manage with efficiency finance of a company during times of increased spending can be considerably more difficult than at other times of the year, especially in terms of liquidity and financial solvency. And, in general, the end of the year holidays tend to further compromise the cash flow of a company due to the many payments, surcharges and events that appear during the months of November and December.
These expenses end up involving large amounts of money, with which the financial area of any company begins a race against time to maintain normal operations, in addition to the obligations that arise this season.
Unfortunately, not all manage to optimize their finances in this period, and it is more difficult to settle accounts to start the new year with accrued expenses or a negative balance.
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Not only the payment of legal benefits and taxes usually add a burden to the finances at the end of the year. The gifts to collaborators, dinners with clients, recognition of employees and other closing eventsThey also represent an important part of corporate expenses, but have positive effects on the company’s commitment to its teams, partners and allies. Therefore, it is essential to give timely management to these expenses so that they are contemplated beforehand.
Rindegastos, a business tool that digitizes 100% expense statements, providing control and visualization of expenses and budgets, studied the impact that the holidays have on the finances of companies from multiple sectors, and determined that the actions that are best suited to these dates to maintain financial productivity without sacrificing the festive spirit of the end of the year. These would be the following:
- Set budgets in advance: This is the best method to prevent losses due to a mistaken notion regarding the amount of funds that can be allocated during the season at the end of the year, since it not only establishes limits but also defines specific amounts for each activity.
- Generate overflow alerts: Not only from the financial area can you alert when the limit defined for each expense is about to be reached. More and more digital tools allow the synchronization of internal data to notify when the cash flow is at risk of financial incapacity before going through an awkward moment in front of a partner or client.
- Automate expenses and reports: resorting to technology is always good to corroborate information and avoid accounting errors. For example, scheduling the payment of obligations makes it easy to calculate how much money you really have for the holidays, all from the same platform and with real-time information.
- Hierarchize and prioritize: One of the most sensible exercises, especially when going through a reduced solvency, is to decide which dependencies and businesses are most important and necessary -such as workers, clients and suppliers-, with the purpose of avoiding the waste of resources, but taking care of corporate relationships.
Ariel Puga, VP of Latam Sales at Rindegastos, recommends bringing a rigorous accounting support of all the expenses that a company has, so that they are deductible when presenting them in the annual tax return, such as income tax.
“The advantages of recording detailed financial movements for meetings, courtesies or celebrations during the holidays are many and can provide support when paying tax obligations”Puga explains.
However, in addition to the tax implications, organizing finances more ‘joyful’ of the year you can draw a road map to know how the annual returns perform, with the objective of better preparing for the festivities and knowing the fluctuations in the expenses of each period of the year.
This effort will not only have an effect in taking care of the internal finances of a company. In the same way, it will promote beneficial practices for the parties in charge of approving budgets, scheduling meetings, or reviewing the good use of corporate economic resources, whose management is currently supported by accounting platforms, applications and software that guarantee that it does not escape. No expense, especially during peak seasons.
