Closing the 2024 accounting year: what do you need to know?

The end of the year is approaching, and with it the need to prepare the financial statements for 2024. Closing the accounting year correctly is not only a legal obligation – it also gives an accurate picture of your company’s financial situation.

Key areas not to forget

Invoices that are tax-deductible only once paid

Under Section 17(19) of the Income Tax Act, some expenses are tax-deductible only once they have been paid. These include, for example:

• Rent,
• Marketing studies and market research,
• Brokerage commissions,
• Advisory and legal services,
• Contractual penalties, late-payment interest or compensation for withdrawal from a contract (odstupné),
• Expenses for advertising provided to non-profit organisations.

Motor vehicle tax

If you used a motor vehicle for your business during the year, you are required to file a tax return and pay this tax by 31 January 2025 at the latest. The expenses associated with this tax belong to the period in which the vehicle was used, regardless of whether it is recorded among the company’s assets.

The difference between the year-end close and the financial statements

• Year-end close: The process of closing the accounts in the general ledger at the end of the accounting period, including the inventory-taking of assets, receivables and payables.
• Financial statements: The result of the close – the balance sheet, the profit and loss statement and the notes. These statements are filed with the Register of Financial Statements (register účtovných závierok).

The year-end close procedure for 2024

1. Processing accounting documents

Post all documents, for example:

• Issued and received invoices,
• Credit notes, cash receipts,
• December wages (paid in January 2025),
• Motor vehicle tax.

Make sure that all income and expenses are correctly allocated to 2024.

2. Checking the accounting balances

Check:

• That the account balances are correct,
• That transactions match the source documents.

3. Inventory-taking of assets and liabilities

Carry out:

• A check of inventory, including valuation allowances,
• Reconciliation of receivables and payables with your business partners,
• Reclassification of long-term liabilities as short-term.

4. Creating provisions

Provisions make it possible to optimise your tax liability. You can create:

• A provision for untaken annual leave,
• A provision for valuation allowances on receivables,
• A provision for the impairment of inventory.

5. Preparing the financial statements

Prepare:

• The balance sheet,
• The profit and loss statement,
• The notes to the financial statements.

Do not forget to file these documents with the Register of Financial Statements within the statutory deadline.

Compliance with legislation

The financial statements for 2024 must be prepared in accordance with the laws in force. If you are not sure whether your procedures are correct, do not hesitate to contact us – we will be glad to help you with professional processing and advice.

A thorough year-end close will ensure smooth planning for the next period and improve the transparency of your company’s finances. Set aside time to check all your documents and minimise the risk of errors.