What You Should Know About the PGC – SMEs

What You Should Know About the PGC – SMEs

The PGC Pymes (or General Accounting Plan for SMEs) is an abbreviated format with which small and medium-sized companies must work. When using this document, it is important to know how to analyse its structure. 

Below you will find this and other essential information.

What Do the PGC SMEs Consist of?

The General Accounting Plan of an SME comes from the General Accounting Plan, which is the legal text that manages to account for companies. We can also consider the PGC SMEs as a theoretical and practical guide on how to carry out accounting to reflect the events that occur in a company economically and financially.

The Institute of Accounting and Auditing of Accounts (ICAC) is an organization that reports directly to the Ministry of Economy. 

This is in charge of adapting the General Accounting Plan to the various economic sectors and preparing, proposing, varying or analyzing accounting principles. 

Therefore, it can say that its responsibility is to establish the basic and mandatory criteria in this matter. Royal Decree 1/2021, of January 12, contains the new accounting regulations.

Which Companies Can Use this PGC Format?

The organizations that can use the PGC SMEs format are those in which at least 2 of the following events occur for at least 2 continuous accounting years:

  1. That the total assets do not exceed four million euros.
  2. That the net amount of business does not exceed eight million euros.
  3. That the total assets do not exceed four million euros.
  4. That the net amount of business does not exceed eight million euros.
  5. The number of employees during an accounting year is not greater than fifty.

As soon as small or medium-sized companies do not meet 2 of these mandatory conditions, they have to start using the General Accounting Plan (PGC).

The types of small and medium-sized companies that are excluded from the PGC for SMEs are the following:

  1. Those that enjoy securities are admitted to trading in European Union member countries.
  2. Companies that use currencies other than the euro in their economic activity.
  3. Organizations that are part of a group of companies carry out their accounting through consolidated accounts.
  4. Financial companies that have specific accounting criteria.

On the other hand, there is another category to consider, which is micro-enterprises, which, to be considered as such, must meet the following requirements for 2 consecutive years :

Total Assets Must not Exceed One million Euros

The net amount of business must not exceed two million euros.

Employees during an accounting year cannot be more than 10.

Structure of the PGC SMEs

The PGC for SMEs is structured in 5 sections and is shorter than the General Accounting Plan since it simplifies criteria when registering, valuing or reporting within the report that must submit at the end of the financial year.

  • Conceptual framework
  • Registration and valuation standards
  • Annual accounts
  • Chart of accounts
  • Definition and accounting relationship

In conclusion, PGC SMEs have their characteristics and are better adapted to the size and needs of small and medium-sized companies and the different requirements they must meet. It is not only a formal obligation but the result of legal adaptation to technological evolution.

If you want to manage your organization’s accounting, you can help with software like Ekon Finance. 

This allows you to manage financial processes, nationally and internationally, makes it possible to automate administrative tasks that do not generate value and improves the strategic management of your finances.

Also Read: What is Collaborative Economy

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