Ipswich Town have announced a loss of £7.2m for the year to June 2014, a fall of £2.6m on the previous 12 months.
Town will avoid any Financial Fair Play sanctions, having come in £800,000 under the limit of £8m for losses in the 2013-14 season.
The figure is a dramatic reduction for the Championship side compared to 2011-12, when they lost £16m.
However, Ipswich's overall debt rose by £3.6m to £86m, which is almost entirely owed to owner Marcus Evans.
|Ipswich Town: Key figures|
The businessman, who bought a majority shareholding in the Portman Road club in 2007, provided an extra £3.8m of loans for ongoing funding and player investment, but the club received almost £200,000 in payments from convertible loan notes.
Ipswich's turnover was marginally down from £13.84m to £13.55m, but there was a £1.1m saving in wages, which fell from £15m to £13.9m.
The latest figures do not include the sale of Aaron Creswell to West Ham for a reported £2m, and Town's rise to second in the Championship this season is expected to lead to increased gate receipts during the current financial year.
Boss Mick McCarthy has spoken of his scepticism towards the Financial Fair Play rules, which are designed to control spending.
However, he has not spent anything on transfer fees since the end of 2012 in an attempt to reduce the club's overall outlay.