With the end of 2026 drawing ever closer, thousands of self-employed workers are facing the final weeks of the financial year without having yet reviewed how they will close their accounts. A situation that can have economic consequences, especially when there are unrecorded expenses, pending investments or tax decisions that could have been made before the end of December.
Bringing forward or postponing a purchase of goods or making an investment can influence the result of the financial year and, in certain circumstances, the taxes the business will have to pay. But what should a self-employed worker review before 31 December?
1. Expenses that have been left out of the accounts: One of the first steps is to check that all income and expenses for the year have been correctly recorded. It is recommended to cross-check the invoices and receipts provided to the accounting firm against the movements in the bank account used for the business activity. "In many cases we find expenses for insurance, community fees, bank charges or travel that appear in the current account, but for which the self-employed worker has not sent the corresponding invoice or receipt," he explains. This review makes it possible to detect possible oversights and to check that all expenses that may be tax deductible have been taken into account.
2. Depreciation and business inventory: computers, furniture, vehicles, machinery or software are some of the assets whose depreciation should be reviewed when closing the financial year. "These are expenses that are sometimes overlooked and not used to reduce profits for tax purposes," says Orta. He also considers it important to carry out an inventory of stock when the activity requires goods or products to generate income. Stock variation affects both the accounting and the tax result: an increase can raise profit, while a decrease can translate into a higher expense.
3. Unpaid invoices and possible deductions. The year-end close is also a good time to review invoices pending collection. When the established requirements are met, certain defaults can lead to the accounting and tax recognition of losses from the impairment of trade receivables, which can reduce the taxable result. In addition, he recommends checking whether there are negative results from previous years that can be offset, and reviewing the deductions or tax benefits that apply. Among the matters he mentions are contributions to pension plans, certain health insurance policies, donations and possible regional tax incentives, always taking into account each taxpayer's circumstances and requirements.
4. Investments that can still be planned: November and December are particularly relevant months for deciding whether it is advisable to make certain investments before the end of the financial year or to postpone them until the next one. "We can make decisions about whether to invest or make purchases that will generate income for us in the future, or postpone them until the next financial year," explains the adviser. However, Orta reminds us that these decisions should not be made solely with the aim of paying less tax. In certain circumstances, presenting positive results can also be worthwhile in order to apply for bank financing, face a possible transfer of the business or improve the company's economic image with clients and third parties.
5. Mistakes that can end up costing money. One of the most common mistakes among the self-employed is mixing personal expenses with business expenses. There are also other frequent errors, such as not reviewing bank movements, forgetting expenses due to lack of documentation, applying depreciation incorrectly or failing to properly account for stock variation. These situations can cause significant differences in tax returns. The year-end close is also an opportunity to prepare a more profitable business for 2027.
Beyond taxes, the end of the financial year should be used to carry out a complete health check of the business. This involves reviewing whether economic objectives have been met, analysing the profitability of products or services, and examining staffing costs, collaborations and client contracts. It is even recommended to examine which days and times are most profitable.
Another fundamental aspect is cash flow: knowing how much money is pending collection, what payments will have to be faced over the coming months and whether there are risks to the continuity of the activity. Based on that information, the self-employed worker can decide whether they need to review their prices, change payment terms or rethink certain products and services. Orta also recommends checking whether the estimate of income reported to Social Security matches the reality of the business, since differences can lead to subsequent adjustments of contributions. Finally, he raises two further issues worth analysing with perspective: whether the evolution of the business justifies a change of corporate structure, and whether current contributions are adequate for future retirement. Regarding the possibility of setting up a company or a holding structure, the adviser warns that it is not always advisable and that any decision must respond to the actual circumstances of the activity.