Year-end closing work and its preparation are essential prerequisites for correctly closing the accounting period and require careful attention.
Below you will find a brief guide outlining the steps required for the year-end closing.
Steps required at the turn of the accounting period
At the end of the old period:
Open the new accounting period.
If document series are not created automatically for the new period, create them manually.
Run the initialization of the next accounting period — without revaluation for now, as the revaluation exchange rate is not yet known. Transfer stock only.
Transferring stock cards is essential for the correct functionality of e-shops and integrations at the turn of the accounting period.
At the beginning of the new period:
Run the initialization of the next accounting period again, once the revaluation exchange rate is known.
Before you begin matching payments with foreign-currency receivables/payables from the previous period in the new accounting period, you must perform revaluation using the initialization. If you matched payments before the revaluation, cancel the matching, perform the revaluation, and then match again. This will ensure that the correct exchange rate differences are generated.
Stocktaking of inventory, tangible/intangible assets, and cash registers
1. Before starting the stocktake, formally check the warehouse to verify that:
it contains no negative values for physical or financial quantities,
all issue requests have been settled,
under accounting legislation, the stocktake is valid if carried out in the last quarter — for example, as of 30 October.
2. Check the account balances for material and goods acquisitions and resolve any discrepancies
particularly in double-entry accounting
3. Perform a stocktake of inventory (menu Goods – Stocktakes):
physical cash register count — manually count the cash in the register and then verify the result against the balance in the Flexi system (menu Money – Cash Register),
physical warehouse stocktake
4. Physical stocktake of long-term tangible/intangible assets
Document-based stocktaking and tasks related to the accounting close
1. Post inventory differences for warehouse stock, cash registers, and assets.
2. Menu Accounting – Initialization of the next accounting period (can be repeated)
the initialization simultaneously transfers the warehouse stock — see the Transfer warehouse stock checkbox — and calculates exchange rate differences on receivables and payables,
note: if you do not transfer the warehouse stock, its items will not be available in the following year,
3. Create allowance documents for inventory
4. Reconcile receivables and payables with customers and suppliers
5. Create allowances for doubtful receivables
menu Accounting – Accounting outputs – Overdue unpaid receivables/payables, and the report Unpaid receivables/payables by due date,
6. Post provisions
7. Menu Accounting – Internal documents
create exchange rate differences for bank and cash accounts held in foreign currencies, as well as any other exchange rate differences not covered by the initialization,
8. Post accruals and deferrals of costs and revenues
9. Verify bank account balances against bank statements
10. Calculate the differences between accounting and tax depreciation
11. Verify the consistency of the profit/loss figure between the balance sheet and the income statement
12. Check the formal accuracy of posted entries
13. Document-based stocktake — list the balance of each account
14. Determine the profit/loss before tax, calculate the items adjusting the profit/loss under the Income Tax Act, determine the tax base, and calculate and post the tax (including deferred tax if applicable)
15. Prepare financial statements (Balance Sheet, Profit and Loss Statement, and any other required reports)
16. Close the accounting period and transfer the closing balances of synthetic accounts to the next accounting period (see menu Accounting – Initialization of the next accounting period (can be repeated))
17. Lock the accounting period
18. Prepare the tax return
process the documents required for the tax return — in particular, exclude non-tax-deductible expenses, calculate the difference between accounting and tax depreciation, and identify deductible items.