Accounting and Tax Closing in Spain

The closing of the fiscal year as far as a company or individual is concerned refers to the adjustment of the accounts and the presentation of the results in order to proceed to the payment of the corresponding taxes.

The first is the calculation at the end of the accounting year, which lasts one year and coincides with the calendar year, from January 1 to December 31. On the other hand, the fiscal closing is carried out once the accounting closing is finished, and with the annual accounts already settled, the tax filing will be made.

What are the implications of the year-end closing?

The accounting closing is done from January 1 to March 31. During this period, all the accounts are prepared in order to close the accounts and proceed to their presentation.

Performing this closing as soon as possible will bring several advantages, for example, it will facilitate decision making with financial implications. By knowing the current situation of the company earlier, decisions such as the distribution of dividends or the allocation of reserves can be made earlier and more accurately.

In addition, knowing the result of the accounting close as soon as possible also makes it possible to guide decision making towards tax reductions. Knowing the amounts of VAT (value added tax) and personal income tax, it will be possible to make certain investments that reduce these percentages.

How to perform the year-end closing in Odoo?

Knowing the advantages of being able to close the accounts as soon as possible, it is clear the need for an accounting system that can speed up these processes. In Odoo, thanks to its integrations and the intuitive nature of the system, the closing can be done in a matter of seconds.

To begin with, thanks to the digitalization of the invoices, the system will already have all the necessary information about the invoicing during the fiscal year. Moreover, thanks to Odoo's amortization and depreciation system, this will not be a concern either, as the journal entries will be posted fully automatically.

The first advantage of using Odoo when it comes to closings is that it is not necessary to perform a closing as such in the system to be able to see the company's situation at any point in time, whether it is the current year or past fiscal years.

However, you will be able to perform the accounting closing in a very simple way:

1. When the end of the fiscal year arrives you access the profit and loss report, from accounting → reports → profit and loss. The time filter will be activated in “This fiscal year”. Once here, we click on the figure and this will take us directly to the accounting entries.

2. From the accounting entries we proceed to select all of them, then we perform the “Move to account” action. This action allows us to create an accounting entry automatically for the closing of the fiscal year. What happens automatically is a reversal of the balances from debit to credit and vice versa.

3. Once here and to finalize the closing, we complete the date, which will be January 1st of the year following the fiscal year we are closing, we select the journal “Miscellaneous operations” and we mark that this entry will go to the account 129000 - Profit / loss for the period.

4. We will already have the entry created and with the correct balance, in case we want to make changes we will always be able to restore to draft. To check that it has worked correctly, when we return to the Profit and Loss Statement we will see that it has been set to 0 for the beginning of the new fiscal year.

In this way, we can close our accounting and fiscal year in a matter of seconds, thanks also to the connection with the Immediate Supply of Information (SII). Once the accounting year is closed, no further action is needed to start the new year.

Now, in order to review already closed fiscal years we must follow the following steps:

1. We access the accounting entries and select the entry that has been created for the closing and rename the reference to simplify the process.

2. Create a filter with the reference of the closing (e.g. Closing 2023) and save it as favorites.

3. With the developer mode activated, we activate the favorite filters function and now we will be able to return to the Profit and Loss statement and activate our filter to see previous fiscal years at any time.

If you are working in a version prior to v17, you will have the option of creating a journal for each year closing.


Asset management and depreciation