Year-end closing

What does year-end closing mean?

Year-end closing (boekjaarafsluiting) is the process in which the books are reconciled, corrected and made ready for the annual accounts.

Check bank, accounts receivable, accounts payable, inventory, depreciation and accruals. Locking the software period does not replace preparing, adopting or filing the annual accounts.

How does it work?

The closing starts with reconciliation: every balance sheet balance in the ledger gets support from outside the books. The bank agrees with the statement of the last day, accounts receivable and payable with the open-item lists, inventory with the count, the VAT account with the returns, payroll tax with the last payroll tax return and every loan with the lender's statement.

Then come the entries that allocate the result to the correct year (art. 2:362(5) DCC): depreciation, invoices still to be received, prepaid costs, revenue invoiced in advance, the write-down of inventory and receivables, the movement in provisions and, last of all, corporate income tax. Every legal entity must have a balance sheet and a statement of income and expenses on paper within six months after the end of the financial year (art. 2:10(2) DCC); for a BV the shorter preparation period of five months applies.

Example

A BV closes 2025 with a provisional result of € 62.000. At closing it books: depreciation of equipment € 8.000; an energy invoice for December of € 1.400 that arrived in January; an insurance premium for 2026 of € 3.600 paid in December, which moves from costs to prepayments; and a write-down of € 2.500 on a receivable from a customer in suspension of payments. Result before tax: 62.000 − 8.000 − 1.400 + 3.600 − 2.500 = € 53.700. Corporate income tax at 19%: € 10.203. Result after tax: € 43.497.

In the annual accounts

Work process preceding the balance sheet, P&L and notes.

Difference from preparing the annual accounts

Year-end closing is bookkeeping work: making the books complete and balanced. Preparing is a board act: the board chooses accounting policies, classifies the items, writes the notes and signs (art. 2:210(1) and (2) DCC). The general meeting then adopts them. Locking the period in the bookkeeping package is neither; it only prevents further posting to the old year.

Common mistakes

• Leaving intermediate accounts open
• Equating closing with adoption

What should you watch for?

• Work through a fixed sequence. The year-end checklist goes through the items; Exporting and checking the trial balance describes the final check.
• Post the accountant's corrections back into the books, so that the opening balance sheet of the new year equals the closing balance sheet of the annual accounts.
• A micro entity does not have to include accruals for other operating costs, if it states this at the foot of the balance sheet (art. 2:395a(3) DCC). For turnover, wages and depreciation the allocation to the year still applies.

Legal basis and source

art. 2:10 and 2:362 DCC

• Dutch Civil Code Book 2, article 10
• Dutch Civil Code Book 2, article 362
• Belastingdienst (Dutch Tax Administration): corporate income tax rates

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