The justification process can make the difference between aid becoming a consolidated financial resource or a reimbursement risk that directly affects the company's financial health.
What is the justification for aid?
It is the formal process through which the company certifies to the funding body that:
- Los expenses and investments have been made and paid for as approved in the application.
- They have Achieved the technical objectives or business described in the project.
- They have respected deadlines, conditions and limits defined in the resolution.
This process is not a simple administrative procedure. It is the key that opens the door to the definitive collection of aid and that protects the company against possible refunds or financial penalties.
Why is it so important to justify correctly?
1. Because without justification, there is no charge... or you have to return it
Practical example: CDTI (Center for Technological Development and Innovation)
In lines such as PID, NEOTEC or CLICK, CDTI makes payments as the progress of the project is justified. This involves the presentation of:
- Technical reports
- Invoices and actual payments
- Payroll and evidence of staff dedication
- External audits, in many cases mandatory.
If the justification is incomplete or incorrect, not only are the following disbursements blocked, but a full refund of what was received, plus legal interest, may even be required. And this happens more often than it seems.
2. Because it protects your treasury
A common mistake made by many startups is to consider the money received as “their own and definitive” right from the start. But in lines of Subsidy after, such as:
- R & D Grants from ACCIÓ (Catalonia)
- Torres Quevedo or Ramón y Cajal (recruitment of research staff, Ministry of Science)
- International cooperation projects funded by the EU
... the company must Anticipate the expense and justify it before receiving the refund. A planning error or a denied justification can create liquidity tensions and even jeopardize the continuity of the company.
3. Because it affects future aid
All public funding bodies review the compliance history of the applicant companies before granting new aid:
- CDTI or Ministry of Science they review previous files before granting new aid.
- Horizon Europe or EU programs can directly exclude entities with a history of mismanagement or incomplete justification.
- Some Autonomous Communities such as Community of Madrid or Junta de Andalucía they have scoring systems in which the quality of previous justifications counts.
Mismanagement or non-compliance can Close future doors or significantly reduce the amount subsidized.
4. Because it gives credibility to investors and partners
From the perspective of a CFO, correctly justifying public aid is more than a procedure: it is a sample of financial and management maturity.
When a company demonstrates its capacity to meet the technical, administrative and financial requirements of public bodies, it transmits:
- Transparency
- Operational capacity
- Financial Control
This is highly valued by investors in future rounds, venture capital funds, banks or even business partners.
On the other hand, a history of problems with public aid (refunds, inspections, unaccepted reports) may Destrain trust and curb investment decisions.
What does it mean to justify correctly?
Justifying well isn't just about presenting invoices. It requires a combination of accounting discipline, financial vision and operational alignment.
The most common items to prepare are:
- Accounting documentation: invoices, payments, bank reconciliation
- Work documentation: payroll, contracts, timesheets, working life
- Technical Documentation: progress reports, deliverables, publications, prototypes
- Formal documentation: official models, affidavits, audits
- Records and Evidences: minutes, emails, screenshots of software usage, etc.
Each agency has its templates, deadlines and requirements. The key is in Plan the justification from day 1 of the project, not when the delivery deadline approaches.
Practical recommendations to properly justify aid
- Define those responsible from the start
Don't leave the justification only in the hands of the financial department. It also involves the technical, legal and HR team if applicable. - Make partial closures
Every 2-3 months, it collects documentation and reviews the project status internally. This avoids accumulations or errors at the last minute. - Preserve evidence beyond the expense
It's not enough to just pay a bill. Many agencies ask to demonstrate actual use and execution of expenditure: reports, deliverables, tangible results. - Work with advisors if the project is complex
In aid with a heavy technical or administrative burden, having specialized advisors can avoid costly errors. It's not an expense, it's an insurance policy. - Don't make changes without communicating it
If there are technical deviations, supplier changes, staff restructuring... inform the agency. Many entities allow modifications if they are justified before executing the change.
The justification phase is not a secondary procedure. It is the stage that guarantees the collection, consolidation and traceability of public funds received.
From the experience of Intelectium, our recommendation is clear: plan, document and review. Because ill-justified aid can turn into a serious problem, and well-managed aid can open the door to many more.
If you have questions about how to properly justify help or need support in this process, do not hesitate to contact us through the following link.
