What is Tax Management? Is it important for SMEs?


Tax management consists of managing all company processes that involve taxes and strategic business planning. This means that tax management goes far beyond the correct choice of the company’s tax regime. It is important to price correctly, understand the taxation of suppliers, tax benefits of products sold and services performed and their updates over time, etc. That is why it is extremely important to have the support of an accounting firm that understands your needs and provides you with all the information that you need to take care of your company properly. It is highly recommended to use Income tax calculator so that you stay ahead of your accounting team in terms of knowledge.

Why is tax management important?

Taxes, fees and contributions are fundamental elements in the composition of the price of your product or service and can be fundamental when it comes to bringing competitiveness to your brand. In addition, good tax management reduces the risk of irregularities with the tax authorities, bringing greater security in the discharge of your obligations. Conducting a tax management routine within the company, regardless of the size or segment it operates in, is important to ensure that all the particularities of its activity, city, state and tax regime are being taken into account, carry out maintenance and adjust the tax operation.

Performance indicators and tax management

In order to keep the company’s tax management up to date it is important to have discipline and carry out the analysis of tax impacts on your company on a regular basis. To help you in this mission, we have brought you some performance indicators that you can periodically monitor with your company’s results in hand:

Total invoices issued

It may seem redundant, but it is very important to check the issuance of your invoices every month to ensure that everything was issued correctly. In addition to preventing filling errors from being transmitted and the correction period being exceeded, you can review whether the tax benefits were correctly applied in each operation and that no invoice was issued in duplicate.

Total returns and cancellations

It is very important to ensure that all invoice cancellations have been made and the returns of goods have been operated correctly as these operations deduct your billing for the current month. So be very careful when issuing return invoices, when necessary, and ensure the correct cancellation of operations to avoid paying taxes unduly.

Effective rate

Controlling the actual amount of taxes paid by the company on a monthly basis is essential to carry out tax planning and analyze whether it is covered by the most advantageous regime. It is worth mentioning that in addition to the commonly known billing taxes, there are other taxes that may apply to specific operations such as: payroll of employees, purchase of goods from other states, provision of services to other cities, etc.

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