hard at cash, and line up the July deadlines. Then turn what you learned into a short plan for the second half.
Block out an afternoon in the first week of July, open the template and work through it row by row. The business you run from July onward will be steered by real numbers, not by hope, and year-end will feel far lighter for it.
