Business Operations: Procurement to Taxation

Posted on Jan 25, 2025 in Economy

Procurement

Procurement is the process of purchasing materials for a business and storing them until they are used or sold. It is divided into:

  • Shopping: This involves researching product features, identifying suppliers, providing products, and negotiating contracts with vendors.
  • Storage: This involves sorting, storing, and classifying the stock.
  • Inventory Management: This involves tracking the entry and exit of products.

Production

Production aims to capitalize on the company’s capital. It involves monetizing workers and production management services for maximum benefits.

Productive Efficiency

Productive efficiency is the result of optimizing technical resources to maximize economic efficiency. We must keep in mind:

  • Quality of the final product
  • Health and safety
  • Environmental friendliness

Company Costs

Companies have fixed costs (e.g., local rental) and variable costs (e.g., water supplies, electricity, personnel) that depend on the level of production. The yield limit is the point at which the firm becomes profitable, where it produces more than the company’s costs. Stocks are a resource for the company, which must manage their storage cost and adjust the level of production and distribution. Fiscal and financial costs should also be taken into account.

Marketing Mix

The marketing mix is a set of business activities designed to meet customer needs for a profit. It takes into account the product, promotion, pricing, and distribution. Listing a product involves developing a brand that identifies the product at a generic level. To do this, we must develop:

  • An imaginative strategy
  • Design of arbitrary and subjective reference advantages of the product

A good advertising campaign should be developed through various media. The message must attract customer attention, be credible, and be memorable. To sell a product, strategies for design, study, and labeling must be developed. It is also important to listen, show empathy, have confidence in what you sell, and be constructive, positive, ethical, and a good negotiator.

Franchises

A franchise is a general trading company through which one company grants another the right to use elements of its business idea in exchange for payment.

Product Lifecycle

The product lifecycle consists of the following stages:

  • Release
  • Growth
  • Maturity
  • Decline

Taxation

Taxation is the set of rules for the maintenance of public expenditure by society. There are three categories:

  • Rates: Paid in exchange for a service (e.g., cranes, fords).
  • Special Contributions: Payment in exchange for obtaining a private benefit because of public works.
  • Taxes: Imposed by the public administration (e.g., maintenance of hospitals, police).

Taxes

There are two types of taxes:

  • Direct Taxes: Fall on people and companies (e.g., income tax).
  • Indirect Taxes: Record the performance of certain acts (e.g., taxes on deeds).

Taxes have a number of common elements:

  • Taxable event
  • Taxpayer
  • Tax base
  • Tax rate (percentage)
  • Progressive tax rate (increases with increasing taxpayer’s economic income)
  • Tax amount (quantity to be entered into the Treasury’s coffers)

Taxes can be classified by the public bodies that manage them:

  • Local (City Hall with fords)
  • Economic (Tolls)
  • State (Personal Income Tax)

They can also be classified by economic activities (exercise of a company).

Income Tax

Income tax is a direct and progressive tax that records personal income. It is divided into:

  • Yields of self-employment
  • Furniture capital
  • Dividends
  • Income and economic activities of the self-employed
  • Gains and losses

The discount strip varies between 22% and 45%.

Calculation of Returns for Entrepreneurs

It is required to keep records governed by the Commercial Code. Returns are calculated in three ways:

  • Normal Direct Estimation: If billed more than €600,000 per year, an estimated difference between income and expenditure.
  • Simplified Direct Estimation: For companies that do not exceed €600,000 per year.
  • Modules: For certain business activities stipulated by law EHA/34-13 of 2008 issued by the Treasury.

Corporation Tax

Corporation tax is a direct and proportional tax that periodically records the income earned by corporations. It is determined by income less expenses. The tax rate ranges from 30%, but for the first €120,000, it is 25%. There are also deductions that apply whenever the company invests in technological innovation, environmental protection, and worker training. Income tax savings can be achieved through renting or leasing.