As you finalize your 2009 taxes, it is time to look at how your business has performed during the first 3 months of 2010. If you have not received your March financial statements from your bookkeeper, contact them today for that information. A review of the first quarter will give you insight about what worked well and what did not. In addition, it will help you plan for the next nine months.

When you review the first quarter results, I recommended looking at the following 5 items:

1. Revenue. Did you generate more sales in March than January? If not, why? Is your business seasonal with a lot of sales taking place in January or February? They say the economy is in a slow recovery. Do your revenues show this to be true? If you have the ability to see revenue by customer, which customers generated the most sales in the first quarter? Do you expect this trend to continue? How can you keep them coming back to buy more? Which customers did you spend a lot of time on, but didn’t generate much revenue?

2. Accounts Receivables, if applicable. How many days does it take you to collect payment from your customers? Is this trend increasing or decreasing? Do you have the ability to offer discounts for early payment? For slow paying customers, consider creating a repayment schedule and hold them accountable for paying you on time.

3. Accounts Payable. Do you seem to owe your vendors more in March than what you did in January? Why the change? Are you carrying more accounts payable or did you order more inventory or services in the month of March? It is easy to let the amounts you owe others increase when cash is tight, but be careful of using your vendors as a line-of-credit.

4. Miscellaneous Expenses. Take a look at some of the basic expenses, such as office supplies, meals and entertainment, travel, outside consultants, and telephone/cellphone. It is very likely that you can streamline and reduce the amount spent on some of these items a little more than you already have.

5. Prior year. Compare your first quarter of 2010 to the first quarter of 2009. Look at both your Income Statement (aka Profit and Loss Statement) and the Balance Sheet. How are the two years similar? How are they different? Make a list of 5 items where your business could do better, either by increasing sales or decreasing costs. With this list create 2 action steps you can take over the next 2-4 weeks to implement those ideas.

A review of the first quarter is a great place to assess how you are doing and help you create a course to meet your 2010 goals.