The year-end closing is prepared before 31 December. Some decisions can no longer be taken after that date, and information is easier to gather while the year is still fresh. Here are the points to review with your chartered accountant from the autumn.
This checklist is for businesses whose financial year ends on 31 December. If your year end is different, it still applies, adapted to your calendar.
Before 31 December: the decisions to take
Investments
Buying equipment, a vehicle or fittings before or after the year end does not have the same effect on the financial year. Review your projects and their financing before deciding.
Director’s remuneration
Amount of the year’s remuneration, salary versus dividends, social contributions: choices are prepared before the end of the financial year, with full knowledge of the facts.
Bonuses and employee savings
Exceptional bonuses, profit-sharing schemes, employer contributions: their set-up and timing follow precise rules, to check in advance.
Director’s social protection
Protection and pension contracts, especially for self-employed directors: the year’s payments are made before 31 December.
The information to gather
- Stock: plan the date and organisation of the physical stocktake on 31 December, and the valuation details.
- Invoices: list the customer invoices to issue and the supplier invoices to receive for the financial year.
- Bank: check that all statements have been sent and that transactions are supported.
- Customer receivables: identify old unpaid invoices or customers in difficulty, which may justify an impairment.
- Disputes and commitments: report ongoing disputes, guarantees given and significant commitments.
- Loans: gather the repayment schedules and the year’s new contracts.
- Partners’ current accounts: check the year’s movements.
December deadlines
- 15 December Balance of the business property tax (CFE), for most businesses.
- 15 December Last corporate tax instalment of the year, for companies subject to it.
- During December Usual social and VAT returns, according to your regime.
After 31 December
- Sending the last information Stocktake, invoices, statements and information requested.
- Closing work Review of the accounts, year-end entries, calculation of the result.
- Discussion of the result Reading the accounts, points of attention, decisions on allocation.
- Returns Tax return package and profit returns in the spring.
- Approval of the accounts Within six months of the year end, then filing with the registry where required.
Our support
A pre-closing review in the autumn lets you anticipate rather than simply observe. Our clients prepare it with us as part of their engagement letter; if you are not yet a client, let’s discuss it at an introductory meeting. See bookkeeping and annual accounts
Frequently asked questions
Why prepare the closing before 31 December?
Because some decisions, such as an investment, a bonus or a protection insurance payment, must be taken during the financial year to take effect in it. After the year end, it is too late to change them.
Do I need to do a physical stocktake?
Yes, if you hold stock: goods, raw materials, finished products. The stocktake on 31 December values them and gives the real result of the financial year.
What about invoices received in January for December purchases?
They belong to the financial year in which the delivery or service took place. Send them with the period concerned: they will be recorded in the right year.
Should I pay myself dividends or a salary?
It depends on your status, your personal situation and your social protection needs. The choice is simulated before deciding; there is no single answer.
When will my annual accounts be ready?
It depends on how quickly the information is sent and on the complexity of the file. For a 31 December year end, profit returns are generally due in the spring.
My year end is not 31 December: is that a problem?
No. The year end can be set at another date; the same steps apply, shifted to your calendar.
The forecasts, cash-flow plans, dashboards, simulations, studies and analyses mentioned above are additional engagements, provided on request and quoted in advance in your engagement letter: the more frequent they are, the higher their cost.