Year-end closing is one of the most crucial activities for any company, as it marks the end of a financial cycle and establishes the foundation on which strategies and financial decisions for the next period will be defined. In Costa Rica, this process must be carried out with rigor and precision to ensure compliance with local regulations set by the Ministry of Finance and the General Directorate of Taxation.

Beyond meeting tax obligations, year-end closing represents a strategic opportunity to evaluate the financial and operational performance of the previous year, identify areas for improvement, and optimize accounting and administrative processes. It is the ideal time to review and adjust accounting, administrative, and tax policies, and to implement improvements that strengthen the financial structure of the company. An efficient year-end closing also sets the foundation for solid planning for the following year, aimed at growth and adapted to the new challenges of the market.

December 31 marks the fiscal year-end for individuals and legal entities engaged in income-generating activities. These taxpayers must file Form D-101 with the General Directorate of Taxation, reporting services provided, assets located, or capital used during the corresponding fiscal period.

This process is crucial, as it allows taxpayers and their advisors to analyze the period’s results, including both income and expenses, to plan the taxes to be paid. In addition, a detailed review of the results may lead to adjustments that optimize the tax return, avoiding overpayment, always within the established legal limits.

It is essential to stay informed about the changes applicable to the current fiscal period, such as the Electronic Invoicing Regulations, rules regarding purchases from non-residents, or Law 10392 for SMEs, which extends income tax reductions for Micro, Small, and Medium Enterprises. Taxpayers must keep accurate documentation, update financial statements and income/expense records, and properly classify expenses. They must also ensure that all available deductions and tax credits are recorded to properly calculate their tax obligations.

If a submitted return contains errors, it is possible to file an Amended Return following the procedure established by the Ministry of Finance. This option allows incorrect data to be corrected and helps avoid greater penalties.

In summary, year-end closing is not only an obligation but also an opportunity to improve the company’s financial health and ensure a strong start to the next fiscal period.

The role of technology in year-end closing

In recent years, technology has significantly transformed accounting and administrative processes. Digital tools allow for more efficient automation, reducing the risk of errors and improving processing speed. Platforms like Odoo, QuickBooks, and other enterprise management tools enable real-time tracking of transactions, income, and expenses, greatly facilitating the year-end closing process. In Costa Rica, where digitalization of tax administration continues to advance, it is essential for companies to adopt technologies aligned with local regulations, such as electronic invoicing and the digital submission of reports to the General Directorate of Taxation. Technology, combined with solid processes, enables a faster and more effective closing.

Additionally, implementing tools for cybersecurity management becomes key to safeguarding data integrity. This not only ensures compliance with local regulations but also protects the company from potential vulnerabilities that could compromise financial information.

The importance of administrative processes in year-end closing

Administrative processes are essential to ensure that year-end closing is carried out efficiently and in compliance with regulations. These processes include reviewing accounting records, bank reconciliations, and inventory updates, as well as the proper documentation and filing of all relevant information. Clear, well-organized documentation is crucial to support the tax and financial reports submitted to the tax authorities. Furthermore, administrative processes must be aligned with the company’s strategic objectives so that year-end closing is not just a formality but a tool for planning and projecting the new year.

It is also important to use year-end closing as an opportunity to analyze internal procedures and determine whether administrative processes are efficient enough or if adjustments are needed. Standardizing processes and integrating accounting, administrative, and financial policies are fundamental aspects to ensure successful operational continuity.

Preparation for year-end closing: A time for reflection

Year-end closing is the ideal time to reflect on achievements and areas for improvement throughout the year. Companies should conduct a comprehensive analysis of their financial results, identify strengths and weaknesses in resource management, and establish corrective actions for the upcoming year. This is an opportunity to adjust financial strategies, such as cost optimization, contract renegotiation, and improved efficiency in operational processes. A well-executed closing allows companies to face the new year with a clear and optimistic vision, based on solid strategic planning.

In this process, it is also important to consider migrating to new international standards such as IFRS (International Financial Reporting Standards) and IAS (International Accounting Standards). This transition is fundamental for companies seeking to improve financial transparency and align with global best practices.

Lessons learned and a mindset for change in 2025

Year-end closing should be seen as an opportunity to learn and adapt to changes. At the end of 2024, companies must be able to assess what has worked and what has not, in order to establish an action plan for 2025. In this regard, a mindset for change is essential. Technology, digitalization, and continuous improvement in administrative processes should be considered allies for the coming year. Adaptability and flexibility in implementing changes can make a significant difference in a company’s competitiveness.

