In an SME or a professional self-employed individual, the difference between operating with peace of mind or suffering cash flow tensions usually lies in three prior decisions. Defining a fiscal calendar integrated into the budget, establishing operational rules for invoicing and expenses, and assigning clear responsibilities with periodic reviews. With this framework, VAT, personal income tax and corporate tax cease to be one-off events and become repeatable and controlled processes.
The first pillar is the calendar. It is not enough to note down filing and payment dates. It is advisable to translate each obligation into a predictable cash flow. It is recommended to reserve weekly a percentage of each collection in a separate account designated for taxes. This account functions as a buffer and avoids resorting to credit lines to pay taxes. Furthermore, the calendar must be synchronized with invoicing and treasury. If the company invoices at the end of the month but collects after 45 days, the reserve for VAT and taxes must be anticipated with a provision scheme that does not depend on effective collection.
The second pillar is the invoicing and deductible expenses policy. In VAT, the correct issuance of invoices, the identification of applicable rates and discipline in declaring input VAT determine the balance to be paid or refunded. In activities with a mix of exempt and non-exempt operations, the pro-rata requires an initial estimate and an annual adjustment. If the cash accounting scheme is chosen, the treasury gains alignment between accrual and collection, but operational administration requires exhaustive control of payment and collection dates. The expenses policy must specify which concepts are deductible, how they are justified and within what timeframes they are recorded. Without a written rule, deduction becomes arbitrary and generates risks upon review.
For self-employed individuals, personal income tax is structured through payments on account on net income and withholdings applied or borne. The management key is to transform the calculation of income into a monthly process, even though the formal obligation is quarterly. This internal closing converts personal income tax into a predictable flow and allows adjusting prices or expenses before reaching an unexpected settlement.
In companies, corporate tax is governed by three pieces. A reliable monthly accounting close, a schedule of temporary differences to anticipate adjustments and a routine for estimating the tax result that links with installment payments. The nominal rate does not explain the cash paid if depreciations, impairments, non-deductible provisions and compensation of tax bases are not modeled. Financial management must prepare a bridge between EBITDA and taxable base that is updated with each internal close and that feeds the payments on account to avoid bulky final balances.
Having professional support, such as that offered by the Economic Office of Galicia, can be decisive for successful implementation. Take advantage of the specialized advice and free resources at your disposal to strengthen your business project.
