September Financial Checkup: Three Numbers to Review Before Year-End Planning Starts
September is the moment to stop and actually look at your numbers. Not in a panicked way on December 15th. Not in a vague way when you remember to think about taxes. Now, when you still have time to do something about what you find.
I've done bookkeeping cleanup work for plenty of businesses that waited until November to open their books and figure out what the year looked like. By then, the damage is already done. You can't unstuff revenue into the right quarter. You can't retroactively fix categorization that's been sitting wrong for nine months. You can't suddenly create cash flow visibility when you're already staring down the new year with no runway.
Here's what I do in September with my own books, and what I recommend to business owners in Sonoma County and beyond: pull three specific numbers and actually read them. Not just glance. Read them. Understand what they're telling you about the next four months and next year.
Number One: Your Year-to-Date Profitability
Open your P&L and look at your net income for January through August. That's your actual profit so far. Not your revenue. Not your sales pipeline. Your profit. The money that's yours to keep after expenses.
This number matters because it shows you the real trend. Some business owners think they're doing well because sales are up, but when I pull the books, the profit margin has actually compressed. You're running harder and making less. That's the kind of thing that doesn't show up unless you actually look at this number in September, when you have time to investigate and adjust.
Ask yourself: Is this profit level sustainable? If you stopped bringing in new business tomorrow, could you cover your fixed costs for three months? If the answer is no, then September is when you start thinking about where expenses need to shift. Not in February when cash is tight.
If you work with a CPA or a remote bookkeeper, this is a good conversation to have. Your bookkeeper can show you the margin by product line or service offering, which gets even more useful. Sometimes one part of your business is carrying the other, and you don't know it until someone shows you the numbers clearly.
Number Two: Your Cash Balance and Cash Flow Through Year-End
This is different from profitability. You can be profitable on paper and completely out of cash in practice. I've done the books for restaurants where the numbers looked solid until you factored in the lag between when they paid distributors and when customers paid them. Same with construction companies and architecture firms. The money works a specific way in your industry, and September is when you need to model it.
Look at your actual bank balance right now. Then look at what's coming out between now and December 31st: payroll, rent, taxes, loan payments, supplier payments, everything. Subtract that from your balance. What's left? That's your buffer. If you're nervous about that number, you need to know it now, not in November when a contractor invoice hits and suddenly you're short.
If the picture looks tight, there are things you can do in September and October: collect outstanding invoices, negotiate payment terms with vendors, adjust your spending for the rest of the year. But you have to see the problem first. As a remote bookkeeper serving clients from Petaluma to across the country, I've learned that the businesses that make it through seasonal crunches are the ones that saw it coming.
A simple cash flow projection for the next four months takes maybe an hour to build and can save you thousands in stress and poor decisions. It's worth doing now.
Number Three: Your Tax Liability Estimate
By September, you should have a rough idea of what you're going to owe in taxes. If you're a sole proprietor, your income tax. If you're an S-corp or C-corp, corporate tax plus your personal taxes. If you have employees, you already know your quarterly payments. The question is: does your cash flow accommodate what you're probably going to owe?
Some business owners find out in January that they're going to owe $30,000 and have no plan to pay it. That's a year-altering problem. But if you estimate in September, you have time to set money aside, adjust quarterly payments, or talk to your CPA about strategy options like estimated tax payments or loan planning.
Your bookkeeper or CPA can help you project this, especially if you work with a small business bookkeeper who reads your books and understands your business. I often pull year-to-date profit, back out deductions, and give clients a rough estimate by September 15th. It's not exact, but it's close enough to plan around. The CPA can refine it, but at least you're not surprised.
What to Do With These Three Numbers
Once you have them, you have choices. You can accelerate revenue collection before year-end if cash is tight. You can cut discretionary spending in Q4 if profit margins are lower than you thought. You can make staffing or investment decisions based on what you're actually likely to have in January, not what you hope to have.
You can also decide, maybe, that you need better financial reporting year-round. A lot of business owners don't pull these numbers until September or October because their bookkeeping has been sitting in the background all year, untouched. They don't have a clean P&L, a current balance sheet, or any visibility into cash. Then September comes and there's work to do. I've done plenty of cleanup work for businesses in that position, and it always costs more and takes longer than keeping the books current would have.
The businesses that run smoothly and plan confidently are the ones with bookkeeping that's happening every month. Not perfect. Just current. A small business bookkeeper or a virtual bookkeeper who touches the books monthly gives you financial reporting that's actually useful. You can pull it in September and make decisions based on real information, not scrambling.
If you haven't looked at these three numbers yet, do it this week. If you don't have someone to help you pull them, that's worth changing. I'm available to talk through your numbers and what they mean for your next four months and next year. You can book a call at https://cal.com/balancewisebooks/15min or reach me at (707) 835-4414 to discuss your situation.