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Financial planning for Q4

The kids are back at school, the Christmas season is approaching, and businesses are moving their focus towards Q1 2023. But September is the perfect month to plan to have a great ‘end of year’ in business, so in this blog we are going to give you some pointers on what you can do now to make sure that your business ends this year with a bang! This is especially important in 2022 as inflation is spiralling ever upwards and consumers are cutting back on their spending. Rising costs and changes in the external trading environment mean that this is a good time to take stock and review your financial planning, Q4 budgeting and forecasting to ensure a profitable end to 2022 and establish firm foundations for 2023.

Change is unsettling, but it gives you an opportunity to adapt and ensure your business can grow. Taking stock of where you are now, reviewing what has worked and what can be improved will put your business on a sound footing during these changing times. If you or your management team struggle to understand how historical data can be used to move your business forward, Mellor Financial Training Courses are designed with you in mind. Our trainers cut through the financial jargon to make the course relatable to your business. Contact us to find out how our finance for non-financial managers course can help to bridge that gap in financial knowledge.


Historical data can be your friend when financial planning, so make sure your records are up to date so that you can really understand what is going on. Here are some leading indicators to help you to review where you are now and highlight any changes you may need to implement.

Processes: Have you made changes to internal processes, such as new purchasing/ordering systems? How successful have they been following implementation? Going forward, can more improvements be made to make sure you maximise efficiency throughout the final quarter? Have staff been trained adequately?

Resources: Have they been allocated correctly? Have employees or machines been idling, or have orders been refused because the necessary resources were not in place? Is resource allocation logical and effective to meet your sales forecast for Q4?

Employees: Have you taken on more staff? Have they been trained and reviewed? Are the KPIs for your staff on target or do they need reviewing/amending? Do you have the right number of people in place, or should you let people go to make sure your business is at its optimum strength to meet targets? This could be the best time of year for personal performance reviews, so you can set new KPIs based on your audit, determine where training is needed, and ask employees for their feedback on new processes and customer relationships.

Then we can consider outputs:

Sales: Look at the most recent sales data, plus the figures from Q4 last year, so you can see the relative performance and whether there is a trend. Do some products or services sell more in Q4, have you got enough stock or resource to meet demand? Can you allocate resources into building more stock of those lines? This is where forecasting seasonality will be especially useful for business planning. If your business experiences seasonal fluctuations and Q4 is your busiest time, seasonality forecasting will highlight which lines may need investment or extra resources, where costs can be cut or resources reallocated, and how you can reach maximum sales revenues.

Costs: A cost analysis of the year so far compared to prior years will reveal the baseline of revenue your company needs now to keep going, and this may be different to what you have known in the past. With the rise in inflation and energy costs, you need to factor in the increases for Q4 to see the new baseline figures. Compare them to Q4 2021 to see the percentage increase in costs, so you can make decisions about pricing and promotional strategies to maintain business performance.

Cash flow: A cash flow analysis will reveal outstanding payments due from customers, so you can focus on getting them into your bank account as soon as possible. It will also help you to identify trends and potential inefficiencies. Understanding where your money goes and when is crucial for financial planning.

Profit/Loss Statement: These documents are not just for the end of the financial year. You should also review them either monthly or quarterly to ensure you know what the current financial situation is in order to make adjustments in your financial planning for the next quarter.

For more insights into Q4 planning, read this article from LinkedIn.

Analysing this data will help you to identify whether you have the right level of resources for the final quarter and that your resources are allocated where they will be most effective in helping you to achieve your goals. You will also clearly see where there are gaps, so you can make the right decisions in the right areas of your business to take advantage of increased demand. For many businesses, Q4 is especially affected by seasonality so it is important that you are prepared and know what you can do to streamline your business and what actions you can take to improve profitability. We covered this topic in some depth in my blog about understanding profitability.

Financial planning in Q4

Reviewing the historical data will help you to put a financial plan in place to build resilience, aiding your business to withstand the effects of rising inflation, seasonality and soaring energy prices. Acquiring financial knowledge gives you the insight to adapt or diversify so you maintain that baseline revenue even when income from your normal revenue stream may tail off. You may like to ready my blog about financial resilience for more of an insight into how knowing how to interpret financial information can help with financial planning, business resilience and making important decisions that move your business forward. For tips on things to do in your business as the beginning of Q4 you could read this article at

If you are struggling to understand financial terms and have no idea about financial planning, there is no need to shoulder the responsibility of making financial decisions on your own. Talk to us at Mellor Financial Management to find out how we can use the skills and knowledge gained from 20+ years as senior finance management specialists to transform your business. We also offer training courses that will build financial confidence in your team.

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