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5.5 Luxembourg Monthly/Quarterly Closing Procedures

Monthly Closing Procedures​

Many Luxembourg SMEs close their books monthly to:

  • Monitor performance regularly
  • Identify issues early
  • Prepare for VAT returns
  • Manage cash flow
  • Comply with management reporting

Monthly Closing Checklist​

Before Closing:

  • Record all transactions for the month
  • Reconcile bank accounts
  • Verify all invoices are recorded
  • Check accounts receivable aging
  • Review accounts payable

During Closing:

  • Make all adjusting entries
  • Prepare adjusted trial balance
  • Prepare monthly financial statements
  • Review for errors or unusual items
  • Calculate key ratios (current ratio, working capital)

After Closing:

  • Prepare closing entries
  • Prepare post-closing trial balance
  • Archive monthly reports
  • Prepare for next month

Quarterly Closing Procedures​

Quarterly closings are important for:

  • VAT return preparation (if quarterly filer)
  • Management review
  • Budget comparisons
  • Tax planning

Quarterly Closing Checklist​

Additional Steps for Quarterly:

  • Review quarterly performance vs. budget
  • Prepare VAT return (if quarterly)
  • Review and adjust provisions
  • Calculate quarterly taxes (if applicable)
  • Prepare management reports
  • Review with accountant/fiduciaire

Luxembourg-Specific Monthly/Quarterly Requirements​

VAT Considerations​

Monthly Filers:

  • Must close books before filing VAT return
  • Ensure VAT is recorded in correct period
  • Reconcile VAT Payable and VAT Recoverable
  • File by 15th of following month

Quarterly Filers:

  • Must close books before filing VAT return
  • Ensure VAT is recorded in correct quarter
  • File by 15th of month following quarter end

Social Charges​

Monthly:

  • Accrue employer and employee social charges
  • Ensure proper period allocation
  • Prepare for payment deadlines

Bank Reconciliation​

Monthly:

  • Reconcile all bank accounts
  • Identify and record bank fees
  • Verify all transactions are recorded
  • Resolve discrepancies

Best Practices​

  1. Consistent Schedule: Close on same day each month
  2. Documentation: Keep closing checklists and notes
  3. Review: Always review for errors before closing
  4. Backup: Backup data before and after closing
  5. Communication: Inform team of closing schedule

Luxembourg Compliance Note​

While monthly/quarterly closing is not legally required (annual is mandatory), it is:

  • Best practice for business management
  • Required for VAT filing (monthly/quarterly)
  • Helpful for tax planning
  • Important for cash flow management
  • Recommended by fiduciaires and accountants