Halfway through the financial year? Use this 9-point bookkeeping checklist to stress-test your cash flow, fix BAS errors, and prepare for a smooth EOFY.
Introduction
We are officially halfway through the financial year. For many Australian small business owners, January isn’t just about recovering from the holiday rush; it’s a critical psychological checkpoint. You might look at your bank balance and wonder:
- “Am I actually on track to hit my goals?”
- “Will I face a massive tax bill at EOFY?”
- “Why does cash feel tight even though sales were good?”
If you are asking these questions, you aren’t alone. The mid-year mark is one of the most valuable opportunities to course-correct. It is the perfect time to fix small bookkeeping errors before they snowball into expensive problems at the End of Financial Year (EOFY).
Here is your 9-step mid-year financial health check to ensure your business is compliant, profitable, and ready for growth.
KEY TAKEAWAYS
- Cash vs. Profit: Your bank balance does not equal your profit.
- Compliance: The ATO is using automated tools to flag BAS errors—check them now.
- Action: A mid-year review prevents “tax shock” in July.
1.Stress-Test Your Cash Flow (Is Money Actually Landing?)
Sales figures can be deceiving. You might have had a record-breaking December on paper, but if that money isn’t in your bank account, your business is vulnerable.
Ask yourself these questions:
- Are your payment terms too loose? (e.g., Are clients paying in 45 days instead of 14?)
- Have supplier costs crept up unnoticed?
- Does your bank balance fluctuate wildly, leaving you sweating on payroll day?
The Fix: Review your Cash Flow Statement, not just your Profit & Loss. A proper review ensures you have enough liquidity to pay upcoming BAS, Super, and wages without relying on credit.
2.Audit Your BAS & GST Coding
The Australian Taxation Office (ATO) is increasingly using data-matching technology to spot inconsistencies. Most small business audits are triggered by simple, repeated GST mistakes.
Common “Red Flags” to check mid-year:
- GST on GST-free items: Are you accidentally claiming GST on bank fees, water rates, or ASIC fees?
- Entertainment vs. Staff Amenities: Are client lunches coded correctly?
Why do this now? Catching these errors mid-year is far more efficient than unravelling 12 months of data at tax time. If we find small mistakes now, we can often simply pick them up in your next BAS period as an adjustment—saving you the hassle of back-dating changes or lodging formal amendments.
3. Review Profit Margins (Don’t Trust the Bank Balance)
If you run a hospitality business or service company, your bank balance is a liar. It includes GST and PAYG withholding that isn’t your money.
A mid-year profit check reveals the truth about your margins:
- Cost of Goods Sold (COGS): Has the price of milk, coffee beans, or raw materials increased?
- Pricing: Have you raised your prices to match inflation?
- Overheads: Did your rent or insurance jump this year?
4. Payroll & Superannuation Compliance
Payroll is the highest risk area for Australian employers. With Single Touch Payroll (STP) Phase 2 in full effect, the ATO has real-time visibility over what you pay your staff.
Mid-Year Payroll Checklist:
- Pay Rates: Have you updated rates based on the latest Fair Work Award changes?
- Superannuation: Are you paying Super on time (quarterly or monthly) to ensure it is tax-deductible?
- Classifications: Are casual loadings, overtime, and penalty rates being calculated automatically in your software (e.g., Xero)?
5. Reconcile Every Single Account
Reconciliation isn’t just for your main trading account. To get an accurate picture, you must reconcile “clearing accounts” and liabilities monthly.
Ensure these are balanced to $0.00 or the correct statement balance:
- Business Credit Cards
- PayPal feeds
- Stripe / Square / Eftpos clearing accounts
- Equipment Loans
- Afterpay/Zip Pay merchant accounts
These accounts are some of the most common sources of hidden discrepancies. Monthly reconciliation ensures accuracy, prevents BAS errors, and keeps your books audit-ready year-round.
6. Chasing Debts: Clean Up Accounts Receivable
Mid-year is the perfect time to play “Bad Cop” with unpaid invoices. The longer an invoice sits unpaid, the less likely you are to ever collect it.
- Run an Aged Receivables Report.
- Identify who owes you money past 30 days.
- Send reminders or pick up the phone.
- Review Accounts Payable: Are you being double-charged? Are any supplier bills missing from Xero?
7. Forecast the Next 6 Months
Most businesses drift through the year. The successful ones steer the ship. Now that you have 6 months of data, use it to create a budget for the rest of the financial year.
- Tax Planning: If you are making a high profit, should you purchase equipment before June 30?
- Cash Reserves: Do you need to put aside more for the next BAS?
8. Digital Record Keeping (EOFY Prep Starts Now)
EOFY is stressful only when you are scrambling to find receipts from 11 months ago.
The “Paperless” Checklist:
- ✓ Are all paper receipts snapped and uploaded (using Dext or Hubdoc)?
- ✓ Are invoices attached to the transactions in your accounting software?
- ✓ Are loan documents and asset purchase invoices saved in a dedicated folder?
9. Book a Mid-Year Health Check
Waiting until tax time to talk to your bookkeeper or accountant is a strategy for stress, not success. By then, the financial year is closed, and you cannot change the outcome.
A mid-year review with a professional allows you to:
- Spot cash-flow leaks immediately.
- Legally reduce your potential tax liability before June 30.
- Ensure your Xero file is “audit-proof.”
Final Thoughts
You have exactly six months left to improve your profit, fix your cash flow, and ensure your team is paid correctly.
Don’t wait until June 30 to find out how your year went—acting now gives you time to change the outcome, rather than just reporting on it.
If your books are messy, or you simply want a professional eye to confirm you are actually making money, we are here to help.
If you’re done guessing and ready to feel in control of your finances, we’re here.
At Modeno gives you bookkeeping that goes beyond the numbers — with clarity, guidance, and support built for Australian businesses.