End of the First Quarter: What Every SME Should Do Now
The end of the first quarter is a decisive moment for any small or medium-sized enterprise. Just three months of activity - enough time to understand whether the year started on the right track or whether a course correction is needed before it's too late. More than an accounting exercise, this is a strategic opportunity that many SMEs tend to underestimate.
1. Financial Review: Numbers Don't Lie
The first task is to sit down with the actual financial data for the quarter and compare it with what was planned.
Analyse budget variances. If revenue fell short of expectations, it's essential to understand why - was it a market problem, commercial execution or pricing? If costs exceeded the budget, identify which items and assess whether it's a one-off deviation or a trend.
Review cash flow. Net income may look positive, but an SME can run into difficulties due to lack of liquidity even with profit on paper. Check overdue receivables, negotiate terms with suppliers if necessary and ensure you have operational margin for the next 60 to 90 days.
Calculate key indicators. Gross margin, EBITDA, average collection period and debt ratio are metrics that should be monitored quarterly, not just at year-end.
2. Tax and Accounting: Meet Deadlines and Anticipate the Rest
The first quarter brings tax obligations that cannot be ignored. In Portugal, SMEs should be aware of a set of critical deadlines that typically fall between March and April.
Check VAT. Confirm with your certified accountant that periodic returns are up to date and that the amounts calculated match expectations. Discrepancies at this stage are much easier to resolve than at year-end.
Anticipate Corporate Tax. Although the deadline for filing the Income Declaration (Model 22) is in May, this is the ideal time to estimate the tax payable and assess whether there are tax benefits to take advantage of - such as SIFIDE, RFAI or investment deductions.
Review supporting documentation. Make sure all invoices, contracts and expense receipts are properly organised and classified. Well-prepared accounting starts with day-to-day document organisation.
3. Human Resources: The People Behind the Results
First quarter results largely reflect team performance. This is the right time for an honest assessment of the situation.
Evaluate individual and collective performance. Compare the objectives set in January with the results achieved. Publicly acknowledge positive results and discreetly identify areas where support or reorientation is needed.
Review HR indicators. Absenteeism rate, turnover, overtime and recruitment costs are data that should be analysed quarterly. Negative trends in these indicators have a direct impact on productivity and operational costs.
Verify compliance with labour obligations. Payroll processing, workplace accident insurance, Social Security declarations and any fixed-term contract renewals are responsibilities that cannot be neglected.
Invest in talent retention. In an increasingly competitive job market, the first quarter is also a good time to assess whether key employees are satisfied and aligned with the company's culture and objectives.
4. Strategy and Goals: Course Correct Based on Data
An annual plan is not a static document. The best managers use the end of the first quarter to review it with a critical eye.
Reassess annual objectives. With 25% of the year completed, more realistic projections are possible. Keep objectives ambitious but adjust intermediate targets if market or internal conditions have changed.
Identify blockers. What prevented the company from growing more this quarter? Lack of resources, inefficient processes, dependence on a single client or supplier? Naming problems clearly is the first step to solving them.
Set priorities for the second quarter. Based on the previous analysis, establish three to five concrete priorities for the next 90 days. Less is more: dispersion is one of the greatest enemies of SMEs.
Communicate with the team. Share the quarter's results with employees in a transparent and motivating way. A well-informed team is a more committed team.
Conclusion: 90 Days to Change the Course of the Year
The end of the first quarter is not a finish line - it's a checkpoint. SMEs that dedicate time to this analysis in a structured way have a significant advantage: they make decisions based on real data, not intuition. Those that ignore this moment miss the opportunity to fix what isn't working while there's still time.
Set aside a day with your leadership team, gather the numbers, be honest about what went well and what failed - and start the second quarter with a plan that's stronger than the last.
This article is for informational purposes only and does not replace advice from a certified accountant or financial consultant.
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