July is your most valuable financial checkpoint. Are you using it?
By: Alexandra Muton, CPA
For organizations with a December 31 fiscal year end, the halfway point of your fiscal year has arrived. This is one of the most valuable financial checkpoints of the year, not because of what has happened, but because of what can still change.
At year end, you can measure. At the halfway point, you can act. Six months of actuals gives you enough data to see real patterns, and six months remaining gives you enough runway to do something about them.
Here is what this moment should look like in practice.
Review your actuals against budget. Pull your budget vs. actuals report and look at every line. Where are you ahead? Where are you behind? More importantly, why? A budget is built on assumptions about membership revenue, events and programs, operating costs, and other expenses. When you created the budget, some line items were predictable, others were not. Six months in, you can see which assumptions held and which did not. That is not a failure of the budget. It is the budget doing exactly what it is supposed to do: showing you where reality has diverged from the plan so you can respond to it.
Forecast to fiscal year end. With six months of actuals in hand, you now have the most accurate picture you will have all year of where you are heading. Do not wait for October to discover you have a problem. Use June's numbers to project forward. What does December 31 look like if current trends continue? What decisions need to be made now to change that trajectory? This is where a rolling forecast earns its value, not as a prediction, but as a preparation. Bonus: the insights you gain from a mid-year forecast do not just help you finish this year well. They directly inform next year's budget. The assumptions that held, the ones that did not, and the patterns that emerged become the foundation for a more accurate plan next October.
Bring your board into the conversation. Your Q2 results and year-end forecast are exactly the kind of financial picture your board needs to govern effectively. Not a spreadsheet dropped into a meeting package, but a narrative. Remember: financial statements tell the history of your organization. The forecast drives its future. A board that only sees the numbers without understanding the assumptions behind them, or the reasons variances occurred, is a board that cannot meaningfully contribute to the decisions ahead. Tell them the story. The why of the assumptions. The why of the variances. That is what makes a financial presentation worth having.
The organizations that finish the year in the strongest position are rarely the ones that had the best budget. They are the ones that paid attention at the halfway point and made adjustments while there was still time to matter.
The mid-year review is not a reporting exercise. It is a leadership one. It asks you to look honestly at where you are, set aside the comfort of the original plan, and make decisions based on what the numbers are actually telling you. That requires courage as much as it requires financial literacy. But the alternative — arriving at October with no forecast, no updated assumptions, and no time to course correct — is a position no executive director should find herself in. July is your window. Use it well.
About the Author
Alexandra Muton, CPA, is a fractional financial leader supporting nonprofits and small businesses that have outgrown their bookkeeper but are not yet ready for a full-time CFO. She can be reached at muton.ca.