This mindset for change must also be accompanied by the implementation of an organizational culture that values continuous improvement. Open communication and ongoing training are crucial to successfully implementing the technological and administrative transformations necessary to ensure sustained business growth.

Regulatory compliance and process optimization

One of the main responsibilities in year-end closing is ensuring compliance with all current tax and labor regulations in Costa Rica. This includes filing tax returns, paying income tax and VAT, and complying with labor provisions such as year-end bonuses, severance, and other benefits. However, compliance should not be seen only as an obligation but also as an opportunity to optimize processes. Companies that implement well-structured administrative processes and leverage technology for tax compliance can significantly reduce the time and costs associated with year-end closing.

It is advisable to establish clear accounting policies that cover the proper classification of assets and liabilities, as well as the correct accounting of income and expenses. This, combined with strong internal controls, allows the company to minimize risks and avoid issues during audits.

Conclusion: Looking ahead

Year-end closing for 2024 should be an integrated process that not only ensures compliance with tax obligations but also serves as an opportunity to optimize accounting and administrative processes, adopt new technologies, and reflect on the company’s strategies. In Costa Rica, compliance with tax and labor regulations is essential, but so is the ability of companies to adapt to change and take advantage of opportunities for improvement. Starting 2025 with a mindset of change and continuous improvement will give companies a strong competitive advantage.

Additionally, it is important to establish a solid foundation with well-defined accounting, administrative, and financial policies. This, combined with the adoption of international standards such as IFRS and IAS, will strengthen the company’s operations and allow it to face the future with a more strategic approach. Implementing cybersecurity measures, both for data protection and compliance purposes, has also become indispensable in today’s context.

How Asicon Consulting can help you optimize your 2024 year-end closing and plan for a successful 2025

At Asicon, we understand that year-end closing is not just a formality but a strategic opportunity to ensure your company’s financial health and establish a solid foundation for the coming year. With our expertise in accounting and technology consulting, we can help you carry out an efficient year-end closing, complying with all local and international regulations while optimizing your accounting and administrative processes.

Tailored solutions for your year-end closing

Asicon offers a range of customized services to support your company at every step of the year-end closing process:

1. Regulatory compliance advisory: Our specialized team ensures your company complies with all tax and labor obligations in Costa Rica, such as filing the Income Tax Return (Form D-101) and paying income tax and VAT. We make sure your reports are complete and error-free, minimizing the risk of fines and penalties.
2. Optimization of accounting and administrative processes: We analyze and improve your internal accounting processes, helping you save time and reduce costs. We provide technological solutions that automate repetitive tasks, contributing to a faster and error-free year-end closing. Using platforms like Odoo, we implement tools that allow real-time transaction management, giving you better insights for financial decision-making.
3. Review and improvement of accounting and tax policies: We review your company’s accounting and tax policies to ensure they are aligned with current regulations. In addition, we identify areas where adjustments can be made to maximize tax deductions and reduce your tax burden legally and effectively.
4. Implementation of technology solutions for a faster closing: With Costa Rica’s growing digitalization of tax administration, it is essential that your company adapts to requirements such as electronic invoicing and digital report submission to the General Directorate of Taxation. At Asicon, we help you implement technological solutions for a faster, more accurate, and more transparent year-end closing.
5. Strategic planning for 2025: Beyond year-end closing, we work with you to create an action plan for 2025, setting clear financial goals, optimizing administrative processes, and adjusting operational strategies. We help identify improvement opportunities through strategic planning aimed at growth and adapting to market changes.
6. Training in accounting tools and regulations: We provide training programs for your accounting and administrative teams to keep them up-to-date on best practices, new regulations, and efficient use of technological tools that will enhance financial management. This ensures your team is better prepared to face the challenges of the upcoming fiscal period.

Benefits of working with Asicon Consulting:

• Compliance and security: We ensure your company complies with current tax and labor regulations, avoiding fines and penalties.
• Operational efficiency: Optimization of accounting and administrative processes, reducing time and operational costs.
• Specialized advisory: Personalized advisory in tax, accounting, and technology strategies.
• Digital transformation: Implementation of technology solutions that facilitate year-end closing and improve decision-making.
• Strategic approach: Support to plan and project a successful 2025, with clear objectives and strategies adapted to market challenges.

How to get started?

If you are ready to carry out an efficient year-end closing and plan for a growth-oriented 2025, contact Asicon for a personalized consultation. We are ready to help you optimize your accounting processes and maximize all available tax opportunities for your business.