How to prepare for the 2022 financial year-end?

If you're a business owner, you need to know when to close your 2022 financial year. This choice is made when the company is registered. Here are the rules to follow, and how to prepare correctly.

You are free to choose the closing date of your accounts.

The financial year is the period during which a company records all its accounting transactions. It is compulsory for any individual or legal entity with merchant status, and provides the company's partners with an overall financial picture.

The closing of the financial year allows us to take stock of all the economic events that have affected the life of the company. On this date, the fiscal year is fixed and serves as the basis for the financial statements.

In principle, the choice of year-end is unrestricted, except in the case of liberal professions subject to the non-commercial profits regime (BNC), which must close their financial year on December 31. In all cases, the financial year must be spread over 12 months, except in the first year when it can be extended to 24 months.

The choice of year-end is an important one, as it gives rise to numerous other accounting and tax obligations, such as the annual inventory, the preparation of company financial statements within 6 months of year-end, the preparation of tax returns...

Preparing for year-end closing

Many companies have decided to close their accounts on December 31, 2022. This process should be anticipated by taking stock of the transactions recorded during the year. It is also important to take stock of any risks that need to be provisioned.

If you have a chartered accountant, find out what documents you need for the year-end closing.

This work enables us to draw up 3 documents:

  • the balance sheet, which is a snapshot of the company's assets and liabilities;
  • the income statement, which balances operating revenues and expenses;
  • notes to the financial statements, which provide additional information needed to understand the balance sheet or income statement.

Finalize business and cash flow forecasts

With inflation and supply difficulties on the rise, it's essential to build or finalize a cash flow and business forecast with a chartered accountant.

This document, on which expected cash receipts and disbursements are entered, provides instant information on the month's cash balance and the cumulative balance from one month to the next. It can also be used to check whether invoices can be paid without any problems, thanks to the cash available at the time.

The cash flow and activity forecast can be supplemented by a dashboard made up of several indicators:

  • sales,
  • the conversion rate of sales appointments,
  • the number of quotations signed...

It will be interesting to compare cash flow forecasts with actual forecasts.