Preparing the annual report

Once the books are tidy, open Reports → Annual Reports, find the year, and click Prepare Annual Report. Arvello reads your ledger and drafts the whole report: balance sheet, income statement, notes and a draft management report, with prior-year figures alongside for comparison. The balance sheet and income statement go into the XBRL file you upload to the Business Register. The notes and management report don't: the register's XBRL format has no place for a management report, and a micro company's notes there are fixed forms with a few fields rather than free text. You enter both at the portal, from text Arvello hands you ready to copy.

First, Arvello checks that the year's adjusting entries are in the books: every month of depreciation, the revaluation of invoices in other currencies that were still open on the last day of the year, if anyone was employed at the year end, an answer about unused annual leave, the accrued and prepaid share of purchases whose service period crosses the year end, the current part of any finance lease, an answer about government grants still held, and your review of the assets for damage or obsolescence. If any is missing, Prepare Annual Report opens the report page with a Year-end checks card instead of figures. Each check has a one-step fix there; once they're all done, prepare again. Recalculate from Books runs the same checks. A prepared report is a snapshot of the books. Anything posted into its year before it's filed (a year-end fix, a late invoice, a December payroll run approved in January) sends it back to draft, so its old figures can't be downloaded, and you prepare it again. The XBRL download also waits while a year-end check is open again, for example after you add an employee and the holiday pay question comes back. The year-end checklist explains each one.

On the balance sheet, an overdrawn bank account is shown as a short-term loan, not as negative cash: the accounting standard (RTJ 2) treats an overdraft as a loan and doesn't let it reduce your other bank balances unless the bank has a legal right to set them off.

What you get isn't a blank form; it's a finished draft waiting for review.

Micro or small — and why it matters

Estonian law sizes the report to the company, and Arvello classifies yours automatically from the figures. A company stays a micro enterprise unless it exceeds at least two of three thresholds — €450,000 in total assets, €900,000 in revenue, or 10 employees — at which point it becomes a small enterprise. One borderline year doesn't flip the category: the criteria have to point the same way at two consecutive year ends.

Above that sits a ceiling Arvello can't file past: a company that exceeds two of €7,500,000 in total assets, €15,000,000 in revenue or 50 employees is medium-sized, and medium-sized companies file a full annual report rather than an abbreviated one. The same two-year rule applies, so a small company's first year over the ceiling still files as small. A new company's first report has no earlier year to compare with, so its own figures decide. When the rule makes the company medium-sized, the report page says so and the XBRL download is blocked, because the file Arvello produces wouldn't be the report the law asks for. For years starting before 2024 the older limits apply (a €4,000,000 / €8,000,000 / 50 ceiling).

The category decides which forms the register expects. A micro enterprise files a short set of notes (Arvello drafts six) and usually doesn't need a management report. A small enterprise files fuller notes (Arvello drafts twelve; the law sets a minimum, not a limit) plus a management report. Both file the detailed balance sheet: since the Accounting Act changed on 17 January 2025, a micro enterprise can no longer file a condensed one with only the totals. For a year that started before 2024, Arvello still files the condensed micro balance sheet, which the register accepts for those years. The category appears as a badge on the report page.

What's filled in automatically

• Balance sheet and income statement — calculated from your trial balance and mapped onto the register's reporting lines, prior-period comparatives included. The comparatives are your previous financial year as stored, so after a first year of up to 18 months or a transition year they cover that whole year, not just the 12 months before.
• Your company's first year — there's no previous year, so the balance sheet's comparative column is your opening balance sheet (the algbilanss): what the company held on the day it was founded, usually just the share capital, and the unpaid part of it if it was founded without paying in. The income statement has no comparatives that year. This is what the Accounting Act asks of the first report after founding (§ 26(2)), and the XBRL file carries the opening balance sheet dated on the first day of the year.
• Notes — drafted for you: accounting policies, off-balance-sheet liabilities, secured liabilities, loans to management, treasury shares, and employee count, with six more for small enterprises (fixed asset movements, related-party transactions, and so on).
• Management report — the tegevusaruanne, a short narrative about the year, drafted in Estonian and English from your company's data: main activity, revenue and how it moved against last year, the year's profit or loss, and headcount. Small enterprises must file one. A micro enterprise doesn't have to, unless its net assets have fallen below the Commercial Code § 176 limit (half of the share capital; for a balance date before February 2023, also €2,500). The law then puts its plan to restore equity in the notes, and the register's portal also asks for a management report, so the plan goes in both. The Management Report tab says which applies to your company.

Notes drafted from your books

Several notes are filled in from your ledger and registers rather than from fixed wording. They're still drafts for you to check, and anything Arvello can't know is marked [to be completed] (in the Estonian text, [täpsustada]).

