Introduction
For any SME in Spain, understanding the basic terms related to management, taxation, human resources, and labor law is essential for effective administration and regulatory compliance. This glossary covers the most relevant terms that will facilitate understanding and practical application in daily operations.
Key Terms for SMEs
Business Management
1. Business Plan
A document that describes the company’s objectives, strategies to achieve them, target market, and financial feasibility.
2. SWOT Analysis
A tool that identifies a company’s Weaknesses, Threats, Strengths, and Opportunities to plan its strategy.
3. Balanced Scorecard
A methodology for measuring organizational performance through financial and non-financial indicators.
Taxation
4. VAT (Value Added Tax)
An indirect tax on consumption that companies must manage in their commercial operations.
5. IRPF (Personal Income Tax)
A tax affecting employees and freelancers, which the company must withhold and declare.
6. Withholdings
The percentage of payment that the company must withhold for taxes from workers or suppliers.
Human Resources
7. Permanent Contract
An employment agreement without an end date, providing stability to the worker.
8. Temporary Contract
A contract with a limited duration to cover specific needs or projects.
9. Payslip
A document detailing a worker’s salary, deductions, and withholdings.
Labor Law
10. Collective Agreement
An agreement regulating the working conditions of a sector or company.
11. Working Hours
The time during which the worker is at the employer’s disposal to perform their work.
12. Social Security
A public system that provides social protection to workers and companies.
Other Relevant Terms
13. Public Aid
Grants or financial incentives granted by public bodies to promote business activities.
14. Public Procurement
The process by which administrations acquire goods or services from companies.
15. Compliance
A set of procedures to ensure legal and ethical regulatory compliance within the company.