Every company requires a Bookkeeping Service since it is essential to maintaining their finances. This is crucial for business operations and tax preparation as it enables record-keeping that mirrors the activities of the business within a given period. In the fast paced UAE economy, taxation is constantly changing, and businesses face stiff competition. As such paying close attention to financial paperwork has never been more vital, if your company is a small start up, growing SME or bigger corporation, accounting must be done properly for compliance, effective decision making towards achieving sustainable growth.
With this in mind, it’s worth considering the nature of businesses today in the UAE and why they would require bookkeeping services in the first place. Moreover, why would these businesses outsource the book keeping tasks to third party services? In general these services save businesses a lot of costs due webbing allowing them to focus on their core operations, assisting in the expansion of their businesses.
What is BookKeeping?
Bookkeeping is a technical term that encompasses all financial transactions that take place in a business such as sales, purchase, receipts, payments and expenses. The primary goal in book keeping is ensuring that records are up to date, accurate and streamlined.
Although bookkeeping can also be seen as a type of accounting, it is the first step that is required to complete such activities. Inaccurate bookkeeping would mean that all accounting functions such as preparing financial statements, filing taxes and other tasks would be inaccurate. With proper bookkeeping, a business will keep track of its cash coming in and going out to maintain accountability and profitability.
Why is Bookkeeping Important for Businesses in the UAE?
The business culture in the UAE is different. It is influenced by an active market, a growing economy and changing laws and regulations. Whether you are new in the business or you have been in existence for long, bookkeeping is a vital component for the success and compliance of your business. This is especially necessary in the UAE because of the following reasons:
- Adherence To The Laws of UAE
The nation has a clear cut set of procedures on the management of finances to promote accountability and integrity in businesses. One of the more noticeable advancements in the last few years was the implementation of VAT (Value Added Tax) in 2018. It is now a requirement for businesses to maintain accurate records of taxable transactions, including VAT collected on sales and paid on purchases.
To stay in line with (FTA) Federal Tax Authority regulations and eliminate the risk of legal trouble, it is crucial to keep accurate records of transactions. This achievement may be difficult as not adhering to VAT legislation can make a person vulnerable to paying fines, penalties, and even being enzymatically audited. So a superior approach towards ensuring compliance with FTA regulations lies with precise bookkeeping.
- Accountant’s Activity Reports for Accurate Decision Support
Reporting is one of the greatest assets that good bookkeeping brings. If you are analyzing the overall profitability of the company, looking at the liquidity situation, or contemplating establishing a new budget, you will always need data that is provided by financial reports.
Balance Sheets: Focus on all your company’s assets, liabilities and equities
Income Statements: Look at your revenue, costs and profits over a specific timeframe.
Cash Flow Statements: Know the sources and uses of cash for your company.
The combination of timely reporting and good accounting allows managers to assess the main aspects of the company’s operation and take action to improve it.
- Availability of Funds, Financial Management, and Control
Cash flow is the blood of any business. When an organization is conducting various transactions, it’s completely impossible to determine where the cash coming in and going out. This makes it hard to make sound business decisions. Bookkeeping helps you keep track of your cash which helps you decide when you can pay your expenses and what other expenses you may need to prepare for in the future.
UAE Business Management Solutions specialize in bookkeeping and accounting services giving businesses an advantage in understanding spending and revenue maintenace and idealy addressing potential cash obstacles, leading to the averting increase in liquidity related issues. Businesses can take advantage of and address deterministic problems with operational cashflows beforehand, to predict any expenses.
Financial restraints and Business Security
Additionally, a reward of well structured bookkeeping is internal control within the business which greatly helps in fraud avoidance. Being able to quickly dissect records easily aids in locating errors and fraudulent activities allowing the swift working of a business. Having adequate trails of recording assists with monitoring which helps with the securing of a business from spending frauds or misreporting and gross over billing.
Inappropriate financial documentation can drive any business towards the edge, without the help of services that do bookkeeping forms of recording past transactions. Remaining proactive, one can maintain proper documentation and avoid the risk of legal complexities altogether.
