How to Close Out First Quarter Financials

As the first quarter of 2023 draws close, many business owners and office managers ask themselves the same question: How do I navigate closing out my financials? Those unfamiliar with this process may feel overwhelmed with where to start and what numbers to look for. But, have no fear! With a few easy steps, you can organize your finances and ensure that everything is properly recorded to prepare you for another successful quarter. In this blog post, Bayou Bookkeeping & Tax Services takes an in-depth look at all the tasks associated with closing out your financials and walks you through exactly how it’s done, from start to finish.

Review Your Budget

Creating an effective budget through bookkeeping is important to financial success and stability. Reviewing your budget regularly is something that you should make a habit of to keep track of your spending and saving. You should ensure that all expenses are up-to-date and accurately represent the current month’s expenditures. This can also be a great time to reassess your goals and adjust any necessary items to stay on track.

Analyze Your Cash Flow

Analyzing your cash flow can provide valuable insight into where your money is going. Furthermore, it can help you identify potential areas to cut back on unnecessary expenses, freeing up money for saving and investing. To analyze your cash flow, document your income sources and any outgoing expenses. Separate your fixed and variable expenses, tracking them weekly or monthly. Afterward, assign each category an amount that reflects its associated costs for that period. Finally, add all the numbers and deduct total expenses from total income to detect positive or negative cash flow. 

Evaluate Accounts Receivable and Payable

Evaluating accounts receivable and payable is a smart practice for any business. Knowing who owes and is owed money, along with the details of those transactions, gives owners an understanding of their current financial position. Being able to assess this information accurately leads to making better-informed decisions. It also avoids any unwelcome surprises. Regularly evaluating these accounts is a practical way to ensure businesses stay current with their finances.

Reconcile Bank Statements

Reconciling your bank statements is an important but often overlooked activity. First, it helps you to see what transactions occurred for the period. Next, it helps you identify errors or discrepancies so that you can take corrective action. By taking this proactive approach to review your bank statements, you can have confidence in the accuracy of your financial information.

Prepare Financial Reports

Preparing financial reports and tracking your finances is critical to managing a business. Reports can include anything from income statements to balance sheets to cash flow, depending on the type of entity and its financial activities. These reports provide insight into a company’s financial health. 

Enlist the Professionals

Understanding and managing your finances can become much simpler with the right system. If you want professional accounting services, call Bayou Bookkeeping & Tax Services at (225) 442-1137 in Baton Rouge.