Year-End Financial Review: How to Reflect on Your Business Finances

As we approach the end of 2025 (where has the year gone, honestly?), now is a good time to pause and reflect on the year you’ve had and think about how you want your business to look in 2026. A year-end financial review isn’t just a “nice to do”, it’s one of the most powerful tools you use to strengthen your cashflow, improve profitability, and set yourself up for success.

It’s also the ideal moment to make sure the festive season doesn’t undo months of progress. We’ve all been there; one too many expenses in December and suddenly January feels like climbing Everest without oxygen (not that we’ve climbed Mt Everest, mind you).

Before you get swept up in year-end craziness, let’s take a clear-eyed look at your numbers and what they’re really telling you.

2025: A Challenging Year for Many Businesses

There’s no denying it, 2025 has been a tough year for many businesses. Terrible things going on in the world aside, our domestic cost of living crisis only seems to be getting worse. There are constant reports on rental (in)affordability, housing (in)affordability, the rising costs of groceries. Not even chocolate is safe, if you can remember the staggering prices of Easter eggs earlier this year. And don’t get us started on shrinkflation.

This cheerful introduction is just to say, with all this in mind, be kind to yourself as you reflect over the year and consider your financial review. Our hope for you was that it was your best year yet, but if you’re disappointed with how things have gone, know that many things have been outside of your control and it’s not too late to implement best accounting practices to improve your game from here.

Key Questions to Ask in Your 2025 Financial Review

At Proactive Accounting, we’re big believers in financial mindfulness; checking in with your numbers, noticing what’s working, and adjusting before problems get bigger.

Here are questions every business owner should ask before 2026 arrives:

1. Where did your money actually go?

What did you spend your money on and if you could rewind time, would you spend it that way again? In other words, were the things you spent your money on really worth it? Sure, your staff may have appreciated the fancy espresso machine and the single-origin coffee beans imported from Guatemala, but perhaps that money would have been better off going somewhere else or kept aside for a rainy day.

Understanding your spending patterns is the first step to improving them.

2. What recurring expenses can you reduce or cancel?

What recurring expenses do you have but didn’t use or maximise? Audit all your subscriptions, memberships, and retained services.
Are you paying for tools no one uses? Could you renegotiate terms?

A leaner expense base means greater cashflow.

3. What were your most profitable products or services?

Break down your income streams:

What product/service earned the most money in 2025?
What product/service earned the least?
What product/service took the most time to deliver for the lowest return?

Sometimes “less is more.” Streamlining your offering can significantly improve profitability. You could even consider bundling your products/services to create greater value and profitability.

4. Are you waiting on payments?

December is the worst time to leave unpaid invoices lingering. Follow them up now before clients disappear for the holidays.

While you’re at it, review your payment systems. Do you need automated reminders? Deposits? Better terms? Small changes can massively strengthen your cashflow.

Celebrate… but Do It Mindfully

As the year wraps up, you deserve to let your hair down and kick up your heels. Just be mindful not to overdo it, this season is both joyful and financially dangerous.

Not to sound like the Grinch, but this time of year can be a financial deathtrap if you aren’t careful. Between client gifts, team events, bonuses, decorations, and holiday closures, the expenses can pile up fast. Meanwhile, your income may slow down as clients disappear to the beach.

Overdoing it, will mean paying the price throughout 2026, especially if you’ve resorted to financial pitfalls and traps like credit cards with high interest rates or draining your savings accounts.

How to enjoy the holidays without sabotaging 2026:

Focus on what matters

Remember why you started your business in the first place and what you are trying to achieve. Let these motivations guide your spending priorities, always.

Keep celebrations meaningful, not excessive

We know how easy it is to get swept up in the excitement and sentimentality of this time of year. But recognising achievements can be done without going overboard. Grand gestures are, well, grand, but they’re not essential. Small tokens of gratitude will be just as appreciated. Especially if it means a calmer, happier boss next year when you’re not battling the pressure of unmanageable credit card debt and tax obligations you’ve forgotten to budget for.

Set a budget and stick to it

It’s always important to stick to a budget, but this time of year, with all its ongoing expenses, it’s especially important. Set your limits and monitor your spending closely so you know when enough is enough.

Keep your records up to date

It’s a busy time of year but your regular obligations aren’t taking time off, so don’t make the mistake of letting things like record keeping slide. The ‘New Year you’ won’t thank you when you’re scrambling to find receipts for the Christmas party catering or those client gifts you ordered.

Don’t undo the R&R you’ve earnt over the holiday break by returning to a mess of your own making.

Set Clear Financial Goals for 2026

After completing your financial review, this time of year is the perfect time to look ahead and set some goals for the new year.

Your 2026 goals should be:

Achievable
Aligned with your long-term vision
Supported by realistic financial planning

Here are some strategies worth considering:

Try the tried-and-true 1% method

Small, consistent improvements create enormous long-term impact. We use this strategy ourselves and we’ve seen it transform businesses. Read about the 1% method.

Create a 2026 holiday fund

If you can put money aside throughout the year to cover the increased expenses incurred at Christmas time, you’ll feel the silly season strain a lot less in 2026.

Implement the Profit First method

Rather than profit being “whatever is left,” pay your profit first and run the business on the remainder. This ensures:

Predictable profit
Controlled spending
Better cashflow discipline

If you’ve found finances stressful this year, Profit First can be a game changer.

Ready to Make 2026 Your Most Successful Year Yet?

A clear year-end financial review gives you the insight, clarity, and confidence to start 2026 strong.

If you’d like expert support, practical strategies, or help implementing better financial systems, the team at Proactive Accounting is here to help.

2025: A Challenging Year for Many Businesses