The Robins, currently two points off the foot of the Championship, now have a wage bill of £18.6million and chairman Keith Dawe is aware of what needs to be done to make sure the club are ready for the UEFA Financial Fair Play regulations in 2014/15.
"The financial results for the year ended May 31 2012 once again reflect a disappointing and difficult year for the club," he said in a statement on the club's official website.
"The loss illustrates how much work is required to reduce costs and grow our income in order to comply with the new FFP regulations, brought in by the Football League. It also shows how fixed-term contracts for players mean there is no easy or quick solution, but an improvement in recruitment and selection criteria can certainly aid us going forward.
"Manager Derek McInnes has a firm focus on results on the pitch but is equally aware of the financial demands of FFP on the club, and this rounded understanding and determination can only help us in our ultimate aims.
"The main challenge facing the board will be to reduce our losses, achieve FFP, whilst remaining competitive. With good planning and ownership I am confident this can be achieved."
During the last financial year City's turnover fell slightly from £11.9million to £11.8million.