Why Accounting Services Are Essential for Small Businesses in Dubai?
Dubai offers numerous opportunities for businesses operating there. It also comes with financial responsibilities. Accounting is a crucial part of the steps taken by the business for business success. Accounting encompasses compliance with relevant financial regulations and reporting requirements; preparation of tax returns, financial statements, and other regulatory requirements; analyzing the financial data to provide insight to help management make informed decisions; identification and mitigation of financial risk by implementing internal controls; developing budgets; providing recommendations for improvement in financial performance; and ensuring that financial statements are free from material misstatements.
This blog is intended to delve deep into the importance of accounting and bookkeeping for small businesses in Dubai.
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Statutory requirements:
VAT law requires mandatory registration and compliance when the supply crosses the threshold limit of 375,000 AED in the previous twelve months. Therefore, it is important for the business to monitor the revenue frequently. Thus, avoiding the levy of penalty and fines. Further, corporate tax laws also provide exemption up to 375,000 AED.
For small businesses, non-adhering to the statutory regulations could mean penalties and additional cash outflow. Therefore, it is important to track the threshold limit.
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Tax computations:
By maintaining the regular books of accounts, the business could easily monitor the claiming of VAT inputs to reduce the tax liability, and the tax computations could be drawn easily, saving time.
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Detect frauds and profit leakage:
For the flourishing business, the main aspect is to detect the unnecessary and avoidable expenses. Further, regular accounting aids in early detection of frauds.
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Aids in Audits:
The business will be able to submit the audited financials to the authorities in a considerably shorter span when it is called for. Further, accounting is the basis on which financials will be drawn for the audits. Proper accounting will help businesses obtain a clean audit report, which increases their creditworthiness. When considering whether to outsource or hire in-house, explore the benefits of outsourcing accounting to make an informed decision.
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Investor confidence:
Maintaining proper accounting helps the investor track the return on investment and the ability to generate profits. These will determine the long-term viability and growth of the business. Therefore, regular and clear communication builds investor confidence, which may attract more capital.
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Obtaining Loans from financial institutions:
Many financial institutions require comprehensive financial data before providing loans. Proper accounting boosts credibility and helps in securing loans.
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Fosters Growth:
Accounting not only showcases the commitment to transparency but also equips the business with key performance indices that, in turn, help the business make important decisions. Further, accounting helps to monitor the financial implications of a decision and provides a warning indication if the decision needs to be revisited.
Further, small expenses add up quickly, affecting the profits of the business. Accounting helps in regulating these expenses and detects areas where costs could be saved, thus increasing the bottom line.
Refer Accounting services for more complete knowledge about accounting solutions catered for all kinds of industries.
Now that we have established the importance of proper accounting, choosing the best accounting firm would be the next step to achieving accuracy in accounting.
We, at BCL Globiz, provide accounting, compliance, and advisory services under one roof at affordable and reasonable pricing that helps the small business. Connect with our experts at punith@bclglobiz.com.
