A Quarterly Financial Health Checklist for Business Owners
Why a quarterly check
A year is too long to wait before looking at your numbers, and a month is often too short to see a pattern. A quarterly review sits in between: frequent enough to catch problems early, and spaced enough to be worth doing properly.
1. Is the bookkeeping up to date?
Confirm that every month of the quarter has been recorded and reconciled to the bank. If any month is behind, bring it current before looking at anything else, because every other check depends on it.
2. What is the cash position, and what is coming?
Look at the cash you hold now, what customers still owe you and what you owe suppliers. A realistic view of the next quarter's inflows and outflows is more useful than the balance on any single day.
3. Which customers are paying late?
List overdue receivables and decide what to do about each one. Late payments tend to get later, so the earlier they are followed up, the better the chance of recovery.
4. Are your filings and payments on track?
Check what has been filed and paid this quarter, and what falls due in the next one. Put the dates in a calendar you actually look at, rather than relying on memory.
5. Do the numbers match your expectations?
Compare income and spending with what you expected. Any large difference is worth understanding, whether it is good news or bad, because it usually points to something that changed in the business.
6. Is anything unusual sitting in the books?
Scan for entries you cannot explain, such as old balances, unexplained payments or items parked in a holding account. Clearing them as you go is far easier than doing so at year-end.
7. What decision is coming up?
Note any significant purchase, hire, loan or change of structure expected in the next quarter, and raise it with your advisor early enough to consider the financial and tax effect before committing.
Next step
Put an hour in the diary at the end of each quarter, run through these seven points, and write down anything you cannot answer. That list of unanswered questions is exactly what to take to your advisor.
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Accounting & Compliance→This article is for general informational purposes and does not constitute professional tax, legal or financial advice. Please consult with us directly regarding your specific circumstances.