Closing out the fiscal year as a freelancer in France

As a freelancer, you know that you’re beholden to several financial and administrative obligations.

One of these requirements is closing out your company’s fiscal year.

This accounting formality is mandatory for the large majority of businesses. No ifs, ands or buts about it. At the end of each calendar year, you have to send a summary of the year’s accounting to the relevant tax authorities.

But between balance sheets, profit and loss reports and annexes, it’s hard to see where you stand. That’s to be expected. It’s a complex and demanding task, considering accounting isn’t usually part of your wheelhouse.

This article outlines all the necessary details you need to consider when you’re putting together your year-end closure of accounts.

This will be the year you make closing out your fiscal year a breeze.

A year-end close, or “closing the books”, consists of submitting your annual accounting to the tax authorities at the end of each financial year.

In practice, this annual accounting is made up of three very specific accounting documents:

• a profit and loss statement;
• a balance sheet;
• an annex.

These documents serve to provide a clear and accurate portrayal of your company’s financial situation.

But it doesn’t end there. Preparing these documents can also allow you to reframe your financial goals and grasp how your sales revenue is evolving.

Closing out your fiscal year involves two primary steps.

• First, you want to finish registering your accounting entries for the past financial year.
• Then, you need to gather all the supporting documentation you’ll need to put your annual accounting together.

But it doesn’t end there. Preparing these documents can also allow you to reframe your financial goals and grasp how your sales revenue is evolving.

Closing out your fiscal year involves two primary steps.

• First, you want to finish registering your accounting entries for the past financial year.
• Then, you need to gather all the supporting documentation you’ll need to put your annual accounting together.

As a freelancer you must abide by the usual accounting requirements, but this varies from one legal status to another.

Good news: if you chose the micro-enterprise regime (formerly auto-enterprise), you have the benefit of having super simplified accounting obligations. That means you are not required to close out your fiscal year.

If you’re neither a micro-entrepreneur nor concerned by the controlled declaration regime, you need to close out your fiscal year just as any other company would.

As tempting as it may be to delay getting started on your year-end accounting, it would be a mistake to leave it to the last moment.

It’s not a strong strategy. You’re more likely to make mistakes and forget key documentation. Not to mention that you’re also likely to spend far more time on it than is needed.

The key to a seamless, successful year-end close is preparation and anticipation of what’s to come.

It’s crucial to be well-organized and to handle your accounting as things come along so the work doesn’t become overwhelming.

Have you hired an accountant to handle your accounting? (If this doesn’t apply to you, we strongly encourage you to do so). Get in the habit of sending them receipts and documentation once a month, namely:

• receipts for purchases;
• sales receipts;
• bank statements.

Noticed you might be missing some documents and/or receipts? Don’t wait for your paperwork to get backed up - track them down as soon as you can. Better to take a moment once a month to get your paperwork in order and save yourself the brain power for when you actually close out the books.

To help you navigate closing out the fiscal year with ease, Qonto offers two features that can simplify the process:

• Accountant access: this way your accountant has access to your Qonto account dashboard and can directly export all your business’ transactions and receipts for processing.
• Digitizing receipts: simply take a picture of your receipt, or forward it to a dedicated Qonto email address and have a certified “paper trail” online. And you can assign receipts to transactions in a click.

As a general rule, your year-end accounting needs to be done by the 31 December.

That said, self-employed workers with BIC (industrial and commercial) profits can choose an alternative date for finishing their year-end close. This is the case for merchants and independent contractors.

Those with BNC (non-commercial) profits - like freelancers - must respect the deadline of 31 December, no matter the date they launched their business.

For example, if you’re a freelancer and you created a company (SASU ou EURL) in July, you still have to close out your fiscal year by the end of the calendar year, even if your business hasn’t been operational for 12 months.

Once you finish closing out the year, you have 7 months to settle, approve and submit your annual accounting to the tax authorities.

In theory, no. It’s not mandatory.

With that being said, as you well know, closing out the fiscal year and performing the necessary accounting that goes with it is a consuming, complex task. It demands a certain level of discipline as well as some technical accounting knowledge to do it well. And, being self-employed, you don’t have a CFO to share the demands of this accounting exercise.

This is why it is generally recommended to hire a professional accountant to outsource this kind of work, if only to avoid entry mistakes and accidental omissions.

If despite everything you still want to manage your year-end close yourself, we strongly recommend that you use one of the templates that you can find on the Finances Publiques website.

Are you a freelancer looking to open a professional account for your business? Discover Qonto, the business account that simplifies your everyday finances.