The Mid-Year Cash-Flow Check: 5 Numbers Worth Pulling Right Now

A mid-year cash-flow check takes about fifteen minutes, and it answers one simple question: is the cash actually showing up the way your revenue says it should?

Plenty of practices look busy and profitable on paper while the bank account quietly tells a different story. Halfway through the year is the perfect time to catch the gap, because you still have six months to do something about it.

Here are the five numbers to pull right now, and what each one is telling you.

1. Profit on Paper vs. Cash in the Bank

Start here, because it frames everything else. Look at your profit for the first half of the year on your P&L, then look at what's actually sitting in your accounts.

If the practice "made" good money but the cash isn't there, that's your signal to go find where it went.

It didn't vanish. It's usually hiding in one of a few places: inventory on the shelf, money your patients or insurers still owe you, debt you paid down, or owner draws. All of these live in your Balance Sheet, not your P&L.

The point of this check isn't to panic. It's to know which of those is eating your cash, so the rest of this list tells you where to look.

2. Your Cost of Goods Percentage

For most optometry practices, the cost of frames, contacts, and lab work runs somewhere around 25 to 28 percent of collections. Pull yours for the last twelve months and see where you land.

If it's drifting above your normal range, that's margin leaking out the back door.

A creeping COGS percentage usually traces back to pricing that hasn't kept up with costs, discounting that's gotten loose, or a product mix that's shifted toward lower-margin work.

You don't have to fix it all today. You just have to see it.

3. The Gap Between Getting Paid and Paying Out

This is the one that quietly squeezes growing practices.

Measure roughly how long it takes from the day you submit a claim to the day the money actually lands, then compare that to when your obligations come due: the lab, the next inventory order, payroll.

When the money you're owed comes in slower than the bills you owe go out, you have a cash gap.

A busy, growing practice can have a widening gap and a shrinking bank balance at the same time, which feels deeply unfair and catches owners off guard every time.

Knowing your gap is the first step to managing it.

4. Inventory Sitting on the Shelf

Every frame on your board that you bought and haven't sold is cash frozen in place. A little of that is the cost of doing business. A lot of it is a slow leak.

At mid-year, take a look at what's aged: the frames that have been sitting for months, the lines that aren't moving. That's money you already spent that hasn't come back to you yet.

Freeing some of it up is one of the faster cash wins a practice has, and I went deeper on exactly how in this post on freeing up cash in inventory.

5. Your Own Paycheck

Last one, and it's the one owners tend to skip. Look at what you've actually paid yourself over the first half of the year.

Is it a consistent number you can count on, or is it whatever happened to be left over?

A good rule of thumb is to pay yourself no less than 15 percent of collections, and to pay it on a regular schedule like any other important bill, not last and not by accident.

If your owner's pay has been erratic or thin, mid-year is the moment to set a real number and stick to it.

You're supposed to get paid in two ways for this practice, for the work you do in it and for owning it. Make sure the first one is actually happening.

What to Do With What You Find

The goal of this check isn't to fix all five things this afternoon. It's to spot which one or two are actually leaking cash, while there's still half a year of runway to act. Pick the biggest leak and start there.

If you want the full system behind these numbers, including how to build the accounts and rhythms that keep cash flowing on purpose, that's all in Cash Flow Mastery.

This quick check is how you find the problem. That's how you fix it for good.

Together they're the Profit pillar of the Financial Harmony framework at work: see the money clearly, then tell it where to go.

Want a Second Set of Eyes on Your Numbers?

If you run this check and don't like what you see, or you're not sure you're reading it right, let's look together.

Click here to Book Your Financial Clarity Call and we'll find where your cash is going and what to do about it before the year gets away from you.

To your abundant practice,

Eric Levenhagen, CPA CTS

Eric Levenhagen, CPA CTS, is the only financial consultant who helps private practice optometrists improve the financial health of their practice with a simple process called Financial Harmony, designed to reduce their taxes and increase their after-tax profits so they can reach their personal goals faster.

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