No business environment in the world can be compared to the one that thrives in the UAE. It is a true haven for an ambitious entrepreneur.
However, with these opportunities come primary responsibilities, mostly regarding financial management. Here at AMD Audit, we have observed many small businesses in Dubai and across the Emirates fall into the common pitfalls of accounting.
But do not panic. These mistakes are easily avoidable, given a little bit of knowledge and the presence of the experts at your side. So, let’s look closely at ways to avoid the top 5 accounting mistakes made by small businesses:
Not Separating Business and Personal Finances
It’s tempting, especially in the early days, to treat your business as an extension of yourself. However, sharing financial records with personal expenses is a recipe for economic chaos. Making bookkeeping boring is one thing, but it also spurs some severe penalties toward the Federal Tax Authority, which nobody wants to deal with.
The Fix: Set up a Dedicated Financial Lifeline for your Business
Open up a business checking account and business credit card. It’ll simplify tracking income and expenses, keep your personal and business finances separated, and make everything more transparent to the tax authority.
Pro Tip: Consider a Business Credit Card with Rewards!
Many banks offer business credit cards with rewards programs to help your company. Also, earned points or miles can be redeemed for travel, dollar credit to pay for office supplies, and even cash back. This helps you stretch your resources further.
Forgetting the Importance of Bookkeeping:
Receipts: crammed in a drawer; invoices: lost in the Bermuda Triangle of paperwork. That is not the way to operate a successful business.
According to UAE law, a company must have in place an organized set of financial statements for at least five years. Can you even think of cash flow tracking, accurate tax return filing, or proper business decisions if these records are in a mess?
The Fix: Get Over Yourself and Get Experts Help
Buy a minimal bookkeeping system – software like an easy-to-use QuickBooks or the services of an outsourced professional bookkeeping service provider in UAE such as AMD Audit.
Code your transactions consistently, streamline your receipts through a scanning application, and reconcile those bank statements. Did I say consistently?
Cloud-Based Accounting Solutions
Check into a cloud-based accounting system that you can access anytime. This gives you the power to track cash flow, reporting, and collaborate with your accountant in the cloud even when you are not in your office or country. Most cloud-based solutions have a mobile application.
Misunderstanding VAT (Value Added Tax)
The UAE has imposed VAT in 2018. It has added another layer of management complexity. Miscalculations of paying excessive or inadequate amounts of VAT will impose heavy penalties.
The Fix: Arm Yourself with Knowledge of VAT
Know about the system of VAT in the UAE:
The FTA website has much information and includes guidelines as well as some informative videos. Getting a consultation with a VAT consultant at AMD Audit can be very beneficial. We can also assist you in registering for VAT, ensure you charge the proper rate, and ease the headache of submitting returns.
Dipping Your Toes into DIY Accounting (When You’re in Over Your Head)
One of the hardest things about running your small business is that you must wear so many different hats. When it comes to accounting, trying to wade through things alone can just make for a big mess come tax time. Mistakes in bookkeeping or tax filing can have severe consequences down the line.
What to Do: Outsource for Peace of Mind and Accuracy
Consider the services of a professional accounting firm, such as AMD Audit, for your accounting needs. Our competent accountants will assist you in bookkeeping, tax preparation, and filing, making sure that all the rules and regulations of the UAE are well taken care of, leaving you to focus on what you do best: running the business. When you outsource your accounts to a professional, you are free from errors and their financial consequences.
Time-saving:
Instead of tiring bookkeeping efforts—lengthy and time-consuming—you are set free with logic and basics that gear up growth.
Peace of mind:
When one has an experienced team at their back handling the finances, it frees one up to concentrate on the business’s goals without stress.
Strategic Insights:
Professional accountants can scrutinize your financial data and give beneficial insights that can help you make decisions.
No Plan for the Future (Of Taxes!)
Taxes are certainly a fact of life in the UAE, but any business not planning for them could be taking quite a nasty financial shock. Failing to pay taxes on time can result in penalties and interest charges.
The Fix: Proactive Tax Planning for a Stress-Free Season
Keep Informed:
Be on top of your calendar for upcoming tax deadlines and estimated tax payments—use resources like the FTA website and business publications to keep you informed.
Work with a Tax Professional:
Partner with a professional accounting service firm such as AMD Audit. We can work with you even after the year is over to estimate your tax liability so that you can make appropriate provisions before filing. Planning is the key to successfully and legally reducing your tax liability.
Learn about Tax-Saving Strategies:
AMD Audit offers comprehensive tax planning services to help you reduce your tax liability and increase profits. This allows us to talk about legitimate tax write-offs and credits related to the business activity, for which you can become eligible to ensure that you keep more of your hard-earned money.
Invest in a Long-Term Financial Strategy with AMD Audit
Small businesses in the UAE encounter one crisis after another. It is hard to achieve long-term success and manage finances due to these common mistakes. But AMD Audit is here to be your trusted financial partner. The services are so diverse that they will fulfill your needs.
Accounting And Bookkeeping Services:
Our experienced and knowledgeable team can cater to data entry and account reconciliations. Our goal is to take the burden off your table so you can be focused on the growth.
Bookkeeping Solutions UAE
Our bookkeeping is done, keeping the local laws in mind and to serve the specific needs of businesses in UAE.
Professional Accounting Services Dubai
For the past 10 years, we have been located in Dubai. Our professional accountants have local market experience. We provide a host of services that include preparing financial statements, budgeting, and forecasting, among others, that enable you to make informed business decisions.
Comprehensive Audit Solutions Dubai
Our audit team is in a position to give you comprehensive audits. Through this they are sure of your financial statements’ correctness and eye out risks and suggestions for the betterment.
Audit And Assurance Services Dubai:
At AMD Audit, we present to our clients audit and assurance services. This gives them peace of mind while also increasing the credibility of financial statements for stakeholders.
Benefits of Outsourcing Financial Management To AMD Audit Experts:
You will Save Time and Money:
You save valuable time by outsourcing your accounting needs; these resources can best be utilized to develop your business.
Errors Minimized:
Our team at AMD Audit Experience minimizes the room for mistakes in your financial records. Hence, maintaining the accuracy and compliance with the same.
Sources Valuable Insights:
We analyze your financial data to give you the insight that can help you maximize your financial performance and make strategic business decisions.
Navigate Regulations with Confidence:
Our team is constantly updated with the latest UAE regulations. So, you shall know that your business is compliant.
By partnering with AMD Audit, you get a team entire of dedicated financial professionals who have your success in mind. Contact us today to book an appointment, and let’s discuss how we can help drive your small business to success within the dynamic UAE market.