The first quarter of the year has flown by, and now is the perfect time for business owners to give their financials a solid Q1 review. Whether you run a small shop, a growing startup, or a well-established company, take a close look at your books now to not only save yourself headaches and money down the road, but perhaps find opportunities to capitalize on and boost financial gains.
Why a Q1 Review is Important
Reviewing your Q1 financials isn’t just about staying organized—it’s about making sure your business is on track for success. Here’s why it matters:
- Catch Mistakes Early: Errors in invoices, expenses, or tax filings can be costly if left unchecked.
- Stay on Top of Cash Flow: Understanding how money moves in and out of your business helps prevent future cash shortages.
- Prepare for Tax Deadlines: April is a big month for tax filings, and a Q1 review ensures everything is in order.
- Improve Decision-Making: With accurate financial data, you can make better business choices for the next quarter.
Key Areas to Focus On
1. Review Your Revenue and Expenses
- Compare your sales and income to the same period last year. Are you growing?
- Check if all business expenses have been recorded correctly.
- Identify unnecessary costs and see where you can save.
2. Check Your Cash Flow
- Review your bank statements to ensure income and expenses match your records.
- Make sure you have enough cash to cover upcoming expenses like payroll and taxes.
- Consider setting up an emergency fund for unexpected costs.
3. Reconcile Accounts
- Ensure bank and credit card statements match your bookkeeping records.
- Look for duplicate transactions or missing payments.
- Fix any discrepancies before they become bigger issues.
4. Stay on Top of Tax Obligations
- If you collect HST, make sure you’re setting aside enough for your next remittance.
- Review payroll deductions and ensure everything is correctly reported.
- Check if you need to make tax installment payments to avoid penalties.
5. Follow Up on Unpaid Invoices
- Identify overdue invoices and send reminders to clients.
- Consider offering payment plans for customers who are struggling.
- Keep track of slow-paying customers to manage cash flow better.
Do a Q1 Review Now for a Stronger Year
Your financial review doesn’t have to be overwhelming. Set aside a couple of hours, go through the key areas, and make adjustments where needed. If you’re not sure where to start or what to look for, reach out to us or find a bookkeeper or accountant who can help ensure your numbers are in good shape.
By staying on top of your finances now, you can set your business up for a smooth and more profitable year ahead!
