Close a financial year

Year-end closing is an ordered sequence of accounting operations. Simon guides the agent (and the user) through each step via the workflow system, which checks dependencies and prevents skipping steps.

What you validate

You validate the decisions that cannot be derived mechanically:

• cut-off review;
• applicable provisions;
• allocation of earnings;
• handling of reversals;
• generation of opening balances.

Closing blocks are visible decisions: they must be handled or deferred with justification.

The closing sequence

flowchart TD
    A[Phase 1<br/>ICNE, depreciation, cut-off] --> B[Phase 2<br/>Corporate-tax provision, TNS provision]
    B --> C[Phase 3<br/>Closing accounts 6/7]
    C --> D[Phase 4<br/>Reversals, allocation, final CCA]
    D --> E[Phase 5<br/>Opening balances Y+1]

Each visible step is a soft block in the workflow of the FINANCIAL YEAR period. Some checks within the same phase are independent: for example, ICNE and depreciation may appear together. The following phases only become available once the prerequisites of the current phase are handled or deferred.

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Step by step

Phase 1. Depreciation, ICNE and cut-off review

These checks may appear in parallel. ICNE and depreciation block the provisions of the next phase as long as they are not handled or deferred.

Depreciation

Posts the lines of the depreciation schedule not yet recorded. For each fixed asset, Simon creates a monthly entry:

• Debit: 681x (depreciation expense — tangible or intangible)
• Credit: 28xx (accumulated depreciation)

Block: as long as lines of the depreciation schedule are not posted.

Accrued interest not yet due — ICNE

Provisions the accrued interest on active loans at the closing date. The calculation is pro rata temporis: annual interest × days elapsed / total days.

• Debit: 6611 (interest on loans)
• Credit: 1688 (accrued interest not yet due)
• The journal entry is flagged for automatic reversal in Y+1.

Block: if active loans exist without an accrued interest provision.

Cut-off (CCA, PCA, FNP, FAE, provisions)

Year-end adjustments. The agent manually creates the necessary journal entries:

Type	Description	Debit	Credit
CCA	Prepaid expense (rent paid in advance, etc.)	486	6xx
PCA	Deferred income (subscription invoiced in advance, etc.)	7xx	487
FNP	Invoice not yet received (expense received, invoice missing)	6xx	4081
FAE	Invoice to be issued (service delivered, invoice not yet issued)	4181	7xx
Provisions	Probable risks and charges	68x	15xx

Astuce

Simon automatically detects cut-off suspects:

• CCA: abnormally high recurring Q4 expenses (likely annual invoicing)
• FNP: regular suppliers (≥ 3 invoices) with no invoice in the last month

Block: the agent must confirm that they have reviewed the adjustments.

Phase 2. Corporate-tax provision and TNS provision

These provisions appear when the ICNE and depreciation prerequisites are resolved or deferred.

Corporate-tax provision

Calculates the corporate tax and creates the provision journal entry from the versioned tax schedule of the financial year.

• Taxable profit = income (class 7) − expenses (class 6, excluding 695)
• SME schedule and standard rate: Simon tax reference data of the installed version
• Deducts the instalments paid (account 444)
• Debit: 695 (corporate tax) / Credit: 444 (State, corporate tax)

Attention

Block only if the company is subject to corporate tax.

TNS provision

Provisions the social security contributions of the self-employed (TNS) director, broken down by nature:

Nature	Account
Health, pension, disability, family allowances	646
CSG / CRDS	6378
Professional training	6333

Counterpart: 437 (social security bodies).

Block: if director’s remuneration (641/644) exists.

Phase 3. Closing accounts 6/7

Clears all expense (6) and income (7) accounts to the income statement.

• Each 6xx/7xx account is cleared to zero
• Counterpart: 120 (profit) or 129 (loss)

Attention

This action refuses to run if the closing prerequisites have not been handled or deferred: depreciation, ICNE where applicable, corporate-tax provision where applicable, TNS provision where applicable.

Block: as long as the 6/7 closing entries are not generated.

Phase 4. Reversals, allocation of earnings and final CCA

These actions become visible after the closing of accounts 6/7.

Allocation of earnings Y-1

Allocates the result of the previous financial year. If dividends are to be distributed, Simon takes them into account in the calculation.

• Profit (120):
  • legal reserve (1061), according to the applicable rules and the share capital
  • Dividends → 457 (partners, dividends payable)
  • Balance → 110 (retained earnings, credit)
• Loss (129) → 119 (retained earnings, debit)

Block: if account 120/129 has an unallocated Y-1 balance.

Reversals

Automatically generates the reverse entries of the adjustment journal entries (CCA, PCA, FNP, FAE, ICNE, provisions). Each reversal is dated the first day of financial year Y+1 and linked to the original journal entry.

Block: as long as the journal entries flagged for reversal have not been reversed.

Phase 5. Opening balances

Generates the opening entry of financial year Y+1 from the balances of the balance sheet accounts (classes 1 to 5).

• Carries over all balance sheet accounts with their closing balance
• Includes the result (120/129) calculated from classes 6/7
• Journal entry type: opening balances

Attention

This action refuses to run if the reversals are not generated or if the closing entries are missing.

Block: as long as the Y+1 opening balances are not generated.

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Automatic reprocessing

After each closing action, the workflow:

1. Posts the generated journal entry (accounting entry)
2. Re-evaluates all blocks of the period
3. Updates the checklist

Note

The agent sees the next block resolve automatically and moves on to the next step.