Sarah Prevost walks through a mid-year bookkeeping review to catch errors before year-end. Three common problems: data-entry misclassifications, unrecorded transactions, and reconciliation mismatches. Gather bank statements and receipts, reconcile accounts, compare profit-and-loss against last year, and fix mistakes immediately.
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Welcome back. Wow, business owners, can you believe it? It's mid-year. We're halfway through 2026. It's the perfect time to hit pause. Summer, it's quiet. And give your books a thorough checkup. It's mid-year, so why would you want to do this? But you want to look at your data overall and then look for any hiccups that are small right now that could turn into major hiccups at the end of the year. We really want to make sure that we keep all the headaches out of the way for year-end, and we still have plenty of time to do a course correction. So in this video, I'm going to walk you through why mid-year bookkeeping review is essential and what common discrepancies to look for and the best tools to use to look for them, as well as a step-by-step guide as to how to do it so that at year-end you feel confident that your finances are accurate and stress-free. So let's dive in. First of all, why bother with a mid-year review? It's summer. I want to have fun. I want to take time off. The weather is finally great. But really, It's crucial for you to look at your business financial health now, and it's a midpoint. It's a great time to assess performance, look for discrepancies early, and make those adjustments before it's too late. Catching errors now will prevent them from snowballing into major issues that could really mess up your financial statements and affect your taxes. Accurate books will mean better decision-making for you for the rest of the year. So if you're really leaving them and not really paying attention to them and not taking care of them along the way, how can you even plan for the future? How can you keep track of any goals you may have set and at least reflect back on maybe any forecasting that you did and maybe any budgeting that you did and align there? You really want to make sure everything looks good and that you're on course. So maybe you're investing in your growth, your firm's growth, or maybe you're planning strategically the rest of the year. You really want to have clean records that will give you peace of mind, and there'll be no more late-night worries about any hidden problems. A quick mid-year review is going to set you up for long-term stability and success. Now, what should you be looking for? Here are some 3 common discrepancies that may trip you up, even the best of businesses. Look for data entry errors, and this is as simple as if you're in an advanced file, go up into your gear and your tools and pull down the reclassify transactions. Set the date range to this year or this year-to-date, and look through each category to make sure that everything's in the right place. Maybe Amazon's all dumped into office supplies and it should be maybe small tools and equipment or in a different category. Look for things like that. Maybe Google is put in as a vendor, but it could be Google AdWords, or maybe it's Google software, or maybe it's Google storage, and you want to make sure that they're going in the right categories. Any wrong account or any misclassifying of a transaction, maybe labeling something as a business lunch when it's really office supplies, can really throw off your records. So it's better to review them and then make sure that they're in the right categories. Even something small can really throw off an entire report. Next, you want to look for unrecorded transactions, any forgotten expenses. Maybe you use your personal card and they belong in your business account. Maybe you want to reimburse for those things, or maybe some income that never made it into your books. Maybe you had a drawer full of cash. Yeah, whatever. You want to make sure that gets in the records, and this will avoid any gaps or any incomplete view of your finances. Always keep a backup of all your receipts and records. You want to look and see how things are reconciled. Check each account, make sure they're reconciled monthly, that you're looking at May, it's reconciled all the way through May, or if you're doing this in July, it's reconciled all the way through June. You want to make sure that your books match your bank statement. You don't want to hop into reconciliation, which again, that's in that gear, reconcile, and you pull it up and it shows there's something off on the beginning balance. You don't want to see anything that's in red on your books like that. Look at what you've got as outstanding checks that haven't cleared the bank. Make sure they're not a duplicate. Look for any deposits in transit, any deposits that never hit the bank, never cleared. Look for ACH transactions that didn't clear. They should have cleared. Simple recording mistakes. You're looking for that. And it's really going to be a game changer when you're reviewing your books. So to make things easier, you want to lean on the right tools. You want to look at your QuickBooks, your Xero, and you want to automate as much as possible. And in the data entry piece, in the bank feed, you can set up rules and have the rules be in place so that when you're popping these transactions in, it's very quick and easy and they go to the right accounts. Create vendor names for each thing. So Google AdWords is called Google AdWords. It's not just called Google, and Google's in 3 different places, and you have to really fine-tune where they go. You want to make sure that you've got a vendor name for each one and it's separated and tracked properly. It's the best way to really mitigate any manual errors. And if you're on desktop, why? You need to get off of desktop. You want to be in the cloud and access all your books anywhere that you are, especially in the summer, and you might be traveling. You want to collaborate in real time. You don't want to be doing this data after the fact. We're well past those days, and you're going to enjoy the built-in security that comes along with it. You should be using Clio. Again, built-in security. These tools will streamline everything and keep your discrepancies at bay. So are you ready to review? This is what you want to do. You want to gather your documents, so your bank statements, your credit card statements, your receipts, your invoices, your payroll records, everything that You want, you want to gather that in place so you can review it. You really should review your payroll, even if you're using a payroll service. Review your financial statements. So make sure that everything's reconciled, and then you want to review your financial statements and take a really good look at it and say, okay, here's where I'm at. Look at the profit and loss January through June 2026 compared to January through June 2025. Compare that. Look on the income statement, compare the balance sheet. Take a look at your cash flow report. Now's a great time to look at your budget and compare your goals and make sure that you're on track with your budget. That's another thing that kind of gets left behind. Look at your loans, make sure you resolve any mismatches along the way. When you spot errors, act fast. Double-check your entries, reclassify as needed, remove duplicates, add any missing entries, anything hanging on the bank feed or wherever. You want to make sure that they're in there. Reconcile. And prevent further issues by correcting any workflow problems or procedures that weren't working and correct them so that this doesn't happen anymore. If you find that the things weren't reconciled, you know you need to hop in there and get that work up to date. Best practices: build a routine, create an SOP, look at it weekly, monthly, have updates, look at your financials monthly minimally, and use software to standardize your data entry and always reconcile. And for year-end, you want to keep your records spot-on all year, reconcile often, and review against your goals, especially as December nears. So around November, you want to be looking at that. If things get complex or time-consuming, you want to be prepping for your loans, your audits, bring in a pro, hire somebody that can help you get there. If you really don't want to do this, find somebody who wants to do this kind of work You're getting paid a lot per hour. That person's probably making less. It's worth your money to hire a professional to do this. Staying on top of your finances is the key to business success. A mid-year review will catch any issues early, keep your records clean, and it sets you up for a strong year-end. Use these tips, these tools, especially in the article where I lay it all out, and gain control and peace of mind. Help you sleep at night. Your business deserves accurate books. Take action now. If this helps, make sure you hit the like bar and subscribe to get more financial tips and comment below. Have you done your mid-year review yet? I'd love to hear from you. We'll see you all next time. Thank you for watching. Bye now.
