There are two kinds of year-end close. One consists of reviewing, adjusting and signing off. The other means reconstructing twelve months of accounts in three weeks while trying to remember what that payment in March was.

The difference is not the size of the company. It is whether the work was kept up to date.

First: make sure everything is there

  • All sales invoices, including those issued on the final day of the financial year, with no unexplained gaps in any numbering sequence.
  • All supplier invoices, including those still sitting in someone's drawer or inbox.
  • All bank transactions for the period, from all accounts.
  • Expenses paid in cash or with a personal card, which are the items most consistently missed.

Reconciliations

Reconciliation means that the accounting record agrees with the corresponding external evidence. If any of these three areas do not reconcile, the close is not ready:

  1. 01
    BanksThe ledger balance for each bank account must agree with its statement at the closing date. Legitimate differences—outstanding cheques or transactions in transit—must be listed individually.
  2. 02
    Customers and suppliersEvery customer and supplier balance must be explainable. An old balance that no one is chasing often means a paid invoice was not cleared, or a receipt was allocated to the wrong customer.
  3. 03
    TaxesReconcile the IGI account balances with the returns filed during the year. Explain every difference—such as a pending correction or an unrecorded journal entry—before closing the period.

Year-end adjustments

These journal entries make the year's profit or loss reflect what actually happened during the year, rather than only what passed through the bank:

  • Accruals and deferrals: expenses paid in advance that belong to the next year, and income received in advance that has not yet been earned.
  • Depreciation of fixed assets, applied consistently with previous years.
  • Inventory, where relevant to the business: the physical count and its valuation.
  • Impairment of customer balances that are unlikely to be collected.
  • Provisions for known obligations not yet invoiced.

Financial statements and filing

Once the figures are final, prepare the annual accounts under the Andorran accounting plan and file them with the relevant register by the deadline that applies to your company.

Register of Commercial Companies Govern d'Andorra — Registre de Societats Mercantils

The exact deadlines and required documents depend on the company's legal form and size. Confirm them against an official source or with your adviser before working backwards from the deadline.

Then lock the period properly

A closed period means no new journal entry can be made without leaving an audit record. If the period can be reopened silently, the accounts you filed and those held in the software can diverge without anyone knowing.

A close that can be reversed without a trace is not a close. It is merely a convention.

If a period must be reopened—it happens, and is sometimes necessary—make it an explicit action with an author, date and reason. That is the difference between correcting a record and erasing it.