What is End of Quarter?
The “end of a quarter” refers to the end of a three-month period on a financial calendar. Companies measure each business year in four, three-month quarters: Q1, Q2, Q3, and Q4. The end of the quarter is an important benchmark because it signals the end of a set period, and serves as a time to review strategic objectives, measure company performance, and set expectations for the upcoming quarter.
Timeframe of a Quarter
Many companies have financial quarters run in parallel with the calendar year:
- Q1: January, February, March.
- Q2: April, May, June.
- Q3: July, August, September.
- Q4: October, November, December.
This makes reporting easier as everything aligns within a specific calendar year. However, some companies have fiscal years start midway through the year. Quarters are always three months long, regardless of a company’s schedule.
Why is the End of Quarter Important?
The end of a quarter is an important time because it signifies the end of a business period. Reports are typically due at the end of the quarter so businesses can measure performance, track objectives, and set new goals.
Each team is responsible for writing their own reports each quarter.
- Sales: Every sales team is responsible for reporting how many successful sales they completed, along with upsells and upgrades, new accounts, renewals, amount of revenue generated, and other types of actions (as needed). These reports are measured against personal objections and larger team goals.
- Marketing: Marketing teams often report the amount of money spent on outreach, what their return on investment was, and various metrics such as reach, engagement, social media campaigns, and more.
- Finance: There are many types of financial reports assembled at the end of each quarter. Some focus specifically on gross profit and overall revenue, whereas others outline cash-flows, balance sheets, and detailed expenses. Executives review financial reports every quarter and present information to external stakeholders, updating them on the overall state of the company’s business.
- Customer service: Reports are often generated for customer service tasks as well, and highlight the number of issues solved, time spent on each call, and other performance metrics.
Setting New Goals and Objectives
Writing reports at the end of every quarter may seem time-consuming, but it’s incredibly important and provides teams with information needed to set new goals and objectives.
At the end of every quarter, individual teams will track their progress. If they’re on target for the financial year, it’s business as usual. But if they’re falling behind? It’s time to regroup, strategize, and address potential issues. If something went sideways in Q2, it needs to be fixed at the beginning of Q3 so the problem doesn’t drag on and cause further roadblocks.
Companies will often compare previous quarters against each other as well to help forecast future growth. If the past three years have had strong Q1s, it’s safe to assume the start of the financial year will always be strong. This allows companies to plan long-term goals and objectives.
And if, for example, Q3 is historically slower at your company, don’t be surprised if your team posts low numbers at the end of that quarter. Look back at previous reports and plan accordingly.