• Loans to management — drafted from the director's loan account: its balance at the start and end of the year, what was lent or advanced (a Director withdrawal in banking) and what was repaid. A loan made in March and repaid in September still shows, even though the balance is zero at both ends. Only when nothing moved all year does the note say no loans were granted.
• Board remuneration (small companies) — the board member fees booked during the year, and which income statement line holds them: Tööjõukulud (employee expense) under scheme 1, Üldhalduskulud (administrative expense) under scheme 2. A board member's salary under an employment contract isn't split out by the books, so the note asks you to add it if there is one.
• Related parties (small companies) — the sales, purchases and year-end balances with every contact you've marked as a related party (see Clients and suppliers), grouped the way the register's form groups them, plus board fees and the director's loan. Volumes are net of VAT, with credit notes deducted. Loans received from a related party, such as a shareholder's loan, aren't linked to a contact, so the note asks you to add them.
• Fixed asset movements (small companies) — the schedule from your fixed asset register: cost, accumulated depreciation and carrying amount at the start and end of the year, purchases, disposals and the depreciation charge, by group (vehicles, computers and so on). The ledger is the control total. If the fixed asset accounts hold more than the register explains (opening balances from before Arvello, typically), the note shows the difference and asks you to add the missing assets or correct the balances before filing.
• Treasury shares and investment property — drafted from their accounts: the balance at each end of the year and what was bought or sold. The fixed "no treasury shares" text appears only when there were none and nothing moved. The investment-property note (small companies) gives the account's total increases and decreases, because a fair-value gain or depreciation posts to the same account as a purchase or sale. It asks you to split them into acquisitions, improvements, sales, depreciation and fair-value changes, and to add the measurement method and rental income. Intangible assets imported from a filed report get their balances in the fixed asset note, with a request for the movement, since the asset register holds tangible assets only.
• Employees — the average number of employees in full-time equivalents, which is what the register's form asks for: two half-time employees all year count as one. It uses each person's working time from Pay Yourself → People as it stands when you prepare the report, for the whole year, so if someone's hours changed during the year, adjust the figure in the note. A small company's note also counts employees and board members separately, by type of work. Only board members paid a board fee count there: an unpaid board member isn't registered in the employment register. Whether to include board members without an employment contract in the full-time figure isn't settled in the register's guidance, so check that line against your situation.

The director's loan terms

When the director's loan account has a balance or moved during the year, the Notes tab shows a Director's loan terms card. Enter the final due date and the interest rate for the loans note, and the part of the year-end balance that falls due more than 12 months after the year end. That part files as a non-current receivable and the rest as current, because the split goes by what is left to repay at the reporting date, not by the loan's original term: a two-year loan with six months left is current. A loan repayable on demand is all current, so leave the long-term part at 0. Save, then click Recalculate from Books for the balance sheet and the note to pick it up.

If the account has a credit balance, the company owes the director money. The balance sheet then shows it under other payables, not as a negative receivable.

What you review and edit

The report page has a tab for each part: Balance Sheet, Income Statement, Notes, Management Report, Profit Distribution, and Validation. Click any note, or the management report text, to edit it. Your edits are kept even if you later click Recalculate from Books — recalculating refreshes the figures without overwriting what you wrote. What you write here is the text you'll paste at the portal, so it's worth getting right before you file. It's in Estonian, because the annual report has to be.

The Profit Distribution tab records what happens to the year's result: how much goes to dividends, to reserves, or stays retained. Arvello shows the total available for distribution, checks your allocations against the Commercial Code's net-asset rules, and estimates the corporate income tax a dividend would carry. If an earlier year's filed report already committed part of that profit — a dividend resolved but not yet declared, or an allocation to reserves — that committed amount is shown coming off the pool, and the proposal has to fit what remains: the same figure the dividend availability card on the Pay Yourself page holds back. These amounts get typed into the register's portal during submission, so settling them now saves a round trip later.

Validation

A report still in draft or in review can be deleted with Delete report: its notes, figures and profit distribution go with it, your bookkeeping is untouched, and you can prepare it again. A generated report is reopened first; a submitted or locked report stays, as the record of a filing, and so does a filed report you've reopened for a correction.

The Validation tab shows the structural checks at a glance: the balance sheet balances (assets equal liabilities plus equity), the income statement's net profit agrees with the balance sheet, and the required figures are present. A fuller validation pass runs when you download the XBRL file — covering things like the reporting period's validity and whether prior-year figures line up with the previous report. Errors block the download until fixed; warnings (net assets below the Commercial Code minimum, for instance) are shown for attention but don't stop you.

The Validation tab also checks the report's own figures against the Auditors Activities Act. A review by a sworn auditor is compulsory when two of these are exceeded: €2,000,000 of revenue, €1,000,000 of total assets, 24 employees on average, or when any one of €6,000,000, €3,000,000 or 72 is. An audit is compulsory at two of €5,000,000, €2,500,000 and 50, or any one of €15,000,000, €7,500,000 and 180. These limits apply to years starting from 2024; earlier years use the lower limits in force then, and the tab says which set it used. Either one is a warning rather than a block: the file is still yours to upload, but the auditor's report goes to the register with it.

One habit worth forming: fixes happen in the books, not in the report. The report is a projection of your ledger, so when a number is wrong, correct the underlying record — the reconciliation, the invoice, the journal entry — and click Recalculate from Books. Editing the output would only paper over a problem still sitting in your accounts.

Common questions

A year imported from the register shows the wrong category

For years imported from the Business Register, the register doesn't say which category the report was filed under, so Arvello works it out from the filed figures, using the rules of that year. It can't see the employee count, though, and before 2024 a micro company also had to have a single shareholder who was its board member. Check the category on the Annual Reports page against the filed report and change it there if it's wrong: the next report keeps the filed category until the figures point elsewhere at two year ends running.

The figures look wrong

The usual suspect is reconciliation: unmatched bank transactions leave the ledger, and therefore the report, adrift from reality. The next is opening balances — if your history was imported or entered at onboarding, check the starting figures (see Import your financial history). Fix, recalculate, compare again.

Validation keeps failing

A balance sheet that won't balance almost always points to incomplete bookkeeping rather than a report problem — typically unreconciled transactions or opening balances that never balanced in the first place. Read the specific message, fix the underlying data, and recalculate. And mind the difference between the two severities: warnings are advisories, while errors must be cleared before the XBRL file will download.