What to look at, how to prioritise what you find, and what to do next
The financial review most founders have never had
A financial review is not the same as preparing your annual accounts. It is not a tax return, a management accounts pack, or a meeting to go through the numbers for the year just ended. It is a deliberate, structured assessment of the business’s financial position, covering where you are, how you got here, whether the current structure is serving you well, and what the priorities should be for the period ahead.
This article is a practical guide to running a financial review – covering the five areas every review should address, how to prioritise what you find, and how to turn the output into a set of specific decisions.
A financial review is not a sign that something is wrong. It is a sign that you are running the business with the same deliberateness you would apply to any other significant decision.
Timing note: the best time for a financial review is before the new financial year begins, so that any structural, tax, or operational changes can be implemented with maximum runway. The second-best time is now, regardless of where you are in the year.
Why most founders never do a proper financial review – and what it costs them
The reason most founder-led businesses do not conduct a formal financial review is not lack of interest. It is lack of structure. There is no obvious prompt, no filing deadline, no regulatory requirement. Unlike tax returns and annual accounts, a financial review has no due date. Which means it is perpetually deferrable.
But there are things a review consistently surfaces that day-to-day financial management does not:
Tax positions that have drifted out of alignment with the founder’s current income level and business structure
Remuneration arrangements that have not been revisited since they were set up, often years earlier
Overhead growth that has outpaced revenue growth, quietly eroding margin
Assets or reserves sitting in the business that could be working harder or held more tax-efficiently
Structural decisions that were appropriate at an earlier stage but are now creating unnecessary risk
The businesses that benefit most from financial reviews are not the ones in difficulty. They are the ones doing well because that is when the most value can be unlocked.
The five areas every financial review should cover
Area 1 – Profitability and margin
Examine whether the business is as profitable as it should be, and whether that profitability is improving, stable, or deteriorating. Key questions:
— What is the gross margin, and how does it compare to prior year and industry benchmarks?
— Are overhead costs growing in line with revenue, or faster? If faster, is this planned investment or uncontrolled cost creep?
— Are there specific clients, projects, or service lines that are significantly more or less profitable than the average?
Area 2 – Cash position and cash flow
Profitability and cash are different things, and a review that focuses only on the P&L is incomplete. Key questions:
— What is the current cash balance, and is it sufficient for the next three to six months of operations?
— What is the debtor position? How much is owed to the business, and how old is that debt?
— What are the upcoming significant cash outflows: VAT, corporation tax, payroll, and is there a clear plan for meeting them?
Area 3 – Tax position
Tax is not a year-end event. Key questions:
— What is the estimated corporation tax liability for the current year, and is sufficient cash being set aside?
— Is the director remuneration structure still optimal given the current year’s income level?
— Are there any tax planning opportunities: pension contributions, timing of expenditure, capital allowances that should be acted on before the year-end?
Area 4 – Structure and ownership
Whether the legal and ownership architecture of the business is appropriate for its current stage. Key questions:
— Is the current legal structure still the most appropriate for the business’s size, risk profile, and plans?
— Are there any assets held in a way that creates unnecessary risk or tax inefficiency?
— If the founder has plans to sell or take on investment in the next three to five years, are structural decisions today consistent with those plans?
Area 5 – Forward planning and priorities
Translating findings into a set of priorities for the period ahead. Key questions:
— What are the two or three most important financial decisions the business faces in the next six months?
— What financial targets: revenue, margin, cash reserve, are realistic and worth working toward over the next twelve months?
— What is the one financial risk that deserves the most attention, and what is the plan for managing it?
How to prioritise what you find
A thorough financial review will typically surface more issues and opportunities than can be addressed simultaneously. A useful prioritisation framework has three tiers:
|
PRIORITISATION FRAMEWORK: Act immediately – anything that involves a compliance deadline, a cash shortfall within 90 days, a tax charge that can still be reduced before year-end, or a structural risk that is currently unmitigated. Plan and schedule – anything that requires preparation time: structural changes, remuneration restructuring, pension planning, or decisions that interact with future events. Monitor – anything that is not urgent but should be tracked: margin trends, debtor aging, overhead growth relative to revenue. These become agenda items for the next quarterly review. |
The goal of prioritisation is to leave the review with three clear decisions and a timeline, not ten good intentions and a vague plan to revisit.
The difference between a review and a plan, and why both matter
A financial review is a diagnosis. A financial plan is a prescription. The review tells you where the business is. A financial plan takes the output of the review and turns it into a forward-looking document: targets, a timeline for changes, a remuneration structure for the coming year, and a framework for tracking progress.
The minimum viable financial plan
A revenue and profit target for the next twelve months, with a sense of what the business needs to do differently to achieve it
A remuneration structure for the coming year: salary, dividends, and pension contributions — agreed before the tax year begins
A cash reserve target the minimum cash balance the business should hold at all times, and the plan for reaching and maintaining it
A list of two or three structural or operational decisions that will be made in the next twelve months, with an owner and a timeline for each
A plan that is 80% right and acted on is worth more than a plan that is 100% right and sits in a folder.
How to turn a review into a set of decisions: a practical checklist
| 01 | List every finding from the review in one place Before prioritising or planning, capture everything the review surfaced in a single list. This prevents important findings from being lost in the conversation. |
| 02 | Apply the prioritisation framework Sort each finding into the three tiers: act immediately, plan and schedule, or monitor. The act immediately category should have a named owner and a deadline before you leave the room. |
| 03 | Agree the remuneration structure for the coming year Use the review to set the salary and dividend structure for the year ahead, not to confirm what was done last year, but to determine what is optimal given this year’s income projections and the applicable thresholds. |
| 04 | Set three financial targets Agree on three specific, measurable targets for the next twelve months. Revenue, gross margin percentage, or cash reserve level are the most useful starting points. |
| 05 | Schedule the next review before you finish this one Put a date in the diary (quarterly for the check-in, annually for the full review) before the meeting ends. A review that is not followed by another review is a one-off event. A review built into a rhythm is a discipline. |
The value of a financial review compounds when it becomes part of the rhythm of the business rather than an occasional exercise..
From the MNG Strategia Advisory Team
The financial review described in this article is not a specialist engagement reserved for large businesses with complex structures. It is a practical, annual discipline that any founder-led business with serious ambitions should build into how it operates.
At MNG Strategia, the annual review is a core part of how we work with clients at the Strategia Growth and Strategia Partner relationships. The quarterly check-ins, the remuneration discussions, the structural conversations: all of it is more useful when it sits within the context of a review that has established where the business is and where it is trying to go. A financial review should leave you with clearer priorities, not simply another set of numbers.
This article is provided for educational and informational purposes only. It does not constitute legal, tax, or financial advice. Tax rules and thresholds referenced are based on the current UK tax year and are subject to change. Always seek personalised advice from a qualified professional before making decisions. MNG Strategia is not liable for any decisions made on the basis of this artic