Quarterly financial planning should fit in your annual plan and on a grander scale your 3-5 year plan as well. Financial planning will allow your business to be run in a more controlled manner as all company expenses should be made within a predetermined budget. Financial planning can help identify problems before they occur and by doing so can help determine the direction of business when quick decisions need to be made.
The Importance of Quarterly Financial Planning
A quarterly financial plan is a written plan for business operations that is reviewed and analyzed every three months. Quarterly financial planning meetings are important because they reveal deviances from the budget and allow an opportunity to present budget updates. There are several perks to having a quarterly financial plan structure:
- Since it’s a short-range budget there is more flexibility for businesses to adjust and adapt
- Quarterly budgets use real time data instead of forecasts. You can compare forecasted data with real numbers to gain an accurate view of your business’s financial situation.
- Provides accuracy and a detailed look at a company’s finances
- Your business can look forward to quick results answers and improvements every 3 months
Tips on creating and managing a successful budget
When creating a budget it is always best to work from a conservative mindset and to keep the budget honest. Then be held accountable to staying within budget. Keep these tips in mind when creating a detailed plan that focuses on the bigger picture to ensure overall year over year growth:
- Establish overall realistic goals and objectives for the year and then break those down into quarterly goals and objectives.
- Analyze the total financial situation and pinpoint areas of weakness and ways to overcome those and achieve the created goals.
- Incorporate growth strategies into the budget to ensure that your cash resources are ready to go when your company grows and expands.
- Determine fixed and variable expenses and compare those to your income.
- Consider using leftover money on rewards for the office and employees.
- Look for ways your business can cut spending.
As you can see quarterly financial planning will allow you to review the previous quarter and adapt as you enter into a new quarter therefore preventing any surprises at year-end. It is the business leaders that manage refine and enforce the budget. If your business lacks financial structure you are missing an opportunity to maximize your performance.
If your business needs help with financial planning the financial professionals at Lindemeyer CPA can help you create a financial plan and review system that accomplishes all of the above and more. Contact Nathan or Beth to start a conversation about the financial health and future of your business.