Q1 is Closed! Now What? Turn Financial Results into ACTION for Q2 and Beyond

By Dave Costello, TCV Financial Leadership Partner:

It’s now mid-April. Q1 is behind us. The books are closed. Reports have been distributed. Variances have been noted.

But for finance and accounting teams, this is not the finish line; it’s the starting point for the most valuable work of the year.

Companies that outperform don’t treat Q1 quarter-end as the time to take a break. They use it as a time to reassess assumptions, sharpen forecasts, and influence decision-making across the business. With nine months still ahead, the ability to translate Q1 results into meaningful action can materially change and improve full-year outcomes.

So, the question is not whether Q1 went “well” or “not so well.” The question is: What are you doing now because of what you learned?

Closing the books answers what happened. Company executives need finance leaders to help answer why it happened and what to do next. Here is what they should be doing:

Start with a deeper look at Q1 performance

• What surprised you relative to plan?

• Where did actual results vary significantly from expectations?

• Were those variances driven by one-time factors or structural/market shifts?

Too often, variance analysis explains what happened but not why. You were below your sales forecast? Did your margin slipped below the budget? That’s information but not necessarily helpful. The best teams push further identifying the causes of the variances and assessing whether those drivers will persist into Q2 and beyond.

For example:

• A revenue shortfall tied to delayed deals may correct itself.

• A margin decline driven by input costs or pricing pressure may not.

Budgets are built on assumptions. This is a good time to ask whether your initial assumptions were any good since they have now been tested in Q1, and in some cases, invalidated. There is no need to wait until mid-year. Ask yourself now:

• Are revenue growth expectations still realistic?

• Has customer behavior shifted?

• Are cost inputs: labor, materials, financing, all tracking as expected?

• Are there emerging external factors that weren’t contemplated during planning?

A disciplined re-forecasting process in Q2 is one of the most effective tools finance and accounting teams have. It allows company executives to change course early, rather than attempting to recover lost ground in the second half of the year. The longer you wait to make mid-course adjustments the harder it is to make up lost ground!

This doesn’t require a full re-budgeting exercise. A targeted review of key assumptions and scenarios can provide significant clarity.

Q1 results should prompt a focused set of executive level questions, such as:

• What truly drove the gap between plan and actual?

• Which parts of the business outperformed? And why?

• Are margin trends developing as expected, or are there early warning signs?

• How has our cash position evolved relative to expectations?

• Where are we most exposed if conditions shift in Q2 or Q3?

These questions position finance and accounting teams as an active partner to the business, engaging with operations, sales, and other executives to interpret results and shape next steps.

With insights and updated assumptions in hand, finance and accounting teams should translate Q1 learning's into a clear set of priorities for Q2 and communicate these learning's to the entire team!

What are some guidelines for looking ahead? Read on!!

1. Re-forecast with Intent - Don’t wait for a formal mid-year process. Update expectations now based on Q1 actual results and current trends. A rolling forecast approach, focused on key drivers rather than exhaustive detail, can provide agility without overwhelming the team.

2. Pressure-Test Cash Flow - Cash remains the ultimate constraint in most businesses.

• What happens if revenue softens?

• What if collections slow?

• How much cushion do you really have?

Scenario analysis doesn’t need to be complex, but it does need to be honest. Understanding downside risk early gives leadership more options.

3. Reassess Cost Structure - Q1 is an ideal time to revisit fixed versus variable costs.

• Where do you have flexibility?

• Which costs are locked in regardless of performance?

• Are there opportunities to realign spending with current priorities?

This is not necessarily about broad cost-cutting. It’s about ensuring that the cost structure supports the business as it actually exists today, not as it was envisioned six months ago.

4. Take Another Look at Liquidity - Now is the time to tighten that focus:

• Are receivables being collected as expected?

• Are payables aligned with cash strategy?

• Is inventory being actively managed?

  
  

Small improvements here can have an outsized impact on liquidity. At its best, finance and accounting teams serve as the bridge between data and decision-making.

The outputs of the accounting function—financial statements, variance reports, cash flow analyses—are not ends in themselves. They are inputs into future critical business decisions:

• Pricing adjustments

• Hiring plans

• Investment timing

• Resource allocation across business units

  
  

To play this role effectively, finance leaders must actively engage with every other department in the organization.

That means:

• Partnering with operational leaders to understand what’s driving results

• Translating financial data into business implications

• Contributing to scenario planning and strategic discussions

  
  

This shift, from scorekeeper to strategic partner, is where finance teams create the most value.

Don’t fall into the fallacy of treating Q1 as a closed chapter.  The books are finalized, reports are archived, and attention shifts fully to the next period, without fully leveraging what was learned.  This approach leaves value, and potential under performance, on the table.

Q1 is the earliest, most actionable signal of how the year is unfolding. Ignoring or under-utilizing that data reduces the company’s ability to adapt.

With nine months remaining in the year, there is still ample time to influence outcomes. Companies that act decisively in Q2, that are grounded in a clear understanding of Q1 performance, are far better positioned to:

• Protect margins

• Manage risk

• Allocate capital effectively

• Capture opportunities as they emerge

The difference is rarely access to data. It is the willingness and ability interpret and to act on it.

For many companies, the challenge isn’t identifying these priorities; it’s having the time, resources, and experience to execute them effectively.

This is where bringing in experienced, external support, whether through fractional finance leadership or strategic advisory, can make a meaningful difference. With the right expertise in place, companies can move more quickly from insight to action and ensure that Q1 results translate into stronger performance for the balance of the year.

Not sure where or how to start? That’s what we live for at TCV Growth Partners! Reach out to me at dave@tcv-growth.partners to start the conversation of how we can help!