Key Considerations for Year-end Accounting For Your SME
The end of the financial year is a hectic time for business owners across the world, including in Dubai. Most entrepreneurs will be juggling end-of-year accounting procedures to ensure a smooth financial transition for their businesses. Accounting firms in Dubai advise business owners to create a year-end accounting checklist to wrap up the financial year more efficiently.
A year-end accounting checklist is essential to tidy up the accounting tasks and make them more organized and efficient for future use. A checklist for year-end accounting procedures will give you a head start to make your year-end a successful one. Your checklist should include the following:
Get the documents ready for your accountant
You might be working with accounting companies in Dubai or using any accounting software to ensure a smooth accounting process. However, it doesn’t relieve you of the critical need to prepare all the required documents before the year-end. The following are some of the key documents you must prepare for your accountant:
- Cash records
- Bank and credit card statements
- Loan information
- Sales records
- Payroll information
Review accounts payable and receivable
Before the year nears its end, business owners should review their accounts receivable and payable. A review will ensure that you settle collection and debts without any penalty. If there is any unpaid invoice, ask them to settle before the deadline. You should also check your accounts receivable aging report to see if there is any unpaid invoice or not.
Collect past-due invoices
If wrapping up your books before the year-end is your objective, collect the money that customers owe to your company. You may need to put in some legwork to collect past-due invoices before the year-end. With some customers, only a gentle nudge or a reminder will suffice. However, others who are reluctant to pay might require a different strategy comprising the following:
- Set up invoice payment terms
- Document the payment process
- Contact customers with past-due invoices
- Establish a payment plan with customers
Plan your tax properly
Even though the UAE has long been a tax-free country, the introduction of Value Added Tax (VAT) and Corporate Tax has changed the entire script. Now, businesses in the UAE need to do extensive tax planning, which may involve the analysis and planning of your company’s financial position which will allow you to pay the lowest amount of tax possible while complying with the relevant laws.
Taxes can impact your annual earnings and tax planning is a great way to minimise your liabilities in a financial year. Carrying out a tax plan will help you leverage tax deductions or exemptions in a fruitful manner that will benefit your company’s interests. Avail of accounting services in Dubai to plan your taxes effectively before the year-end.
Analyze financial statements
Preparing and analysing financial statements is one of the most critical aspects of all businesses irrespective of the size of the company. Financial statements will help you review your past and present transactions and help you forecast the business’ financial future. Analysing financial statements at the end of the year will help you plan for the new year with more confidence. Financial statements such as income statements, balance sheets, and cash flow statements can help the management team as well as shareholders and investors analyse the year-end better.
Take a backup of important information
Businesses need to keep a backup of all of their accounting data for future reference. You need to implement a reliable backup system to protect your key accounting information. Cloud backup can also be useful when it comes to sending a copy of your backed-up data to another location in case the system is compromised. A cloud-based backup system will also help you restore information and get protected against cyberattacks or other disasters. Accounting firms in Dubai can advise you on choosing the right software for this purpose.
Reconcile bank accounts and credit cards
When it comes to year-end accounting checklists, you can’t afford to forget the reconciliation of bank accounts and credit cards. You need to compare your bank account statement with accounting records to verify the business spending. This should match the balance recorded in the log books. If you detect any discrepancies, check them again and make the necessary adjustments to settle the records.
Set smart business goals
Before the new financial year commences, you must set smart business goals with the help of your accounting team. Setting goals will help your team stay motivated and focus on the set goals. The goals should be realistic and attainable within the realm of possibility. Accounting companies in Dubai can advise you on setting realistic financial goals.
Consult with the Best Accounting & Bookkeeping Firms in Dubai
A year-end accounting checklist can help you organise the way you end a financial year and prevent you from scrambling (or forgetting) to get your year-end processes complete. The year-end could be a hectic time for business owners but accounting firms in Dubai such as Jitendra Chartered Accountants (JCA) can help you out with proper financial advice.
JCA is one of the leading accounting & bookkeeping companies in Dubai with more than 21 years of experience. We can help you out with tax planning, audit and other regulatory requirements including Anti-Money Laundering (AML), Ultimate Beneficial Ownership (UBO) and Economic Substance Regulations (ESR). Contact us today to get hold of the best accounting & bookkeeping solutions.