For the numbers to add up, you have to choose the right accountant
So-called “accounting tricks” almost always turn out to be illegal. The best practice is the simplest one: doing things by the book.
VS Advisory·
Throughout my experience as a consultant I have heard about many accounting tricks. I am very curious and I always ask for them to be explained down to the last detail. Most of the time they are nothing more than illegal practices. Some very elaborate and others rather crude, but illegal all the same.
Because we are convinced that doing things as the law establishes is the safest and most successful path for a company, we always encourage our clients to do so. Some time ago, a small business owner came to our offices.
Although she is very optimistic and entrepreneurial, she was distraught. On the bad advice of a poor accountant, she had used the ITBIS (VAT) she had collected to buy materials she needed. Later, her new income was not enough to replace what she had “borrowed”.
Fortunately, the late-payment penalty she had to pay was not that high. It could have been much worse! The same day we met, I recommended the best possible practice so that taxes would never surprise her again. She implemented it immediately and has not had problems since.
You can put it into practice too; it is very simple: set the ITBIS aside from day one. Open a bank account, transfer the ITBIS you collect into it immediately, and keep it exclusively for that purpose. When you make purchases, that ITBIS works as savings.
As you can see, this practice has advantages all around and, most importantly, we achieve what we want by doing things by the book.