Year-end checklist: what to arrange before the financial year closes

The end of the financial year is a deadline in more ways than one. What you arrange before the year closes still counts for this year; what comes after moves a full year on. That applies to tax allowances tied to the year of investment, to budgets that expire, and to pension contributions in many countries. It is also the moment to close the books so that the annual accounts hold no surprises a few months later.

Rules, rates and deadlines differ by country and change every year. This checklist therefore focuses on what to arrange and when, not on amounts. It works for owner-managed companies, for the advisers who support them and for finance teams in larger organisations preparing a year-end close. Check the details with your accountant or tax adviser.

1. Investments: before or after year-end?

• Timing: many tax systems link investment allowances and depreciation to the year in which an asset is acquired or put into use. A purchase in the last month of the year can change this year's tax bill. Have the effect calculated before you order.
• Payment versus commitment: some allowances depend on when you commit, others on when you pay or when the asset is in use. Know which applies to you.
• Green and energy incentives: energy-saving and environmental incentives often have application deadlines that start at the moment of ordering. A December order can mean a deadline in the first quarter.
• Disposals: selling assets shortly after buying them can claw back allowances you received. Check before you sell.

2. Indirect taxes and receivables

• Private use corrections: VAT or sales tax corrections for private use of company assets are often made in the last return of the year.
• Bad debts: in many countries you can reclaim VAT on invoices that will not be paid. Review overdue receivables and document your collection efforts.
• Gifts and staff benefits: year-end gifts to staff and clients can have consequences for payroll tax and for VAT deduction. Check the rules before you order the hampers.
• Schemes with registration deadlines: special schemes for small turnover, cash accounting or flat rates often require registration weeks before the start of the year.

3. People and payroll

• Use-it-or-lose-it budgets: tax-free allowances for staff benefits are often annual. Unused room may expire.
• Leave balances: statutory leave may expire some time after the year in which it was earned. Map the balance per employee and discuss large balances.
• Fixed-term contracts: list all contracts ending in the first quarter, with the notice dates that apply.
• New year changes: update payroll for new rates, minimum wage changes and collective agreement increases.
• Annual reviews: schedule reviews with goals that link to next year's plan.

4. Owners and directors

• Remuneration and dividends: decide on salary, bonuses and dividends with the tax effect for the company and the owner in view. Timing can matter.
• Loans to and from the company: check balances on shareholder current accounts, document agreements on interest and repayment, and check local rules on borrowing from your own company.
• Pension and savings: contributions to pension schemes often count in the year they are paid. If you want to use this year's room, pay before year-end.
• Time records: where tax relief depends on hours worked in the business, update the records now rather than months later.

5. Closing the books

• Stock count: count stock on or around the last day of the year and identify obsolete items.
• Receivables: assess every open item; agree provisions or write-offs with your accountant.
• Accruals: record costs and revenues that belong to this year but are invoiced next year.
• Reconciliations: bank, intercompany balances and suspense accounts cleared before the close.
• Retention: keep records for as long as your local rules require. That is often several years, and longer for property.
• Filing: diarise the deadlines for annual accounts and tax returns.

6. Look ahead

Use the last weeks of the year to plan. Translate next year's goals into an annual plan and a budget. Compare your cost lines with the sector data for your industry: what stood out this year is the best input for next year's plan. An overview of tax topics is in business taxes.

The complete checklists

The six topics above are the basis. Below you will find detailed tick lists for owner-managed companies, for limited companies and their directors and for employers, a month-by-month plan from the last quarter to the end of the first quarter, and twelve questions for your accountant that often pay for themselves.