SME Accounting Closing: Checklist, Deadlines, Sensitive Entries and Quality Control

The accounting closing is an essential step for all businesses, including SMEs. It allows for an accurate assessment of the financial situation and ensures legal compliance of the accounts. In this article, we offer a detailed guide to successfully complete your annual accounting closing, covering key steps, necessary documents, sensitive entries, and controls to perform.

What is an accounting closing and why is it crucial for SMEs?

Accounting closing refers to all operations carried out at the end of a fiscal year to prepare the company's financial statements. These documents, such as the balance sheet, income statement, and appendices, allow you to:

• Assess the company's financial performance.
• Comply with legal and tax obligations.
• Prepare tax returns, especially for VAT and corporate income tax.
• Provide a clear vision to stakeholders (shareholders, banks, investors).

For SMEs, accounting closing is particularly important as it serves as a strategic management tool. Poorly executed closing can lead to tax errors, penalties, or inappropriate strategic decisions.

Accounting closing schedule: steps and deadlines to follow

Good planning is essential to avoid errors and meet legal deadlines. Here is a typical schedule for a successful accounting closing:

Step 1: Preparation (1 to 2 months before year-end)

• Account verification: Ensure all accounting entries are recorded correctly.
• Bank reconciliations: Check that bank balances match statements.
• Inventory of stocks: Conduct a physical inventory and value stocks according to accounting standards.

Step 2: Technical closing (year-end)

• Recording year-end entries: Provisions, depreciation, accrued expenses and income.
• Account validation: Check that the general ledger is balanced.

Step 3: Finalization (1 to 2 months after year-end)

• Preparation of financial statements: Prepare the balance sheet, income statement, and appendices.
• Quality control: Perform an internal audit to identify and correct any errors.
• Tax declaration: Prepare and submit tax returns within the required deadlines.

Sensitive entries not to overlook: provisions, accruals/prepayments

Certain accounting entries require special attention during closing, as they directly impact the company's results.

Provisions

Provisions anticipate probable but uncertain future expenses. For example:

• Provisions for litigation: In case of ongoing disputes.
• Provisions for impairment: For doubtful receivables or obsolete stocks.
• Provisions for social charges: Related to unused paid leave.

Accruals and deferred income/expenses

These entries allocate expenses and income to the relevant fiscal year:

• Accrued expenses: Invoices not yet received but relating to the current year.
• Accrued income: Income earned but not yet received.
• Prepaid expenses: Payments made in advance for future services.
• Deferred income: Income received in advance for future services.

Essential documents checklist for a successful accounting closing

Here is a checklist of indispensable documents for accounting closing:

• Bank statements: For bank reconciliations.
• Supplier and customer invoices: To verify third-party accounts.
• Ongoing contracts: To identify off-balance sheet commitments.
• Inventory of stocks: To value stocks at closing.
• Depreciation tables: To calculate depreciation allowances.
• Provision justifications: Documents related to disputes, doubtful receivables, etc.
• Tax declarations: VAT, corporate income tax, etc.
• General ledger and trial balance: To verify account balances.

Quality control: internal audit and account adjustments

Rigorous account control is essential to ensure the reliability of financial statements. Here are the key steps:

Step 1: Balance verification

• Compare account balances with supporting documents (bank statements, invoices, etc.).
• Identify discrepancies and correct them.

Step 2: Financial ratio analysis

• Analyze key ratios (liquidity, profitability, debt) to detect possible anomalies.

Step 3: Validation by a certified accountant

• Have your accounts validated by a certified accountant to ensure compliance.

Two summary tables: typical schedule and risk management

Table 1: Typical accounting closing schedule

Table 2: Risk management related to accounting closing

Practical case: SME accounting closing (figures in CHF)

Let's take the example of an SME with the following data:

• Annual turnover: CHF 1,200,000
• Operating expenses: CHF 800,000
• Opening stocks: CHF 150,000
• Closing stocks: CHF 200,000
• Provisions for litigation: CHF 20,000
• Doubtful receivables: CHF 10,000

Steps completed:

1. Calculation of gross result:

• Gross result = Turnover - Operating expenses = 1,200,000 - 800,000 = CHF 400,000

2. Stock adjustment:

• Stock variation = Closing stocks - Opening stocks = 200,000 - 150,000 = +50,000 CHF
• Adjusted result = 400,000 + 50,000 = CHF 450,000

3. Consideration of provisions:

• Final result = 450,000 - (20,000 + 10,000) = CHF 420,000

The net result for this SME for the fiscal year is therefore CHF 420,000.

Steps for a successful accounting closing

1. Plan deadlines: Define a clear schedule for each step.
2. Gather documents: Prepare all necessary supporting documents.
3. Perform reconciliations: Check bank accounts and third-party accounts.
4. Record year-end entries: Provisions, depreciation, accruals and deferred items.
5. Analyze accounts: Identify and correct anomalies.
6. Prepare financial statements: Balance sheet, income statement, and appendices.
7. Conduct an internal audit: Check consistency and compliance of accounts.
8. Submit tax declarations: Meet legal deadlines.

Common errors during accounting closing and how to avoid them

1. Forgetting adjustment entries

• Error: Not recording accruals and deferred items.
• Solution: Use a checklist to verify all necessary entries.

2. Incorrect stock valuation

• Error: Not conducting a physical inventory or using an incorrect valuation method.
• Solution: Follow current accounting standards and document your calculations.

3. Delays in closing

• Error: Not meeting legal deadlines.
• Solution: Establish a clear schedule and follow it rigorously.

4. Neglecting provisions

• Error: Underestimating or forgetting to record important provisions.
• Solution: Consult a certified accountant to properly assess necessary provisions.

5. Lack of quality control

• Error: Not performing checks before finalizing accounts.
• Solution: Integrate an internal audit into your closing process.

6. Non-compliance with accounting standards

• Error: Not complying with legal and tax obligations.
• Solution: Consult official guidelines and train your team.

FAQ: Frequently asked questions about SME accounting closing

1. When should you start preparing for accounting closing?

It is recommended to start preparation one to two months before year-end to avoid delays.

2. What are the main risks of poorly executed closing?

Main risks include errors in financial statements, tax penalties, and inappropriate strategic decisions.

3. What are the legal obligations for SMEs in Switzerland?

SMEs must comply with the provisions of the Swiss law on accounting and provisions (source: Swiss law on accounting and provisions).

4. Is it mandatory to hire a certified accountant?

Although not mandatory for all SMEs, it is highly recommended to hire a certified accountant to ensure compliance.

5. How to manage provisions at year-end?

Provisions must be carefully assessed considering probable risks and legal obligations (source: Directive on annual account closing).

6. What tools can facilitate accounting closing?

Specialized accounting software and inventory management tools can greatly simplify the process.

Conclusion

Accounting closing is an essential step to ensure the financial health and legal compliance of your SME. By following a rigorous schedule, paying attention to sensitive entries, and conducting quality controls, you can avoid costly errors and optimize your business management. Don't hesitate to consult a certified accountant to support you in this crucial process.

References

• Business Accounting – Wikipedia
• Accounting Methods Related to VAT in Switzerland — Guide 2025
• Directive on Annual Account Closing
• Inventory Entries in Accounting
• Swiss Law on Accounting and Provisions
• Accounting Obligations for a Sole Proprietorship in Switzerland
• SME Governance Practices in French-speaking Switzerland
• Guide for SMEs on Accounting and Administrative Compliance
• The General Chart of Accounts: An Essential Booklet