20-Minute year-end financial review (before 2026)

“This year didn’t go the way I expected.”

If you think like this, you’re not alone. (We feel you 🤝)

2025 has been a year like that. With squeezed margins, inflation, and messed-up supply chains, there’s no certainty about anything. Many businesses spent the year reacting instead of executing.

That’s why you need a quick year-end financial review like this.

Once you see the patterns in your 2025 numbers, you’ll know exactly where to invest, where to cut, and what goals make sense for 2026.

If you use a tool like Upmetrics, most of these numbers sit in one place already. If not, a simple spreadsheet or accounting export works fine.

1. Pull your core numbers (3 minutes)

Start with the four numbers that define your entire year:

• Total revenue
• Total expenses (grouped into broad categories)
• Gross margin
• Net profit or loss

You don’t need perfect bookkeeping; we’re just gathering some key numbers scattered across financial statements and reports.

If that’s the case, you may need to spend a few minutes gathering those reports.

In my case, I used Upmetrics’ financial forecasting tool, and all my financial reports are in one workspace. So things were easier.

Tip: If you don’t have Upmetrics, you may use ChatGPT, Gemini, or any LLM model of your preference. Feed them your financial reports and ask questions as I did.

I simply asked our AI financial analyst:

“Give me these financial figures for the year 2025: total revenue, total expenses (grouped into broad categories), gross margin, and net profit or loss”.

2. Spot your three biggest cost drivers (4 minutes)

Look at where your money actually went this year. Not every expense matters — only the categories that shaped your margins.

Focus on categories like:

• Labor or contractor payments
• Product or service delivery costs
• Marketing and ads
• Software and tools
• Rent, utilities, or overheads

Pick the three categories that stand out the most; either because they grew steadily, spiked in specific months, or stayed high throughout the year.

This step matters because these three categories usually explain 80 percent of your cost pressure. Once you know them, planning next year’s budget becomes much easier.

You’re not trying to fix anything yet — just naming the areas that shaped your year.

3. Review your cash flow patterns (4 minutes)

Now look at the year, month by month. Look at the movement of cash. We’re trying to understand the steadiness of your cash flow.

Focus on two points:

1) Months where cash balance dropped faster than expected

These usually point to timing problems, delayed payments, inconsistent sales, rising input costs, or one-off surprises.

2) Months where cash stayed steady or increased

These show when your pricing, demand, and cost structure were working together without stress.

3) Any irregular spikes or drops

A sudden rise often points to a one-time boost, whereas a drop suggests unexpected cost or wrong timing.

We’re not conducting a detailed cash flow analysis, but understand how predictable (or unpredictable) the year felt.

This quick monthly overview gives you a clearer sense of how the business actually behaved. This  becomes useful when you decide how aggressive or conservative your 2026 plan should be.

4. Compare planned vs actual (4 minutes)

Look at the numbers you expected for the year and compare them to what happened. I suggest looking at the following areas:

• Revenue: Did you come in above, below, or close to your target?
• Expenses: Did any category grow more than you anticipated?
• Margins: Did they stay steady or shrink across the year?
• Cash flow: Were the swings larger than you planned for?

Mark any gap greater than 10–15 percent. These differences usually reflect shifts in demand, pricing, cost pressure, or operational strain.

This comparison is a quick way to see which assumptions need updating before you create your plan for 2026.

It gives you the baseline needed to set numbers that match the current environment, not last year’s expectations.

5. Identify your top three steady performers (2 minutes)

Look back at the year and note the areas that consistently worked. These are the parts of the business that supported revenue, demand, or stability.

Examples include:

• A product or service that brought steady sales
• A marketing channel that generated reliable leads
• A customer segment that converted well
• A partnership that produced predictable results

You only need three. These show where the business has strength and where you can place more focus next year.

They become the foundation for your 2026 plan, because zeroing in on  what worked is often more valuable than adding something new.

6. Identify your top three weak spots (2 minutes)

Next, list the areas that took more time or money than they returned. These often explain why growth felt harder than expected.

Common examples:

• A low-margin offer that consumed resources
• A marketing channel with high cost and low output
• A customer segment that required more support than it produced
• Delays or bottlenecks in delivery

Again, keep the list to three. These are the areas that will need either refinement, reduction, or removal in 2026.

7. Set three financial targets for 2026 (1 minute)

Now that you’ve reviewed the year, set three numbers you want to improve in 2026. Let’s keep them simple and tied directly to the business model.

Here’s what you should choose:

1) One revenue target

Something you can measure month by month.

2) One cost-efficiency target

Often tied to labor, production, or marketing spend.

3) One cash-flow target

A number that reflects stability, such as a minimum monthly cash position or a reduction in volatile months.

These three numbers will act as your anchors for the next year. They keep the plan focused and prevent you from spreading yourself across too many goals.

You’re not trying to predict the entire year — you’re giving yourself a clear direction built on real data from 2025.

All set: Let’s plan for the solid 2026

Now you have a fair understanding of how your business performed this year. You know where you were strong, where things slowed down, and what your numbers actually looked like month to month.

Use these insights to shape your 2026 plan.

Set a few focused targets, build projections around them, and keep an eye on how your numbers move through the year.

If you prefer keeping everything in one place, a tool like Upmetrics can help you map out next year’s projections and monitor your progress as you go.

When you track your plan through the year, you can adjust as you learn and grow, not wait for the next annual financial review.

That’s it for today. Wishing you a lot of success in 2026.

Until the next time,

Happy Business Planning 🙂