The Importance of Having Accounting Advice from the Creation of Your Business

Importance of Having Accounting Advisory Services from the Creation of Your Business

Accounting advisory services are essential for your business, not only to maintain control of all operations from the very beginning, but also because you may be missing out on important benefits available to your company.

An example of this is that newly created companies may apply a discount on parafiscal payments: 75% in the first year of incorporation, 50% in the second year, and 25% in the third year (Law 590 of 2000 and Decree 525 of 2009). To be eligible for this benefit, you must first update the RUT and indicate it in the user creation data with the information operator where the company will make social security and parafiscal contributions. This is just one example.

You cannot control what has no controls. From the moment you begin the creation process, it is important to establish:

• The control of all monetary activities derived from operations.
• Cash control.
• The detail of accounts receivable from clients.
• The detail of accounts payable to suppliers.
• The detail of accounts payable for taxes.
• Clarity regarding which taxes the company must file and pay.

For this last obligation, it is important to have a tax calendar detailing the due dates for each requirement: Withholding tax, Value Added Tax (VAT), Industry and Commerce Tax (ICA), and ICA withholdings.

You must determine the software that will be used to process accounting information, as well as the software used to issue sales invoices. It is also necessary to understand which documents are essential to properly support the company’s accounting records.

Additionally, good accounting management will allow you to analyze your project from a financial perspective. This includes:

• Knowing whether your business has a breakeven point (income − costs and/or expenses = zero).
• Determining the profitability of the company.
• Assessing whether the business is viable for potential financing.

Therefore, if you have already started your company or are about to create it, keep in mind that having strong accounting support is undoubtedly a fundamental part of any successful business, as it will allow you to make decisions based on real and accurate information.

Written by: Claudia Benito.