Quarterly Budget Review Checklist

Export the trial balance, P&L, and balance sheet from QBO / Xero / NetSuite for the closed quarter. Confirm the period is locked with the close date set — running variance analysis on an open period gives you numbers that move under your feet.

Compare actuals to budget at the GL-account or department level — whichever your COA is structured around. Calculate dollar variance and percentage variance. Flag any line over the materiality threshold (typically 5% or $10K, set per engagement).

Walk every flagged line with the responsible department head. Distinguish timing variances (will reverse next quarter) from permanent variances (assumption was wrong). The variance memo feeds the forecast update and the audit workpaper.

Tie book balance to bank balance for each operating, payroll, and sweep account. Investigate uncleared items older than 30 days — stale checks and in-transit deposits build up and obscure real cash position.

Pull the aging at 30/60/90/120+. Flag any 90+ balances for write-off or collections escalation. Calculate DSO and compare to the trailing four-quarter trend.

Identify any vendors past terms that risk supply or service interruption. DPO stretching unintentionally (cash-tight) is a different signal than DPO stretching by policy (working-capital management).

Tie YTD capex spend to the board-approved capex plan. Note assets placed in service this quarter for the depreciation schedule update. Flag any unbudgeted capex over the threshold for board ratification.

Stress-test cash on hand plus expected collections against committed payroll, AP, debt service, and capex for the next 90 days. A 1.5x coverage cushion is the conservative target for SMB; under 1.0x means a credit facility draw or AR acceleration is on the critical path.

Drop the closed quarter actuals into the rolling forecast model and add the next quarter to keep the 12-month horizon. Preserve assumptions in a separate tab so the model stays auditable.

Pull weighted pipeline from the CRM and reconcile to the revenue forecast by product line or segment. Adjust close rates if the prior quarter's actual close rate diverged materially from the forecast model.

Walk each department's run-rate against forecast. Capture committed contracts (SaaS renewals, vendor MSAs) separately from discretionary spend so the cuttable layer is visible if a downside case is needed.

Sync open requisitions with HR. Update fully-loaded cost per head (salary + ER FICA + benefits + 401(k) match). Time-phase new hires to expected start dates rather than averaging across the quarter.

Pin specific, measurable targets for revenue, gross margin, opex, and cash. Avoid carrying forward targets unchanged when the prior quarter blew past or fell short — stale targets erode the review's credibility.

Reallocate the opex envelope where the forecast shifted. Document any reductions or increases against prior plan so department heads can adjust hiring, vendor commitments, and discretionary spend.

Send each budget owner their updated department P&L with assumptions and KPI targets. Confirm acknowledgement in writing — the silent-disagreement pattern is the leading cause of mid-quarter overruns.

Schedule timing for any capex over the board-approval threshold, annual insurance renewals, software true-ups, and bonus accruals. Time-phasing matters — a $200K hit in month 1 versus month 3 changes the cash trajectory.

Triggered when liquidity coverage came back inadequate. Options: draw on the line of credit (confirm covenant headroom first), launch a focused AR push on 60+ balances, negotiate extended terms with top vendors, or defer non-essential capex. Document the chosen path in the variance memo.

Put recurring 30-minute reviews on calendar for each budget owner across the next quarter. Drift is cheaper to fix in month 1 than to explain at the next quarterly review.

Spot-check revenue recognition (ASC 606), lease accounting (ASC 842), and any unusual transactions for proper treatment. If the company is on a covenant-bearing loan or preparing for an audit, this is the layer the auditor will retrace.

Assemble the standard package: P&L vs. budget vs. prior year, balance sheet, cash flow, KPI dashboard, and the variance commentary. Keep commentary to the variances over materiality — full-line walkthroughs are noise at the board level.

CFO or fractional controller signs the review complete. Archive workpapers, the variance memo, and the revised forecast to the engagement folder so the next quarter's review and any future audit can pick up the trail.