In-house accounting V/s Outsourced Accounting: Key Insights for UAE Businesses
CEOs and entrepreneurs often choose the traditional method of sticking with in-house professionals when it comes to accounting services in Dubai. Even the startups that boast of a futuristic business idea go for recruiting in-house accountants. However, outsourcing to accounting firms in Dubai is often considered the right step towards smarter financial management.
We have often noted that entrepreneurs of startups and SMEs find it hard to choose between an in-house accountant and accounting firms in Dubai. Even though outsourcing minimises the cost burden for small businesses, entrepreneurs face the dilemma as they are unaware of the benefits of outsourcing. Therefore, read the rest of the blog to understand whether In-house accounting or outsourcing is better for your company.
1. The Cost Benchmark
Cost is the prime concern for SMEs as well as early-stage startups while determining the type of accounting services they require. Hiring an in-house accountant is costly in terms of salary, and added benefits, including health insurance, sick leaves, perks etc. Furthermore, the challenge of finding an accountant with the desired skill set may prove to be tougher for entrepreneurs.
If cost is the most significant benchmark for determining the desired mode of accounting services in Dubai, outsourcing wins the war against in-house hiring. You don’t need to pay a fortune to outsource the best accounting services in Dubai. All the accounting firms in Dubai charge only for the specific services they provide, which will help startups reduce their expenses significantly.
2. Assurance on Quality of Services
SME owners recruit in-house accountants thinking that their services would be available readily. The business owners can meet them personally inside the office and get things done fast. However, the quality of services provided by the accountant may vary depending upon his or her experience and skills. If your accountant is not competent enough, your organisation is bound to suffer.
On the contrary, when you outsource your accounting services in Dubai, a team of highly qualified professionals will be looking after the books of accounts of the company. The best accounting & bookkeeping firms in Dubai are composed of experts with sufficient knowledge, skills, experience, and a keen eye for detail. The quality of the company’s accounting system will improve once you get access to a team of talented professionals.
3. Service Delivered Beyond Working Hours
An in-house accountant is your employee, and such a professional’s availability is limited to the working hours mentioned in the employment contract. Even if he or she is the best accountant in the world, ultimately it’s a 9 to 6 job. In case you need to meet any urgent accounting requirement, you have to wait till the next day.
As opposed to this, the service of outsourced accounting firms in Dubai can be availed beyond the typical working hours if you require. Outsourcing has proven to be viable for businesses that work beyond normal hours such as restaurants, web-based service providers, cinemas, e-commerce firms etc.
4. Minimising the Risk of Fraud
When your accounting is handled by one or two employees, the internal controls within the organisation will be weak. You will be facing a higher risk of fraud when a single employee is handling the accounting of the entire company. The risk of fraud increases if the same person is paying the bills and reconciling bank accounts. The employee can commit fraud and easily cover it if there is no separation of duties.
Separation of duties is where outsourcing differs from in-house accounting. Accounting and bookkeeping firms in Dubai exercise rigorous checks while providing financial statements for the companies. In most accounting companies in Dubai, at least two sets of people will be reviewing each step. To make the scrutiny stringer, accounting companies employ different levels of staff on a single account. One employee will review the work done by the other to make sure there are no discrepancies or errors.
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5. Accuracy of Financial Reporting
In-house bookkeepers or accountants can provide reports for your business. However, the accuracy of such month-end reports depends upon the qualification, training, and skill set of the employee. What happens in most startups is that the accounting professional will be taking care of other responsibilities, such as human resources.
In such cases, the accountant fails to focus on his or her core duty of accounting. Inaccurate reports might dent the business as it is vital to the cash flow and decision-making process. By outsourcing to the best accounting firms in Dubai, you can eliminate the risk of late or inaccurate financial reporting. Further, if your accountant is busy in multiple roles, you can outsource only the reporting duties to accounting companies in Dubai.
6. One-stop Solution for All Services
Unlike in the past, the compliance requirement in the UAE has grown manifold as the government is looking to streamline the economy as per global standards. The role and duties of accountants have increased with the introduction of VAT, Anti-Money Laundering Law (AML), Ultimate Beneficial Ownership (UBO) and Economic Substance Regulation (ESR). An in-house accountant will not be competent enough to successfully manage such compliance requirements.
Prominent accounting companies in Dubai are equipped with adequate resources to help you comply with VAT, AML, UBO and ESR requirements. By outsourcing to such firms, you need not worry about the filing or reporting requirements for the regulations. The accounting & bookkeeping companies will also provide training to your employees on VAT, AML & ESR.
In-house Accounting or Outsourcing? Make the Right Choice
Choosing the right kind of accounting services in Dubai depends upon the type of support your company needs the most. The accounting requirements of each company vary depending on factors including the size of the business. SMEs and Startups that focus on reducing cost, enhance the accuracy of reporting, and minimise fraud risk are advised to outsource their requirements to the best accounting firms in Dubai.
If you want to outsource to the best accounting & booking companies in Dubai, look no further than Jitendra Chartered Accountants (JCA). We have served thousands of companies and entrepreneurs by providing robust accounting and bookkeeping solutions. Our team of Chartered Accountants in Dubai are highly qualified enough to make your financial reports proper and accurate. Hire the services of JCA to ensure you are following the best accounting practices.