When should you consider a mid-year change?

I have a friend and neighbor whose lawn and garden always looks outstanding. It’s lush and green and beautiful. It’s the lawn everyone on the street envies.

To get that lush green lawn, he spent years amending the soil. He dug up a patch and showed me one time, and it was nice, loamy soil. As we were talking about his lawn and his process for amending the soil and planting things in his garden, I told him I never know when it’s the right time to do it.

His response? “Do it when you feel like it. If it doesn’t bloom this year, it’ll bloom next year.”

The same is true for your bookkeeping. Want to change your reporting method? Messed up your chart of accounts and need to make a fresh start? If you need to do it, then do it. You’ll be happy you made the choice and changed it.

People often think they need to wait until the first of the year to make any changes to their bookkeeping, but that’s not necessary for most small businesses. And let’s face it, there’s a lot of other things happening in January for any business, so you might not actually want to implement a new system then.

You don’t have to wait for the first of the year to do it. You can do it now.

Yes, making a mid-year correction to your process or your books might mean that pulling together information for your tax return next year is a little more complicated, but most bookkeepers and accountants are used to that happening sometimes. Check with your bookkeeper or CPA in advance and get their professional advice about the situation, then make the change if it’s necessary. In some cases, not making the change will create more problems than making it.

Sometimes in business, things don’t go as planned. You have a budget and a business plan, and it all looks great on paper. But then the real world happens. Maybe you recorded a deposit incorrectly or messed up your chart of accounts, but you know what happened to cause the problem. If you know what happened, that’s okay. If you don’t know why it happened, that’s a problem.

If something happens in your bookkeeping or in your business, you should document it, especially in small businesses with only a couple of people involved. When you’re looking at your books two years from now, you may not remember the specifics or the person who resolved the issue may not work with you anymore. Be sure to document any changes you make to your process or errors that occur in your bookkeeping-it’ll save you time and headaches later.

Leave a Reply

Your email address will not be published. Required fields are marked *