Must-Ask Questions for Your Annual Small Business Finance Checkup

This is the time of year when we start reflecting and thinking about our goals. So I wanted to bring you this focused on how to review your financials and your numbers. Let’s call it a business finance checkup. Even though I’m talking about the end of the year here, these same principles apply at the end of a quarter, after a launch, or during any major season in your business.

Here’s what I want you to do to start your checkup: grab a notebook or come back and check the show notes later—we’ll have a list of reflection questions you can use to review your business finances.

But first, I have to say this: if your bookkeeping isn’t up to date, this process won’t be as helpful. In order to do this finance checkup, you need accurate, complete numbers to review in order to make good decisions. If you’re behind on your books or need a simple routine to maintain them going forward, reach out—I’d love to help.

Now, let’s jump into the reflection questions.

1. Which of your service offerings or packages sold the most—and which ones sold the least?

You might need to run a report in your CRM or accounting software to figure this out. What I often see is business owners only looking at their total sales and deciding they either hit or missed their goal. That’s a good starting place, but it’s not the full picture. Especially if you’re entering a new season of business, you’ll want to break things down.

Find a way to track which services or packages sold the most. That might mean doing this in your CRM or in your accounting platform like QuickBooks.

Why does this matter for your finance checkup? Because once you can see what’s selling and what’s not, you can ask:

• Was this seasonal?
  
• Am I promoting my low-performing offer more than the high-performing one?
  
• Should I adjust pricing or packaging?
  
• Do I need to shift my core offer to what’s working best?
  

2. What were your marketing efforts—and did they work?

Look at how much you spent on ads, PR, sales promos, coupon codes, or other marketing efforts. Did those efforts actually produce the results you expected? This finance checkup will bring this all to light.

If you ran ads for one specific service, ideally, you’d see an increase in sales for that service. If not, that’s a clue that something needs to change—maybe the campaign, the messaging, or the offer itself. Ask yourself:

• Did I promote something heavily through social or email?
  
• Did that effort translate into sales or engagement?
  
• Am I spending money in the right places?
  

Having your offers broken out will help you trace these results more clearly. This is why it’s so important to have those financials organized—it empowers you to make smarter business decisions.

And this is one of the biggest benefits of running your own business—you get to pivot, change, and grow based on what’s working and what’s not. But that only happens when you look at your numbers. Yes, you need to give campaigns and offers some time to perform, but you also need to hold yourself accountable to making changes when things aren’t hitting your goals. Without doing a finance checkup, you won’t easily be able to see this.

3. Do you have unnecessary expenses?

We talked about this before, but strategic business owners have to make tough decisions. Sometimes, you may really want to be part of a specific group, but you just can’t afford it. Or it’s simply not working out the way you thought it would. Review your subscriptions to see if there are any areas where you can cut costs. Maybe there’s a free version of a tool you’re using. Perhaps switching to an annual plan could save you some money.

These are the types of decisions I want you to think about as a savvy, smart business owner: Can I save money? Is this a wise expense that I really need? Or is it time to cut it out altogether? Is there a more affordable or free alternative? These are all questions to ask yourself as you review your expenses—especially when it comes to identifying anything unnecessary. One of my clients recently said she did this exercise and saved herself about $100 a month on a subscription she had forgotten about and no longer needed. That’s what I hope for you, that you catch those things sooner rather than later. Then you’re not wasting precious dollars that could be better spent elsewhere.

4. What changes do you need to make going into the next year?

Do you need to start a new habit to actually do your bookkeeping? That might be the main takeaway from this—realizing it’s time to set up a recurring calendar reminder, join one of my programs to stay accountable, or team up with a friend to do bookkeeping together. Any strategy that helps you stay consistent with your bookkeeping is a great goal. Maybe you also need to schedule a quarterly review and revisit this to reflect on these questions each quarter.

Do you need to change some of your spending habits? This might look like creating a business budget for the first time to give yourself some limits and structure around spending. But it could also mean giving yourself permission to spend and invest back into your business—which is a smart and often necessary part of growth. These are the types of questions to ask when planning for the year ahead and creating financial routines that truly support your business.

5. What investments do I want to make going into the next year or the next quarter?

This is something we dive into in detail in my mini-course about how to know which investments to make next—and how to plan and save for them. I bring this up because it’s important to get ahead of your investment decisions. That way you’re not caught up in shiny object syndrome or missing out on valuable discounts. If you’ve saved up for these investments, you can take advantage of great deals and feel confident about your decision.

That’s why, as part of your annual review, your financial checkup, it’s helpful to reflect on the investments you made this past year. Which ones were you happy with? Were there any that you regret or that just didn’t fit the season of business you were in? When we reflect honestly, we get to know ourselves and our habits better, which helps us make wiser decisions moving forward.

In summary, with our finance checkup we want to:

• Look at our sales broken down by service offerings and packages.
  
• Understand our marketing efforts and evaluate their performance.
  
• Identify unnecessary expenses and evaluate whether current ones are serving our business.
  
• Consider what changes we want to make in the new year to support healthy business finances.
  
• Reflect on what we want to invest in next, so we can make intentional and strategic decisions.
  

For today’s “Demystifying Financial Jargon”, I want to do something a little different and talk about one of the categories you might be using. No matter what system or software you have: the “Miscellaneous” or “Other” category.

Especially as you’re doing an annual review, I want you to run a report and look for any items you’ve classified as “Miscellaneous.” Then, go back through those items and see if you can give them a more specific category. As accounting professionals, we really don’t like the “Miscellaneous” category. It hides important information and makes it harder to understand what’s really happening in your business.

That’s because it’s such a generic category—it’s hard to figure out what something actually is when it’s labeled as “miscellaneous.” It can become a catch-all bucket where things get thrown in either to hide them or simply because you’re not sure where else they belong. But when you’re setting up categories in your bookkeeping system, the goal is for them to make sense to you. Many people worry about whether they’re using the “right” category or not, but honestly, there are often several acceptable answers.

You’re not going to break anything or make a huge mistake if you categorize something as a subscription when it could also be considered an office supply or software. Those are all expenses that, for tax purposes, often get grouped together anyway. The most important thing is to choose a category and be consistent with it. Your tax professional can always advise you later if something would be better categorized elsewhere. What really jumps out at us as accountants is the “miscellaneous” category. That’s often where people stash things they don’t want noticed or just weren’t sure about. So I encourage you to review your miscellaneous category and see if any of those transactions would make more sense elsewhere.

This same advice goes for any other “other” categories, like other assets, other income, or other expenses. Double-check those and see if anything could be more clearly categorized. Sometimes, yes, it truly is a one-time or unusual item and “miscellaneous” or “other” is the best fit. But in many cases, you can find a more accurate home for those transactions, which makes your reports much more useful and clear.

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