The true value of 1st quarter financials goes way beyond just the raw numbers. Because of that, your monthly close out is more important and there are do’s and don’ts that are unique to this quarter.
Completing the prioritized tasks gives the owner or manager a perfect opportunity to refine their vision for the year. Using the resulting information can make the last three quarters more productive and more profitable. This will keep you out of the weeds and create the 40,000 foot owner/investor perspective you need to make a better future.
Do’s & Don’ts of Closing Out 1st Quarter Financials
- Don’t just make sure everything balances.
Do look to see how close it matches your income and cost projections. Then make adjustments to the next three quarters projections.
- Don’t just look to see what sold.
Do understand why. Go back to customers to see how things are going. You might pick up some extra sales or some ideas of what to add, change or drop in the 2nd quarter.
- Don’t just accept the cost figures your accounting system tells you.
Do drill down and see where there might be savings. Talk to your people who make the products or provide the services. What ideas do they have for the rest of the year? Reward the best ones. Begin implementing those ideas next quarter to give yourself plenty of time to meet goals.
- Don’t just accept that the staff is doing the job right.
Do see how you can cross-train at least some of them. Do try to give them leadership experience. Do it right and you might double your profits. You’ll already be prepared for any opportunities or threats that come along. You’ll be quicker than your competition with less effort and better results.
- Don’t just look at what you did financially 1st quarter last year or the last quarter of last year.
Do look at what’s changed and what’s on the horizon. There are five challenges to consider each quarter (maybe even monthly). Those are: economic, technological, environmental, social, and regulatory. Get a jump-start on them by identifying them specifically and setting processes in place to mitigate them or take advantage of them.
- Don’t think you have limited resources to make changes.
Do look at your strategic alliances and engage with them for insights and new opportunities. See whom you need to add. Go get them. If you haven’t got alliances or planned for any, see how you might begin to set those up. There’s more value in working with others than being a lone wolf.
- Don’t just make sure you’re in compliance.
Do see how to make that compliance easier and quicker to complete. Investigate some add-ons to your accounting system. Make sure it provides for cost accounting as well as a good time collection system. Check out the Journyx products for instance.