Tax credits: how not to lose money through lack of control

O tax credit is an increasingly important issue for companies wishing to reduce costs, increase profit margins and improve financial management. Even so, many organizations continue to lose money simply because they don't have adequate control over the taxes paid throughout their operations.

In practice, thousands of companies fail to take advantage of legitimate tax credits due to faulty tax records, operational errors, failure to check invoices or lack of specialized accounting follow-up.

What's more, with the changes brought about by tax reform and the expansion of digital inspection mechanisms, tax control has become even more strategic.

Today, it's not enough just to pay taxes correctly. Companies also need to ensure that they are taking advantage of all the credits allowed by law.

What is a tax credit and why is it so important?

O tax credit works as a tax compensation mechanism permitted by law in certain tax regimes.

In short, it allows the company to use amounts paid in previous stages of the chain to reduce the amount of taxes due on subsequent operations.

This model is very common in non-cumulative taxes, especially in companies that fall under the Real Profit and in operations involving:

• PIS;
• COFINS;
• ICMS;
• IPI;
• CBS and IBS in the tax reform.

In practice, when a company buys products, inputs or services related to its operational activity, it can generate tax credits that help reduce the taxes paid later.

The problem is that many organizations don't have the right processes in place to identify, control and use these credits correctly.

In some cases, the amounts are simply not used. In others, errors in tax registration or bookkeeping prevent the credits from being used legally.

In addition, there are companies that even have tax credits, but are unable to use them due to a lack of documentary and operational control. This has a direct impact on cash flow.

When a company loses tax credits, it unnecessarily increases its operating costs and reduces its competitiveness in the market.

Another important point is that tax credit not only represents tax savings. It also has an influence:

• Price formation;
• Profit margin;
• Cash flow;
• Competitiveness;
• And financial planning.

That's why control of tax credits should be treated as a strategic activity within business management.

The importance of fiscal control and technology

Correctly controlling tax credits requires much more than just entering invoices into the system. Today, tax management depends directly on organized processes, information integration and appropriate technology.

Many companies still operate with manual controls or outdated systems, which significantly increases the risk of tax errors.

When there is no efficient control structure, problems such as tax discrepancies, lost credits and tax inconsistencies become much more frequent.

In addition, Brazilian tax legislation is extremely complex and undergoes constant changes. This requires continuous updating of internal processes and tax parameterization of the systems used by the company.

In this scenario, ERP plays a fundamental role. A poorly configured system can lead to:

• Incorrect tax classification;
• Incorrect tax assessment;
• Unused tax credits;
• And inconsistencies in tax bookkeeping.

On the other hand, when the ERP is correctly parameterized, the company gains more control, predictability and tax security.

Another important point is the automation of tax processes. Companies that use technology strategically succeed:

• Reduce operational errors;
• Improve document control;
• Increasing the traceability of information;
• And identify tax credit opportunities more efficiently.

Integration between areas also becomes much more efficient. O tax control modern depends on communication between:

• Tax;
• Accounting;
• Financial;
• Shopping;
• Stock;
• And billing.

When this information doesn't match up correctly, the company loses visibility of its own tax credits.

That's why investing in technology and tax organization is no longer just an operational issue, but a strategic necessity for companies that want to grow safely.

Tax recovery: companies may be leaving money idle

Many companies have accumulated tax credits without even knowing it. In other cases, there are amounts unduly paid or overpaid that could be recovered through a specialized tax review.

Tax recovery consists precisely of identifying legal opportunities for offsetting or refunding incorrectly paid taxes.

This can happen for various reasons, such as

• Calculation errors;
• Inadequate tax classification;
• Undue payments;
• Unused credits;
• And incorrect interpretation of legislation.

In many cases, companies accumulate tax losses for years without realizing it.

The problem is that many entrepreneurs believe that tax recovery means taking on high tax risks, when in fact the process can be carried out completely legally and safely, as long as there is specialized technical analysis.

In addition preventive tax review also helps prevent further losses in the future.

Another important point is that tax recovery doesn't just benefit large companies. Medium-sized businesses can also have significant opportunities for tax savings.

Depending on the activity and operating volume, the tax review can identify:

• PIS and COFINS credits;
• ICMS credits;
• IPI credits;
• Taxes paid in duplicate;
• And opportunities for tax compensation.

With tax reform, The correct use of credits is becoming even more important.

Companies that maintain organized processes will find it easier to recover credits and reduce financial impacts during the transition to the new tax system.