What Gets Left for January — and Shouldn't Be
The year-end accounting close is not a one-off event. It's a process that requires preparation well in advance. Decisions made in November and December often have just as much impact as those made in January. Some operations — tax decisions, provisions, expense accruals — simply cannot be made once the financial year is closed.
This article covers the ten points to review before 31 December 2026, with the specific features of this financial year. It is aimed at business owners, CFOs and accounting directors whose financial year aligns with the calendar year.
This article applies exclusively to companies operating under French law.
1. Customer Invoices: Chase and Provide For
Before closing, identify overdue receivables and send a final reminder. For receivables where collection is uncertain — a customer in financial difficulty, an open dispute, a long-standing unpaid invoice — a provision for impairment must be recognised. This reduces the year's result and brings you into line with the prudence principle.
Don't let doubtful receivables turn into outright losses in 2027 when they were already identifiable in December 2026.
2. Supplier Invoices: Don't Leave Anything Off the Balance Sheet
Verify that all supplier invoices received before 31 December have been submitted and recorded. Also consider services consumed in 2026 for which no invoice has yet arrived: these must be recognised as accrued expenses (account 408 — Suppliers, invoices not yet received).
A specific 2026 point: if your company switched to an e-invoicing platform since September, check that all incoming flows are fully captured in your accounting system. The transition may have created processing gaps.
3. Cut-Off: Matching Charges and Income to the Right Period
Cut-off is one of the most common sources of error at year-end. The principle is straightforward: each expense and each item of income must be allocated to the financial year to which it economically relates, regardless of the invoice date.
In practice: an invoice received in January 2027 for a service rendered in December 2026 must be recorded as a 2026 expense. Conversely, rent or an insurance premium paid in December 2026 and partly covering 2027 must be recognised as a prepaid expense (account 486).
4. Fixed Assets and Depreciation
Review all acquisitions made during 2026: IT equipment, vehicles, furniture, fittings. Verify that each has been correctly capitalised rather than expensed immediately, and that depreciation schedules have been activated from the correct date.
The threshold for immediate expensing of small tools and equipment remains at €500 excluding VAT. Above this amount, capitalisation is mandatory.
5. Inventory: A Legal Requirement
If your business holds stock, its valuation at 31 December is a legal obligation. A physical inventory count must be carried out at the closing date — or close to it, with a reconciliation. Obsolete stock, slow-moving items or stock whose realisable value is below cost must be written down.
A poorly constituted provision for stock impairment is one of the most frequently corrected items in an audit or tax inspection.
6. Provisions: Disputes, Leave, Warranties
Provisions must reflect the probable risks and liabilities at the closing date. In particular, review:
- Ongoing disputes: a supplier or customer dispute, employment tribunal proceedings, an open tax reassessment — all these risks must be provided for if their probable outcome represents an outflow of resources.
- Accrued holiday entitlement: unused leave at 31 December represents a social liability that must be provided for.
- Contractual warranties: companies that offer contractual guarantees on their sales are generally expected to maintain a statistical provision.
7. Cash: Reconciliation and Forward Planning
Complete a bank reconciliation for all accounts at the closing date. Every accounting balance must be supported by the corresponding bank statement. Unexplained differences are an immediate red flag for your auditors or accountant.
Use this opportunity to model your cash flow forecast for the first six months of 2027. The year-end close is the ideal moment to anticipate any pressure points — and to check whether your existing credit facilities are sized correctly.
8. Shareholder Current Accounts
For companies, shareholder current accounts require particular attention at year-end.
A debit balance — where a shareholder owes money to their company — is in principle prohibited in SAs and SARLs. In SASs the position is more nuanced but remains sensitive. The position must be rectified before 31 December.
Where current accounts are interest-bearing, check that the rate applied respects the applicable tax cap (the average rate on advances from credit institutions). Interest paid above the cap is not tax-deductible.
9. VAT: Reconciliation and Control Points
Reconcile the turnover recognised in the accounts against the VAT returns filed for the year. Any difference must be explained and documented — exempt transactions, reverse charge, intra-community supplies.
Also review your input tax recovery: VAT on mixed-use expenditure (partly attributable to out-of-scope activities) can only be recovered in proportion to the applicable deduction ratio. Errors on this point are easily spotted during a tax audit.
10. The Tax Specifics of the 2026 Financial Year
For SMEs and mid-sized companies: the corporate income tax rate remains at 25% (standard rate) and 15% on the first €42,500 of profit for eligible SMEs. No change applies to these structures. That said, now is the time to review year-end tax planning: deferring charges, accelerating deductible expenditure, contributions to employee savings or retirement plans, dividend distribution or additional remuneration — each decision has an immediate tax impact.
For large groups: the exceptional contribution on corporate profits (CEBGE) has been renewed by the Finance Act for 2026. The threshold has been raised to €1.5 billion in turnover (from €1 billion in 2025), which now excludes mid-sized companies from the scheme. Rates remain unchanged: 20.6% between €1.5 billion and €3 billion in turnover, 41.2% above that level. A key operational point: an advance payment representing 98% of the estimated contribution is due on 15 December 2026, at the same time as the final corporate tax instalment. Finance teams concerned must have modelled their estimated tax result well before that date.
How Trevys Supports You at Year-End
A well-prepared close is far more than a legal obligation. It's an opportunity to produce a true and fair view of your business, to identify any remaining tax planning opportunities, and to enter 2027 with solid accounts.
At Trevys, our teams support each client with a dedicated point of contact, from the review of year-end inventory work through to sign-off on the tax return. If you would like to discuss your 2026 year-end close, let's arrange a meeting now.