The year-end closing: everything you wanted to know but never dared to ask
The year-end closing: everything you wanted to know but never dared to ask
November 2023 - Is your accountant busy with the year-end closing process but can't imagine much about it? This article explains in non-technical terms what the year-end process entails, what exactly the government expects from you and your accountant, and what you, as a business owner, can do to help your accountant.
Year-end closing is done at the end of each financial year (usually, the financial year coincides with the calendar year, but it does not have to). It is quite a complex and extensive process, which most accountants want to start on time (usually two to three months after the end of the financial year).
The year-end process: 5 steps
When closing the financial year, the auditor roughly goes through five steps. We discuss them in a little more detail below.
Step 1: closing the accounts
This is probably the most time-intensive job for the accountant. It requires a lot of calculation and checking work. All entries are checked, all invoices, proofs of payment and receipts are checked (an important task for you), investments are gone over and depreciation is booked.
Once all this is done, the accountant can calculate the result (profit or loss) and the estimated taxes and draw up the final balance sheet. This also forms the opening balance sheet for the new financial year.
Step 2: the general meeting
At the general meeting (every company is required to organise at least one every year), among other things, the financial statements are presented to the company's directors for approval. This requires the necessary preparations by the auditor. The general meeting must be convened within six months of the end of the financial year.
Step 3: the annual accounts
The annual accounts are the financial report for the financial year. It contains four sections:
· the balance sheet
· the profit and loss account
· the notes
· the social balance sheet
When the annual accounts are complete and approved by the general meeting, they are filed with the National Bank of Belgium. The auditor also takes care of this.
Step 4: corporation tax return
Corporate taxes are calculated based on the company's profit or loss and then declared via BizTax. This also involves a number of administrative obligations that the accountant fulfils for you.
Step 5: the annual report
The annual report brings together the balance sheet, the profit and loss account, the corporate income tax return, the annual accounts, the reports of the general meeting and the necessary annexes (sheets, certificates, etc.). The annual report is the final part of the financial year and, thus also the end of the closing process.
The year-end: what can you do to help your accountant?
Make sure you provide all outstanding invoices (incoming and outgoing) to your accountant as soon as possible. The same applies to account and credit card statements.