Year-end close is prepared long before December. What you review in the autumn, with time to spare, can still be corrected or planned; what you discover in January can only be reported. This is the list of accounting and tax points worth having on the table over the coming months so the close doesn’t turn into a race against the calendar.
Accounting close: books up to date
An orderly close starts with accounts that reflect what is really happening in the business. Before the end of the year, check:
- That bank balances match the books and there are no unexplained transactions.
- That issued and received invoices are recorded and there are no receipts or payments left to reconcile.
- The state of inventory, if the business holds any, and how it is valued.
- Depreciation of assets and any impairment or value adjustments.
- Balances with doubtful debtors and the corresponding provisions.
If the books are kept up to date during the year, this review is quick. If not, autumn is the time to put them in order. In our accounting team we prepare monthly closes precisely so that December holds no surprises.
Tax planning before the end of the year
With up-to-date books you can estimate the year’s result and see in advance its impact on corporate income tax or personal income tax (IRPF). This is the moment to weigh decisions that only count if they are taken within the year:
- Planned investments and their timing.
- Profit distribution and pay for partners and directors.
- Use of deductions, allowances or incentives the company may be entitled to.
Planning is not about shortcuts: it is about deciding with data and on time, rather than recording what has already happened.
Our tax advisory team reviews the forecast with you before the close and suggests the decisions that are still possible.
Documentation and formal obligations
Also review the documents that tend to be requested in a rush at the end of the year: contracts and transactions with related parties, company minutes and resolutions, supporting documents for grants and subsidies, and the calendar of information returns due early next year. Having them ready avoids information requests and surcharges.
Coordinating accounting, tax, employment and corporate
The close touches accounting, tax, employment and often corporate matters. Looking at them together prevents a sound decision in one area from creating a problem in another.
Frequently asked questions
When should you start preparing year-end close?
Ideally in the autumn, with a few months to spare: that way you can still take decisions that affect the year’s result.
What is the difference between the accounting close and the tax close?
The accounting close leaves the books complete and correct as at year end; the tax close starts from that result to calculate taxes and prepare the returns. One cannot be done properly without the other.
If you want to review your close in good time, write to us and we will prepare it with you.