Term
What is year-end close? Meaning and explanation
The year-end close (jaarafsluiting) is finalising the administration for a financial year, with corrections, depreciation and balance sheet items, as the basis for the annual accounts and the income or corporate tax return.
Definition
The year-end close (jaarafsluiting) is finalising the administration for a financial year, with corrections, depreciation and balance sheet items, as the basis for the annual accounts and the income or corporate tax return.
Also known as: Jaarafsluiting, Jaarafsluiten, Year-end close, Boekjaarafsluiting
In the year-end close, the administration for the whole year is checked for completeness and accuracy. This includes reconciling bank, cash and VAT accounts, reviewing open receivables and payables, booking depreciation, inventory movements and accruals and deferrals through journal entries, and checking the current account with the director-major shareholder. The financial year is then closed and the balances are carried forward to the new year.
For a firm, the year-end close is when the quality of ongoing processing becomes visible. An administration kept tidy throughout the year mainly needs review and closing entries. A messy one first needs repair work, and VAT errors that surface then may require a correction. The better the month-end closes, the faster the annual accounts.
Autoboeker focuses on the ongoing processing that precedes the year-end close: booking invoices and receipts with a confidence score and explanation, checking VAT, matching bank transactions (Exact Online, Twinfield and SnelStart) and requesting missing information through client questions. Every action is recorded in the audit log, so at year-end it is traceable how an entry came about.
Example
At year-end, the firm books depreciation on a van, records an energy invoice still to be received as an accrual and reconciles the VAT accounts with the returns filed.
FAQ
Questions about year-end close.
The year-end close is the work in the administration: checking, correcting and making closing entries. The annual accounts are the report prepared afterwards, with the balance sheet and profit and loss account.
If the difference is no more than 1,000 euros, you may correct it in the next return. Above 1,000 euros, you file a correction within 8 weeks.
Further reading
Related in the knowledge base.
Guides
Preparing for year-end: getting the books in order
How to prepare year-end from the bookkeeping side: complete and reconciled books, open items, accruals, a VAT check and an audit trail for the accountant.
10 min readRead the guideWorkflowsMonth-end close checklist for bookkeeping firms
Checklist for month-end and quarter-end close: all documents in, bank reconciled, suspense accounts cleared, accruals booked and VAT checked before filing.
10 min readRead the guideSee Autoboeker in your own administrations.
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