Financial closing 2024, a look from the accounting and tax perspective

What planning and strategy should be implemented prior to the 2024 annual accounting closing?

Annual accounting closings are an essential part of planning and strategies in companies since they represent the culmination of a period of financial activity and the basis for initiating other strategies for the following year.

However, this process is not free of difficulties. The complication of tax regulations, the accuracy required in accounting balances and the influence of meeting deadlines can make accounting closing a real challenge.

That is why, on this occasion before the end of 2024, we want to share with you some closing tips that we believe may be of great benefit to you for the correct preparation of your Financial Statements.

1. Check the technical frameworks that apply to your company (IFRS).

2. Request account statements from Territorial and National Entities to reconcile them.

3. Set a closing calendar that establishes deadlines for receiving invoices from suppliers, issuing invoices, year-end inventory and other significant flows in the operation.

4. Review the status of bank reconciliations to clear existing reconciliation items.

5. Reconcile all accounting accounts with extra-accounting modules or files such as accounts receivable, etc.

6. Reconcile transactions made with related companies and parent companies.

7. Prepare the consolidated income, which cross-checks with accounting, income tax return, VAT (value added tax), and ICA (Industry and Commerce Tax).

8. Reconcile the electronic billing received and issued through the portals of the tax entity DIAN (Directorate of National Taxes and Customs).

9. Check the net realizable value VNR of your inventories.

10. Evaluate the deterioration of the portfolio and its fiscal effect.

11. Validate the balance of real liabilities including financial obligations.

12. Analyze the deductibility of expenses abroad.

13. Validate advances to suppliers, taxes and employees.

14. Validate the proper calculation of accounting and tax depreciation to take them into account in the deferred tax.

15. Analyze the calculation of assets and liabilities in foreign currency and the effects of the exchange difference.

16. Verify the tax effects of the sale of fixed assets.

17. Review deductible and non-deductible expenses, credits and other tax strategies.

18. Reconcile accounting balances vs. electronic payroll transmitted.

19. Reconcile the consolidated social benefits and SGS contributions.

20. Make sure to include the correct calculation of the income provision and deferred tax in accordance with current regulations.

These are the general guidelines that we recommend you keep in mind when preparing for the 2024 annual accounting close.

A successful accounting closing ensures the accuracy and integrity of financial records, facilitating informed decision-making and compliance with tax obligations.