In the declaration of Personal Income, for example, the most common tax base is made up of the salary, the so-called work income, less the payment made to Social Security, which is 6-7% on gross salary. The result is the tax base. If there are more wage income they are added. It must be borne in mind that in income tax there are two taxable bases depending on the origin of the income. When an accountant analyzes your balance sheet, he calculates cash flow by differentiating between two fundamental elements:

Working capital corresponds to the surplus of long-term financing

The working capital requirement which corresponds to the cash needed to finance the regular activity of the company.

Master the concepts of cash flow, cash management; working capital (FR) and working capital requirements (WCR) are fundamentals for running a business, regardless of its size or seniority. This requires in particular the establishment of a cash flow plan and regular monitoring of the company’s net cash flow.

This allows the company to be managed by anticipating future financial difficulties and by adapting corrective actions as best as possible. Also be sure of the independent contractor taxes now.

Cash flow and negotiation with financial partners

In addition, when a need for external financing arises, a good knowledge of the situation can reassure potential partners and helps to negotiate good financial conditions. This knowledge is visible through the history of management indicators and the mastery of the economic model and, ultimately, of the company’s financial mechanisms.

Anticipating and measuring the extent of the difficulties and showing good management quality through indicators and relevant financial forecasts are essential to work in confidence with your financial partners (partners, investment funds, bankers, etc.).

There is the general tax base where you have to include income from work or economic activities and some income from movable capital, such as renting a flat. In the income tax savings base, you must state the income from movable capital, that is to say, the interest that the deposit in the bank gives us;the returns that are achieved by participating in investment funds, the dividends or the gains or losses generated by the transfer or sale of assets. Each taxable base is taxed differently. In the Value Added Tax (VAT), the tax base in general is made up of the total amount of the operation carried out.

Monitoring your cash flow means controlling current and forecast incoming and outgoing financial flows.  It is also necessary to work in concert with its financial partners in order to be able to negotiate from a position of strength when everything is going well and react quickly if necessary.  This requires monitoring and anticipating financial movements using appropriate tools. When it comes to taxes, this you have to do.

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