The challenges faced with non digital recording of financial transactions
Every business needs the services of a reliable bookkeeper although using the services manually provides a few challenges most commonly faced by small and medium enterprises even today. A few challenges are:
- Excessive time consumption :
If you are not a qualified accountant becoming the head of your business or being an employee would become a nightmare as keeping accurate books would become a difficult task due to the excess time required to do so. Consequently, running and growing your business would take a heavy toll.
- The ever present risk of making mistakes:
Every process is prone to errors, especially recording transactional activities manually. Missing transactions, incorrect entry of data and misplaced receipts all contribute to the bookkeeping process as a whole. However, due to the presence of errors boundaries may be established including but not limited to compliance, financial mismanagement, tax filings and more.
- Insufficient skills and knowledge :
Creating and managing an in-house team can prove to be costly for smaller firms therefore in such cases, bookkeepers are routinely hired and attached to mark the loopholes resulting in firm negligence. Enhanced management can be done only under the right supervision, guidance and knowledge of the finer details and nuances of finance.
- Challenges With Scalability
As your enterprise develops, the amount of financial transactions becomes more vertiginous. Depending on the volume of transactions, manual bookkeeping can be reasonable for small businesses but becomes almost impossible as volume increases. Outsourcing bookkeeping enables companies to increase their business without the hassle of employing extra personnel or having to manage the financial aspect of the business.
Benefits Of Using BookKeeping Outsourcing Services
In order to handle these issues and improve the economic governance, hiring an external bookkeeper has become common among companies operating in the UAE. Here is how your company can profit from bookkeeping outsourcing:
- Affordability
In most cases, hiring an external bookkeeper is less expensive than recruiting an accountant on a full-time basis. This avoids incurring indirect costs like wages, facilities, benefits and training. Besides that, outsourcing services are flexible throughout their growth and you only pay for what you need, as previously discussed.
- Knowledge And Precision
Expert Bookkeepers maintain accurate bookkeeping records, where all expenses and income are recorded, as well as everything related to assets and liabilities. By combining bookkeeping and accounting process, as well as delegating it externally, experts will have a comprehensive view on the needs of various entities within the UAE regulations that need to be addressed.
- Prioritize Your Key Business Operations
Business people may completely concentrate on their area of expertise, which is managing their business with the help of bookkeeping outsourcing. Hence, by employing experts to handle bookkeeping, the owner is relieved of the burden of maintaining financial records and is left with more time to expand the organization, enhance products or services, and strengthen customer relations.
- Efficient Report Generation and Delivery
Outsourcing your bookkeeping has its advantages because it enables you to obtain regular reports on the progress and status of your business. So, whether these are monthly, quarterly, or year-end statements, outsourced specialists guarantee that there will be no delays in your reports.
- Flexibility and Adaptability
When your client base expands and new clientele comes on board, your business grows as well. Hence, maintaining the usual internal staffing levels becomes challenging. When the timeline is tight, your bookkeeping requirements might have to be adjusted. Outsourced bookkeeping enables you to adjust the services that you rendered to fit your ever fluctuating requirements without stressing about adding more internal resources to the mix.
Why Bookkeeping Services Are Important in The UAE: An Informative Video You Have to Watch
The video accentuates the significance of reliable bookkeeping, maintenance of compliance with the tax laws, and outsourcing bookkeeping work in general. It gives an understanding of the state of the economy of the businesses in the UAE, and how any business that seeks professional bookkeeping services can remain robust and prosper. For more details on professional bookkeeping services in the UAE, check the video sponsored by Ample.ae, one of the largest professional bookkeeping providers in the UAE.
Conclusion
Looking at the business aspects of the UAE, one can infer that, for businesses to be financially viable, their bookkeeping, compliance maintaining, and compliance supporting
Looking at societies like Ample.ae who provide professional assistance in pressuring bookkeeping, timely and accurate submission of tax submissions and maintaining accurate and up-to-date financial information always ensures that your business is on a growth track. With your business’s expansion and emergence of new milestones, let the professional tackle your bookkeeping so that you can put your efforts on what really matters
