How to do a Mid-Year Money Review

by Denai Wolfe

how to do a mid year money review

How are we halfway through 2021 already? However your business is going this year, now is the perfect time to conduct a mid-year money review, and I’m going to give you my roadmap of exactly how to do it!

Make sure to download my Free Profit Plan resource as this is going to be a huge help as you work through each of the steps.

So, why is now the perfect time to conduct a mid-year money review? I like to call it the ‘sweet spot’ of the year when you have some decent financial data behind you – 6 or 7 months’ worth of information at your fingertips – to help you accurately project your profits for the year BUT you also have plenty of time to turn things around if you’re unhappy with what the numbers are telling you.

Mid-year money reviews are something I’m really passionate about and once you’ve gone through the below steps, you will see just how simple it really is to get an accurate idea of where your business is heading, and make adjustments if you need to.

Step 1Calculate your Revenue!


What is revenue? It’s all the sales you’ve made from your business through the year. This could be selling services, coaching sessions or products – anytime a client has paid you for something, that counts as revenue.

A common mistake I see people make in this area is simply tallying up every deposit they’ve had into their business checking account. This isn’t all going to be revenue!

Covid has hit a lot of businesses hard over the past 2 years, so you might have benefitted from PPP or EIDL during this time – they will have been deposited into your business checking account, but they are NOT REVENUE! 

(For more info on these, check out my videos: PPP Forgiveness and Should I take the EIDL Loan?)

Another common mistake is to only calculate net sales. Many payment processors such as Stripe take their fees before they give you the money. This means that the deposit you receive into your bank account is not your GROSS revenue – you need to be logging in to your POS software and generating a sales report; this will give you an accurate figure of your total gross sales!

Step 2 – Calculate your Expenses!


The next step in conducting a midyear money review is to calculate your expenses. It is so important that you have an accurate total for your business expenses. Your expenses are basically anything that you have paid out for your business. But beware of some common mistakes when calculating your expenses.

  • Loan Payments: Monthly repayments to a business loan DO NOT count fully as expenses. When you make a loan repayment (for example, $1500), some of that repayment is Principal – repaying the debt – and some is Interest. Make sure you check your loan statement which will give you the breakdown of principal vs interest and only your interest payments can be listed on this expense list.
  • Paying yourself: If you operate as an S Corp, then anything you pay yourself through payroll can be included as a business expense. However, if you’re a Sole Proprietor or LLC then anything that you paid yourself can NOT be counted as a business expense. (For information on running your business as an S Corp vs an LLC, watch this video).

So, by this point you should have a pretty strong idea of what your Revenue and what your Expenses are for 2021 so far so let’s move on to step 3.

Don’t forget to download my free Profit Plan resource to help you conduct your Mid-Year money review!

Step 3 – Calculate your Personal Contributions!


It’s so easy, when your business is coming up a little short, to deposit something from your personal checking account. I would honestly be surprised if many businesses HAVEN’T had to do this at some point!

But we want to make sure we’re not including those deposits or transfers as revenue. Any personal contributions you’ve made to your business throughout the year need to be kept in a separate virtual bucket and not counted as revenue.

If you’ve had $1000 into your business checking account in a week, but only $500 of that came from actual sales, you need to make sure you aren’t counting the whole amount as revenue, make sense?

Step 4 – Calculate your Pay!


#FYI – In this step when I talk about your PAY, I am only referring to the draws or transfers you took from your business and I am NOT referring to your paychecks. SO, if you’re running your business as an S Corp, your payroll has already been accounted for in Step 2. Don’t include it again here!

If you haven’t  taken a draw / made a transfer to  your personal checking account you might think that you haven’t “paid yourself” and can skip this step. Not so fast!

ANY money that has been spent from your business checking account for personal use counts as your “pay”. As an example – maybe you swiped your business debit card when you bought groceries, or when you treated yourself to a well-earned mani-pedi.

Bottom line – if it came from your business checking account and was spent on something NOT business related, you need to include it here as pay!

Step 5 – Projecting your 2021 Profit!


By now you should have calculated your revenue and expenses and you are ready to calculate the best part…PROFIT. Here’s how:

REVENUE – EXPENSES = PROFIT

Now that you know what your profit is so far this year you are going to take the Profit and divide it by the number of months that you completed this exercise for. So let’s say that you did this for January to June. That means that you did the exercise for 6 months. So take the profit and divide by 6 to get your average monthly profit. Then take that number and multiply by 12 and BOOM you have your projected profit for 2021.

This can seem like a lot of steps to get your head round, so make sure you’ve downloaded your Free Profit Plan to walk you through exactly how to make these calculations!

Now that you’ve conducted your mid-year money calculations AND your projected profits for the year, see how this compares to any money goals you set yourself for 2021.

Didn’t set any goals? That’s fine! But what you should do now is see whether you’re happy with the projected profit. Is this a comfortable amount of profit for your business to be making in a year? Ask yourself –  “Am I getting what I deserve out of my business financially?”

If you’re answering NO to any of these questions I need you to buck up beautiful because guess what? You have time to re-route and get your business back on track! Back that profit train right up and divert it onto a path that is going to be bringing in the money you know you should be making! 

There are so many things that you can take away from this Mid-Year Money Review process (and if you want to watch me discussing this in real time, watch this video) but the most important point that I want you to remember is that It’s Not Too Late to turn things around!

We are halfway through 2021, sure, but we are also ONLY halfway through 2021! There’s no need to throw the baby out with the bathwater and give up, you still have so much time left to turn things around. You got this!

Check out my website to learn more!

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Denai Wolfe with laptop

My name is Denai Wolfe and I’m dedicated to helping big thinking entrepreneurs increase their profits and decrease their stress. I’m laser-focused on turning your passion into profits. When it comes to business I have one core truth – If it doesn’t make money, it doesn’t make sense.
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