For many business owners, January arrives fast and with it comes a familiar rush: closing December books, catching up on reports, reacting to tax deadlines, and trying to set goals all at once. Unfortunately, when financial planning begins after the year has already started, opportunities are often missed and decisions become reactive.
At DWG CPA PLLC, we encourage clients to think differently about Q1. The most successful organizations do not wait until January to plan. They use the final weeks of the year to prepare intentionally, so the first quarter begins with clarity, direction, and momentum.
This guide outlines the most important financial moves businesses, nonprofits, and startups should make before January hits. These steps help ensure that Q1 is not spent fixing problems, but executing a well‑informed plan.
The first quarter sets the tone for the entire year. Cash flow patterns, spending habits, hiring decisions, and tax obligations often solidify early and are difficult to correct later without disruption.
When Q1 planning is delayed, businesses typically experience:
Planning before January allows leadership to begin the year informed rather than rushed. It also gives CPAs the opportunity to provide proactive guidance instead of scrambling to respond to issues after they arise.
A strong Q1 plan begins with a budget that reflects reality—not assumptions.
Too often, budgets are built by taking last year’s numbers and adding an arbitrary percentage. While that approach is easy, it rarely accounts for changes in pricing, labor costs, vendor contracts, or economic conditions.
Before January, businesses should review:
For growing businesses and nonprofits, this is also the time to align financial forecasts with operational goals. If expansion, fundraising, or new initiatives are planned for Q1 or Q2, the budget must support them.
This forward‑looking approach is where many organizations benefit from CFO‑level insight. As discussed in Outsourced CFO vs. In‑House: Which Is Right for Your Growing Business?, strategic financial leadership does not require a full‑time hire, but it does require experience and structure.
One of the most common Q1 challenges is cash flow strain, even in profitable businesses. This disconnect often stems from timing rather than performance.
Before January, businesses should examine:
Understanding these timing issues allows leadership to plan funding needs, adjust billing practices, or restructure payment terms before pressure builds.
This distinction between profit and liquidity is critical. As explored in Cash Flow Isn’t Profit: Why You Need Both to Grow, businesses that ignore timing risks often find themselves reacting to shortfalls instead of planning growth.
Q1 is when many business owners feel the impact of poor tax planning decisions made months earlier. Estimated tax payments, payroll tax obligations, and individual withholdings all converge early in the year.
Before January, it is important to:
Waiting until March or April to address these items often limits available options. Early review allows CPAs to align cash flow planning with tax strategy, reducing surprises and penalties.
Businesses that only engage their CPA during filing season often miss this opportunity. Proactive planning ensures tax decisions support broader financial goals rather than disrupt them.
As businesses grow, roles evolve. Contractors become full‑time contributors. Employees take on new responsibilities. Without review, misclassification risk increases.
Before Q1 begins, organizations should assess:
This review protects against compliance risk and ensures payroll, benefits, and tax reporting remain accurate. It also supports better budgeting and workforce planning for the year ahead.
For businesses that recently cleaned up year‑end books, this step naturally builds on that work. If you recently completed a year‑end close or cleanup, the insights gained should directly inform how Q1 staffing and compensation are structured.
Q1 planning is only effective if systems support timely, accurate reporting. If leadership cannot access clear financial data early in the year, decisions will be delayed or made with incomplete information.
Before January, businesses should confirm:
For many organizations, this step reveals that existing systems no longer support their size or complexity. Addressing system gaps early in the year prevents ongoing inefficiencies and reporting delays.
Finally, Q1 planning should translate into clear priorities, not just reports.
Before January, leadership teams should agree on:
These decisions provide alignment across teams and reduce confusion as activity ramps up in the first quarter.
For nonprofits, this clarity is especially important. Board reporting, grant compliance, and program funding decisions often intensify early in the year. Strong Q1 planning ensures financial governance supports mission delivery rather than distracts from it.
At DWG CPA, Q1 planning is never treated as a checklist item. It is a strategic process that connects budgeting, tax planning, cash flow management, and leadership decision‑making.
Our role includes:
Rather than reacting to deadlines, our clients begin the year with a plan that reflects where they are and where they want to go.
Q1 does not need to be chaotic. When planning begins before January, businesses gain control, confidence, and clarity. Decisions become intentional rather than rushed, and financial strategy supports growth instead of chasing compliance.
If you want to enter the new year prepared, not pressured, now is the time to plan.
DWG CPA can help you enter 2026 with strategy and clarity. Whether you need advisory support, tax planning, or Virtual CFO insight, our team is ready to help you start Q1 on solid ground.
If you’re building something important and need a trusted financial partner to grow with you – we’d love to hear from you.
DWG CPA PLLC is a Texas-based accounting firm serving businesses and nonprofits since 2005. We specialize in virtual accounting, tax strategies, and personalized financial guidance across industries like healthcare, construction, real estate, and nonprofits.
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