monthly financial vs. quarterly strategic meeting

Every business needs an accurate understanding of its finances so that both immediate financial health and long-term financial planning can be done well. The foundation of a business’s financial review is the monthly financial meeting and quarterly strategic meeting. These meetings each serve a distinct role but are essential.

The Monthly Financial Meeting

The purpose of monthly financial meetings is to monitor and adjust financials at a granular level. The monthly financial review is largely on actual numbers, and any adjustments made are immediately actionable.

While each business will have its own specific items to discuss at monthly meetings, some questions that usually should be addressed are:

  • Is the business financially stable at this time?
  • Are expenses falling within what’s been budgeted?
  • Are revenues meeting or exceeding what’s expected?
  • Do any immediate changes have to be made?

These general questions should be discussed in light of specific data that are tabulated from the entire month:

  • Actual Expenses: Compare the actual expenses to what was budgeted, identifying any expense that’s significantly under or over budget. Check whether the overall expenses are below or above budget, to ensure a stable financial position and quickly make any necessary changes.
  • Outliers: Identify any outliers, which can be anything that’s unexpected and/or substantially different from the norm. Outliers can be total monthly or single day amounts, expenses or revenues, and above or below budget. Any anomaly should be noted, and the most likely cause(s) identified.
  • KPIs: Review whether key performance indicators are being met. The indicators shouldn’t be changed during a monthly meeting regardless of performance, but operations might have to be altered in order to meet KPIs. Note if any outliers influenced whether KPIs were met. Keep in mind that these are primarily KPIs for the month. Quarterly KPIs can easily be assessed by checking monthly KPIs.
  • Changes: If necessary as determined by the review of expenses, outliers and KPis, make any appropriate changes. These could be small adjustments or major pivots in activities. Change to meet KPIs and budgetary requirements, rather than make your KPIs and budgets meet actuals. Every change should be immediately actionable in the coming month.

Who Should Attend Monthly Financial Meetings?

All managers should be in attendance at every monthly financial meeting. Managers are the ones responsible for meeting budget requirements and KPIs, and they’re also the most knowledgeable about actual operations. They should know what changes have to be implemented in order to meet goals. Additionally, all managers should attend meetings so that they can brainstorm together and share best practices.

Assistant managers should also be in attendance. Assistant managers are partly responsible for meeting goals, and they’re also responsible for implementing any changes. They need a firm grasp of financials in order to carry out these responsibilities.

A department head, director, or vice president should be in attendance. The head will have to hold managers accountable, and they might also facilitate discussion during the meeting.

Sometimes a question for accounting will arise, but any questions can be relayed to accounting. An actual person from accounting doesn’t have to be present.

Of course, the various roles might be reduced in small businesses. Small business owners should adjust who attends monthly financial meetings according to their business’s size and structure.

When Should Monthly Financial Meetings Be Held?

There isn’t a strict date that monthly financial meetings should be held. In general, holding the meeting within the first 10 days of the new month is a good practice. This allows accounting/managers a little time to prepare reports, yet it’s early enough in the next month to implement changes.

The Quarterly Strategic Meeting

The purpose of quarterly strategic meetings is to monitor general trends and to make longer-term changes to goals and/or activities. The quarterly financial review both analyzes operations in light of multi-monthly trends and adjusts expectations based on trends. Specific higher-level decisions may also be made.

Each business will have its own particular concerns, but these are some good questions to consider:

  • Are trends consistent with expectations?
  • How can operations be adjusted to better perform?
  • Do budgets and/or KPIs have to be adjusted?

These general questions should also be discussed in light of specific data that are tabulated from the entire quarter:

  • Execution: Assess the previous three months in light of budgets and KPIs. Did the actual execution meet projections and goals? Make sure you consider the noted outliers that impacted performance. This assessment will inform decisions later in the meeting.
  • Accomplishments: Check whether the broader quarterly goals were met, and identify any factors that led to meeting or not meeting goals. Whereas execution looks at trends over the past three months, accomplishments focus on the cumulative performance for the quarter.
  • Goals: Are the current goals still relevant? Eliminate any goals that are no longer relevant, and determine whether any still-relevant goals should be adjusted. Also, consider whether any new goals should be instituted. Each goal should be accompanied by specific reason(s) why it’s important.
  • Challenges: Are there any unique challenges anticipated in the next quarter? These can be challenges carried over from the previous quarter, or entirely new ones. They could be related to the season, current operations, or the general economy.
  • Personnel: Discuss whether any personnel changes should be made in light of the previous quarter’s performance. Personnel changes could be new hires, promotions of high performers, or probations/repercussions for low performers.
  • Adjustments: Determine whether any changes should be made in light of the goals, challenges and other details discussed. Changes to budgets, KPIs, operations, or personnel may be appropriate. These are less granular than monthly meeting changes, instead making more substantial adjustments.

Who Should Attend Quarterly Strategic Meetings?

The high-level decisions of quarterly strategy meetings should ultimately be made by high-level leaders within a business. These generally are upper managers, department heads, directors, vice presidents, and possibly even presidents or C-level executives.

Managers should also be present, to explain outliers, trends, and overall performance for the quarter. Additionally, managers can provide a “boots on the ground” perspective. They’ll know why budgets were or weren’t met, and how any strategic changes will interact with actual operations.

When Should Quarterly Strategic Meetings Be Held?

Again, there isn’t an exact date when quarterly strategic meetings should be held. In general, ten to twenty-five days into the next quarter is a good time frame. This allows the third month’s meeting to be held and gives accounting/managers enough time to prepare reports.

Ten to twenty-five days also allows everyone at least a couple of days to reflect on the third month’s meeting before making broader decisions, yet is early enough in the next quarter that changes can be implemented.

How Do Monthly and Quarterly Meetings Impact Cash Flow?

Both monthly financial meetings and quarterly strategic meetings interact with cash flow.

Monthly meetings ensure cash flow remains positive and hopefully as high as possible. These meetings make immediate and actionable adjustments in order to meet cash flow needs.

Quarterly strategic meetings examine cash flow trends and long-term forecasts. These meetings are where cash flow projections and more substantial changes are made.

Hold Monthly and Quarterly Financial Meetings

If you aren’t already, begin holding regular monthly financial meetings and quarterly strategic meetings. You’ll gain a more thorough understanding of your business’s finances, and be able to make more informed short- and long-term decisions.

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