Why first quarter (Q1) matters to a first-time founder
Q1 is often the first checkpoint for annual targets, budgets and investor reporting. Knowing the company’s actual financial year matters because Q1 does not always mean January to March. Mistaking calendar and financial quarters can distort comparisons and deadline planning.
Examples of first quarter (Q1)
A calendar-year software company targets £120,000 of annual recurring revenue growth. By 31 March, its Q1 increase is £24,000, or 20% of the target. The team can now test whether the shortfall reflects timing, weak sales or an unrealistic plan.
Common misunderstanding
Q1 means the first three months of the organisation’s financial year, not universally January to March. A company whose year starts on 1 July has Q1 from July through September. It is also different from QTD, which covers only the elapsed part of a quarter.
When to use it
Use Q1 in budgets, management accounts, tax planning and progress reports when everyone shares the same reporting calendar. State the dates when speaking with investors or overseas partners. For a very early venture without regular reporting, monthly cash tracking may be more useful.