Two years ago my article: “Time For That Mid-Year Budget Tune-Up” was published by the New York Enterprise Report, pointing out to their readers that mid-year provides a unique opportunity for business owners to get a better grasp on how their business performing.

Assuming they created a budget at the start of the year, and take the time to compare actual results to budget.

Recently, I’ve had a few good chances to “walk the walk” with some of my clients, and it’s been an interesting experience on a few counts:

• Used second quarter actual results to gain a clearer understanding of packaging costs and direct labor costs per case for an early stage snack manufacturer.   I had estimated both too aggressively in my business plan financial projections.  To catch this required that this client’s bookkeeper be very accurate in booking actual cost of goods sold to each individual element, which she was.

• One difficulty in doing this analysis was the client’s inattention to actual case sales.  This data was not captured at the time of sale, and was too difficult for them to pull together at quarter end.  We backed into estimated case sales using actual revenue, and a general understanding of what average revenue per case should be.  Don’t let this happen to you.  All business owners should do their best to define a unit of sale, and track these units.  It is invaluable information for doing revenue and cost analysis.

• I was called into a company I had never done work for before to give a point of view on what was their break-even point, as they were confused by gross margin which fluctuated by 10 percentage points up and down from month to month.   I’ve seen this at other companies that don’t have a mature cost accounting system, and don’t make a monthly entry for change in inventory.   This company was overvaluing their finished good inventory at the expected future sales price, which meant that the more they produced, the better it made their gross margin appear in that month.  Don’t let this happen to you!

• Got a more established client back on track analyzing and acting on material usage at their factory.  Their production team members had gotten in the bad habit of blaming nearly all off-standard material yield results on bad cycle inventory counts.  The solution: told the production team they had to get one of their people to participate in the monthly inventory count, and sign off on the physical count of raw and package material at the time it happened.

It’s August and your firm’s CPA might be on vacation at Cape Cod, the Hamptons or the Jersey Shore.  But it’s still a great time to use the first half year actual accounting results to gain a sharper understanding of what is really happening at your business, both good and bad.