8 Questions to Ask at an Annual Financial Plan Review

After reviewing a number of annual financial plans, both department and company-wide, I’ve created a list of questions to ask in an attempt to help think through the high-level topics and generally make sure things make sense. A financial plan is a detailed financial model incorporating a number of elements like assumptions (e.g. ratios of account executives to sales development reps), budget line items, and specific targets (e.g. sales).

Here are eight questions to ask at an annual financial plan review:

  1. What are the top three takeaways from the plan? What’s the big picture?
  2. What are the biggest risks? What are the biggest differences from the prior year results?
  3. Are the ratios and assumptions in the range of other similar startups (e.g. percent of company in product development as compared to other SaaS startups)?
  4. Does the burn rate and the corresponding revenue growth make sense (e.g. the growth in recurring revenue should at least be larger than burn, if not a multiple of it)?
  5. Is the hiring plan achievable? Is there a pipeline of candidates already in place?
  6. What financing has to take place during the year, if any? Is there enough time to run a process?
  7. What product enhancements need to happen to achieve key targets like renewal rate and average revenue per account?
  8. What do the key metrics like revenue, revenue growth rate, gross margin, and churn rate look like? Are they trending in the right direction?

Annual financial plans are critical for startups, especially post product/market fit. Ask these eight questions and work to understand the big picture.

What else? What are some questions to ask at an annual financial plan review?

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