Accountants and tax professionals say the summer is a good time to take stock of a company and see whether it's meeting its goals and whether there's enough cash on hand for tax payments. It's also time to make decisions about equipment purchases and other capital spending for the second half of the year.

"You want to assess, are you making money or are you losing money," said Barbara Weltman, a tax attorney in Millwood, N.Y., and author of "J.K. Lasser's Small Business Taxes."

This may sound overly simplistic, but tax professionals say many owners really don't know where their companies stand, and those who are losing money need to find that out fast and start making some changes. Companies that are doing well should probably start thinking about their options for example, should the owner or owners withdraw money or leave it with the business to fund its future growth.

There are also tax reasons for a midyear checkup. Noting that sole proprietors have two estimated tax payments to go for 2007, due Sept. 15 and Jan. 15, Weltman said, "you don't want to be overpaying or underpaying."

Stephen Fishman, an attorney and author of "Deduct It! Lower Your Small Business Taxes," reminded company owners, "if you don't pay enough estimated tax, you'll have a big tax bill next April. A lot of self-employed people forget about that."

But a midyear look at the business by necessity needs to go beyond profits and tax payments those numbers will in the end depend on what your company hopes to achieve in the months ahead. Weltman said of business owners, "you should be doing strategic planning, long-range thinking about things, redoing your business and marketing planning."

And that process should include a look at your capital spending, particularly whether you'll want to buy new equipment. Small businesses have a unique opportunity to save on their income taxes when they buy certain equipment such as computers, vehicles, manufacturing machines or office furniture and claim the expenses under what's known as the Section 179 deduction.

But just because a big tax deduction is available doesn't mean a business should plunge headlong into a purchase. An owner needs to ask not only if it makes sense to buy the equipment, but also if it makes sense to buy it this year if it looks like the next is going to be a more profitable year, it might be better to defer the purchase until January.

You might find it's best to make such decisions with the aid of an accountant or other financial adviser. Weltman noted, "This is a great time of the year to schedule an appointment with an accountant, during the summer months, when it's slow. It's a good time to speak with all your advisers insurance agents and lawyers."

Many accountants will call or e-mail their clients at this time of the year to remind them that it's time for a checkup.

A visit with a financial adviser will almost certainly include a discussion of retirement plans. Both Fishman and Weltman said many small business owners keep putting off setting up or contributing to plans such as Simplified Employee Pensions (SEPs)

If you're thinking of setting up a retirement plan, an important reason to start talking now with a financial professional is that you have until Oct. 1 to create what's known as a SIMPLE plan, a Savings Incentive Match Plans for Employees. They are more complex than SEPs, but they might be more appropriate for your company.

"Don't wait until the last minute," Fishman advised, reminding owners, "you don't have to pay tax on the interest you make all year."

Other financial housekeeping chore that owners should consider during the summer is switching to accounting software if they've been keeping their records on paper, or to change accounting programs if they're not happy with the applications they're currently using.

And, it might be a good time to get some renovations or other work done to your office or physical plant, especially if you'll have staffers who are on vacation and less likely to be inconvenienced or irritated by construction work.

Copyright 2008 Associated Press