The Annual Financial Review, and What to Look At

Seven questions, once a year, and the timing matters more than the depth.

Run it two months before your year end

Not after. Before.

Two months out, everything is still a decision. Your Small Business Relief position, your write-offs, your related party documentation, your cut-off rule.

Run the same review two months after the year end and it is a post mortem.

1. Which customers actually make you money

Revenue by customer, less the direct cost of serving them.

Most owners can name their largest customer by revenue. Far fewer can name their most profitable, and the two are often different.

Also look at concentration. If one customer is more than about 30% of revenue, your business plan and your cash flow are really theirs.

2. Which services actually make you money

Same exercise by service line.

Businesses routinely discover they are subsidising one line with another, and have been for years, because nobody separated the costs.

3. What happened to your margin

Gross margin this year against last. If it moved, you should be able to say why in one sentence.

If you cannot, that is the most important thing the review will surface. Margin moves for reasons, and the reasons are usually pricing, input costs or mix.

4. Where the overheads went

Not the total. The list, biggest first.

Ask what each buys. Subscriptions nobody cancelled, services at rates agreed years ago, and costs that grew with the business and never got reviewed all live here.

5. What is in your receivables

Not the total. The ageing, with names.

Anything over 90 days needs a decision this year rather than carrying into next.

6. What your balance sheet is hiding

The director's account. Related party balances. Fixed assets that may no longer exist. Stock that will not sell at cost. Provisions that were never revisited.

These accumulate quietly and surface in an audit. Better to surface them yourself.

7. Where your tax position will land

Revenue against AED 3,000,000 for Small Business Relief. Whether you hold losses worth protecting. Whether your free zone income actually qualifies.

Answer these before the year closes and you have choices. After, you have a computation.

The output

One page. What you found, and what you are going to do about each item.

If it runs longer, it becomes a document rather than a set of decisions.

Why owners skip it

Because nothing forces it. The audit is required, the tax return is required, the review is not.

That is exactly why it is the one that would have changed something.

Where we fit

We run this with clients ahead of their year end. Send your management accounts, debtor ageing and revenue by customer.