Do you know what split payment is and when it will be worth to your company?

The “plit payment” (fractional payment) instrument planned for 2027, to combat evasion and ensure more efficient collection, is one of the pillars of the tax reform, regulated this year. This mechanism will directly impact the cash flow of companies, which requires, from now on, preparation to deal with the new reality.

Simply put, “plit payment” is a system where taxes are segregated at the time of payment, going directly to the public coffers without going through the company's account.It means an end to delays in collection and the complexity of tax guides. “It is a dream for the government and a logistical nightmare for those who manage cash flow”, says taxpayer Lucas Ribeiro, founder and CEO of ROI, a leading company in Tax Reform solutions.

In Ribeiro's assessment, “split payment” places the Treasury “in as co-owner of the cashier of the” companies.It compares the change represented by the new instrument with the one provoked when the “Sped” (Public Digital Bookkeeping System). “It is as drastic a change as that. The difference is that now the impact is direct and daily.”

The impacts on cash flow

According to Ribeiro, companies that already face challenges to balance inputs and outputs the “split payment” can light a warning sign.Automatic segregation of taxes reduces the net amount that becomes available in the company's account.And this is not just a technical change & it is a strategic change.

“Imagine that, before, the tax was (IT was ’ in the cash for a few weeks until the expiration of the tab. Now, it will be deducted instantly. Result? Less working capital and greater dependence on” credit, details Ribeiro.

A crucial question: how to survive?

Companies that already work with tight margins need to rethink strategies now, recommends the tax official. Renegotiation of deadlines with suppliers, increased operational efficiency and cost optimization they will be indispensable to face this new reality.In addition, the use of advanced technologies for financial and tax management will become mandatory.

“If the company does not master the data of its operation, the (Split payment’ can become an unsustainable burden. Invoice-To-Pay tools and cash flow simulators integrated with 0split payment’ are solutions that will help companies see the future before it becomes a” problem, says Lucas Ribeiro.

Benefits & challenges

Although the promise to end tax evasion is attractive and positive for the economic balance of the country - the challenges cannot be ignored. Ribeiro lists some of them:

Benefits

• Reduction of tax evasion and unfair competition.
• Simplification of tax collection.
• Increased tax predictability for governments and businesses.

Challenges

• Immediate liquidity reduction.
• Dependency on robust systems for real-time management.
• Need for greater working capital for companies with high volume of taxes.
• Complex reconciliation between operations in the competence versus cash.

If “plit payment’ is inevitable, preparation will be the big game changer. Companies that master the numbers, adjust their processes and invest in advanced technology will come out ahead, stresses the CEO of ROIT. “In the coming management war, whoever has the data in hand will dictate the rules of the game. The “plit payment” is not the end, but the beginning of a new era in business management.”

Ribeiro adds: “So the final question remains: will your company have cash for the “split payment” or will be held hostage by loans and interest?The time to act is now. Who waits for the storm does not prepare to sail.”