Key Bookkeeping Basics for Small Businesses in Dubai

Small business owners and startup entrepreneurs across the world are masters at creating innovative products, delivering unique services, building effective teams, and winning over customers. However, a great majority of them are far behind when it comes to the basics of bookkeeping. Most small business owners think that profit is what matters the most in a business.

However, they should realise that profit is secondary and cash flow is the most critical element of a business. Availing of effective accounting & bookkeeping services in Dubai helps you keep the books up-to-date and manage your cash flow effectively. In this article, we will walk you through the basics of bookkeeping every small business owner must know. Read on to understand certain basic aspects of bookkeeping that may keep your business strong:

Keep personal and business finances separate

Mixing personal and business expenses may create huge headaches for business owners. Set up a business bank account right from the get-go to keep personal and business expenses separate. Opening a business bank account in the UAE can help you stick to your business budget, organize accounting records and keep your business finances in order. If you are unaware of the importance of this aspect, consult with the best accounting & bookkeeping firms in Dubai.

Keep thorough records

Mixing personal and business expenses are a headache but cluttered records are going to give you even bigger headaches. If your records are neatly organised, you can understand exactly what is stored where. Neatly organised books can save you a lot of valuable time. If you are busy and approaching tax deadlines, you will be grateful to yourself for taking the time to keep your records organised. It is advisable to keep both paper and online versions of your records so that you will have a backup in case any accounting information is destroyed, misplaced, or lost.

Faithfully track your expenses

SMEs may find it hard to anticipate certain expenses. You should understand that some expenses can be forecasted and others will come unexpectedly. However, if you have a solid plan to deal with the unexpected, you can be better off in the long run. You need to keep a thorough record of all your expenses including supplies, inventory, insurance, and utilities. You need to etch out a solid plan on how to handle unforeseen expenses. In this way, you will be in a better position to predict larger expenses and not be caught off guard in the future.

Set reminders for deadlines

Entrepreneurs are busy people who may easily lose track of some of their obligations and miss deadlines. SMEs can never afford to miss deadlines as it may lead to hefty penalties from the authorities. Always set reminders to avoid missing the deadlines of tax returns and other regulatory requirements. You must include tax return filing dates and other deadlines in your calendar so that you may not miss the due dates. It is advisable to use a digital calendar to keep track of important dates and set reminders. In this way, you can pay your tax liabilities on time and avoid deadline-related penalties.

Stay on Top of Your Accounts Receivables

Late-paying customers can be the biggest nightmare of SMEs and startups as they can seriously impact your business’s cash flow. You need to ensure that you pay attention when your receivables are due and act right away when they’re overdue. Try to come up with a plan so that you can get the money you are owed as soon as possible. The longer you leave it, the longer it can damage your company’s cash flow.

Automate as much as possible

No one can contest the fact that automation can be a lifesaver for small business owners. The more you automate the more time you will get for your business. You can streamline your accounting requirements by automating your accounting process with robust accounting software. Reliable software can save you from the limitations of spreadsheets and manual crunching of numbers. Consult with accounting and bookkeeping companies in Dubai before purchasing software.

Leave an audit trail

If you leave an audit trail, you can easily retrace your steps in accounting. An audit trail can be defined as a set of documents that back up the transactions you record in your books. With an audit trail, you can track down the transactions and verify if they are correct or not. Audit trail documents can include purchase orders, invoices, estimates etc. It will help you prevent fraud, enhance accuracy, and find missing transactions.

Hire Best Accounting & Bookkeeping Firms in Dubai

It will be insanely boring for an entrepreneur to get all the records done alone. Moreover, the risk of compliance failure is high when you try to manage the bookkeeping tasks on your own. Appointing an accounting professional is not a cost-effective option and an in-house employee can’t guarantee the quality and accuracy that your business needs. In such a scenario, you can hire the best accounting & bookkeeping firms in Dubai such as Jitendra Chartered Accountants (JCA).

JCA has been providing reliable accounting & bookkeeping services in Dubai for more than 21 years. Apart from accounting & bookkeeping, we provide critical services related to audit, Value Added Tax (VAT), corporate tax, Economic Substance Regulations (ESR), Anti-Money Laundering and Combatting the Financing of Terrorism (AML-CFT), Ultimate Beneficial Ownership (UBO) etc. Hire us to stay on top of your finances.