An annual financial plan can help you adjust your cash flow, cut costs, manage taxes and generate growth. But no matter how thorough that plan is, it's important to set regular checkpoints to review it throughout the year. By June, you should have a good idea of ​​how your business is doing against your annual plan and what to expect for the remainder of the fiscal year. Now is a great time to take a deeper look, assess your business performance and adapt.

Here are five questions to ask between Year to maintain a healthy financial plan:

1. Are you following the budget?

Review your income statement to see how you're performing against your projections bUDGET. Are your income, expenses, and net profit or loss where you thought they would be? Why or why not?

If you don't already have a monthly budgeting and reporting system in place, or you're lagging behind, it might be time to seek outside support.

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2. How is your cash flow and track?

Throughout the year, COMING and the timing of cash flow in and out of the business is an important health indicator. Midway through the year, take a closer look at your cash flow statement to understand where the money is coming from and where it's going. Review things like cost of operations, working capital and cash flow from current contracts so you can make changes if necessary. Here are some questions to consider:

• Do you have outstanding bills that need attention now?
• Are you on track to meet your income goals?
• What planned expenses will come up that you will need to prepare for (for example, equipment purchases, headcount, conferences, training)?
• Do you need to raise your rates to better match the market?

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3. Do you want to make new investments next quarter?

It may be time to reinvest money into the business if you have cash available. Do you want to make big purchases, increase employment or invest in R&D before the end of the year? If so, the third quarter will be the best time for this because you have a better sense of how the year is going.

4. Are you paying the right amount in quarterly taxes?

Now that you have two-quarters of your tax payments, you can see how these payments track against your actual tax liabilities. Are you paying enough to cover your annual tax liability, or do you need to adjust? Conversely, you may pay too much or find that there are tax liabilities that can be deferred until next year. In this case, you can review your quarterly tax payments and free up money for business investments in the second half of the year.

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5. Do you pay enough attention to tax laws?

Tax laws are always changing. Depending on your company's structure and industry, you may be eligible for more benefits than last year or have to pay more for certain expenses. For example, in 2023, the rules around R&D costs changed for certain businesses. Tech companies are now being forced to capitalize on a larger percentage of these costs than ever before, and this can have drastic tax implications for venture-backed startups. They now have to plan to set aside 30 or 35% of their income for taxes, which takes away what can be spent on the business.

To mitigate these issues, establish a good relationship with a tax expert. Schedule regular check-ins with your advisor so you can review payments as needed, reallocate cash, and monitor tax law changes as they occur.

It's always hard to find time for a mid-year financial health check. But now is the perfect time to review your budget, cash flow and tax planning to make sure you're still on track with the goals you set at the end of 2023. Chances are you'll discover new insights about your business and be able to make critical adjustments to see you through the rest of the year of the year.