July is usually a busy month for businesses. For many companies whose fiscal year coincides with the calendar year, it's the month for filing corporate income tax returns.
It's also a time to review results, analyze deviations, and begin to look more clearly toward the second half of the year. However, there are still companies that approach this period with a An overly limited vision: comply, present, and move on.
The problem with that approach is that it leaves out the most valuable part of the accounting and tax closing. Because a proper review isn't just about avoiding errors or complying with regulations. It helps to better understand the company.
By mid-year, the accounting data already tells a fairly accurate story: how profitability is evolving, what impact costs are having, how the treasury is behaving, whether there are outstanding balances that are difficult to recover, whether expenses are correctly recorded, or whether the company is taking proper advantage of the tax options allowed by the regulations. The question is whether the company simply records that information or whether it actually interprets it.
That is the difference between accounting understood as an administrative obligation and a more analytical accounting, used as a management tool.
One of the first points that should be reviewed is the consistency between accounting and periodic tax obligations. Accounts related to VAT, withholdings, advance payments, payroll, Social Security, or Corporate Income Tax should not be analyzed in isolation, but rather reconciled with the corresponding modelsWhen this review is left until the end, it is easier to find discrepancies, pending items, or balances that do not accurately reflect the company's reality.
It is also convenient Review the treasury and debt with special attentionIt's not enough to know how much money is in the bank. You have to analyze maturities, short- and long-term debts, credit lines used, accrued interest, and potential liquidity pressures stemming from taxes, investments, or growth. In many cases, the problem isn't a lack of activity, but rather a failure to properly forecast when receipts, payments, and tax obligations will occur.
Another particularly relevant area is fixed assetsThe company must verify that its assets are correctly recorded, that there are any projects under construction that have already become operational, that depreciation is being applied consistently, and that certain expenses should have been recorded as part of the asset's value rather than as an expense for the period. This review can have a direct impact on both the accounting profit and the corporate income tax base.
The same applies to stocksIn companies with inventory, stock levels cannot be approximate or based solely on business experience. There must be clear identification of items, proper valuation, and, where applicable, sufficient evidence to justify impairments. Otherwise, the balance sheet may present a distorted picture of the business's true financial position.
Reviewing customers and suppliers also often reveals valuable information. Verifying that all issued and received invoices are recorded, analyzing past balances, reviewing related-party transactions, and assessing doubtful accounts receivable is no small task. It can anticipate liquidity problems, tax risks, or adjustments that will affect the year's profit or loss.
Regarding expenses, One of the keys is to distinguish between accounting expense and tax-deductible expense. The fact that an expense is recorded does not automatically mean it can reduce the taxable base. It must be justified, properly accounted for, correctly allocated to the fiscal year, and related to the business activity. Furthermore, certain items—such as penalties, gifts, some impairments, or certain financial expenses—may require tax adjustments. In the case of directors' compensation, for example, it is important to verify that it is stipulated in the articles of association and properly approved when necessary to support its deductibility.
In addition to all this, there is the tax planning itself. Corporate Income Tax should not be calculated only when it's time to file. The offsetting of negative tax bases, the application of reserves, deductions for R&D&I, job creation, investments, and certain depreciation allowances require prior analysis. Some decisions can still be made during the exercise; others, if they have not been planned in advance, simply arrive too late.
That's why July is a A good time to ask some questions that go beyond taxesIs the company generating the expected margin? Are there any expenses or investments that should be reviewed before the end of the year? Are there any outstanding tax losses to be offset? Are the available tax incentives being applied correctly? Is the corporate structure still efficient? Will the cash flow support the projected growth? Are there any related-party transactions that need better documentation?
These questions are especially relevant for companies that are growing, operating in multiple markets, part of a corporate group, or considering investments, financing, corporate reorganizations, or entry into new projects. In these cases, The accounting and tax closing ceases to be a routine review and becomes a key element for making decisions with more information and less risk.
In short, fulfilling tax obligations correctly is essential, but not sufficient. The real opportunity lies in using accounting and tax information to anticipate, correct deviations, and better prepare for the second half of the year.
Companies that view closure as a simple formality often arrive late to many decisions. Those who understand it as a management tool can detect risks before they become problemsto make better use of their resources and plan their growth with greater security.
July shouldn't just be the month for filing taxes. It should be, above all, the It's time to look at the company rigorously and ask yourself if the numbers are really helping to make better decisions.
Javier Martinez,
MANAGING PARTNER OF LEIALTA
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