Navigate These Accounting Challenges to Run a Successful Business in Dubai
Small businesses in Dubai encounter a wide range of challenges every day and the accounting process accounts for a major share of such challenges. Entrepreneurs don several hats for their small businesses such as marketing their brand, hiring the right employees, attracting investors, and establishing a proper relationship with potential customers. Multi-tasking entrepreneurs may find it challenging to properly Keep track of profits and manage business accounting. Business owners who rely on accounting & bookkeeping firms in Dubai can navigate the challenges easily.
However, entrepreneurs need to be aware of certain challenges they are likely to face while trying to keep their small businesses on the growth track. Even if accounting is not your passion, you must keep your books of accounts organised. Maintaining books of accounts is not only essential for regulatory compliance but also for understanding how profitable your business is. If you are unaware of the challenges, the road ahead would be bumpy for your small business. That’s why we have listed here the top accounting challenges you must navigate in 2022 to say on top of your finances:
Managing Cash Flow
Most small businesses fumble when it comes to managing the cash flow. Previous studies have shown that over 80% of small businesses fail due to the poor management of cash flow. SMEs find it tough to allocate funds to cover recurring costs and keep their business alive.
Accounting firms in Dubai advise you to carefully analyse the bills and strictly chase payments from customers to navigate the cash flow challenge. Apart from that, it is critical to strictly focus on your monthly expenses and cut costs wherever possible. For instance, a company with a cash flow issue can sell equipment that they no longer use. It can also help them quickly generate cash.
Filing of Tax Returns
Even though the UAE is known as a tax-free country, businesses fall within the scope of Value Added Tax (VAT) at 5%. SMEs need to carefully assess and manage their VAT obligations as per the UAE VAT Law. Taxable businesses are required to comply with obligations such as VAT accounting, VAT registration, timely VAT return filing, VAT deregistration etc.
Failing to comply with the obligations related to VAT in the UAE will lead to hefty penalties and reputation damage. Entrepreneurs also need to keep abreast of the amendments and updates happening to the UAE VAT Law and standard procedures to ensure compliance. Accounting firms in Dubai can help you to manage your tax obligations efficiently.
Ensuring Regulatory Compliance
The reporting burden on UAE companies has increased since the introduction of VAT in 2018. From then on, a series of new regulations and reporting requirements have been rolled out by the Federal government to streamline the UAE economy in line with global standards. Yes, we are talking about the regulations such as Anti-money Laundering and Combatting Financing of Terrorism (AML- CFT), Economic Substance Regulations (ESR) and Ultimate Beneficial Ownership (UBO) laws.
You must first assess how your company can comply with these regulations and avoid the hefty penalties. All these regulations mandate the companies under obligation to maintain proper documents and file reports/notifications to ensure compliance. Even companies undergoing liquidation are required to maintain records as per the UBO & ESR laws. Only the best accounting firms in Dubai can help you navigate the challenges of regulatory compliance.
Managing payroll continues to be a challenge in 2022, especially for companies lacking a big accounting team. Being a payroll expert can be a tough task for your in-house accounting professional who is also entrusted with other accounting functions. Since the UAE follows the Wage Protection System (WPS), improperly handling the payroll accounting may lead to hefty penalties. Outsourcing to accounting firms in Dubai will help you overcome payroll challenges such as classifying new employees, ensuring employees are paid on time every month, properly tracking employee time off and dealing with a wide range of compliance issues.
Analysing your Finances
Reconciling the books is not an easy task for most SMEs, especially those businesses without robust accounting software. Such businesses may find it easy to make errors that may lead to incorrect data. That’s why it’s crucial to verify all the business transactions at least every month. You can also make it a habit to verify your books of accounts at the end of each day while the transactions remain fresh on your mind. If you find it tiring, entrust the job with the best accounting & bookkeeping firms in Dubai.
Navigate the Challenges with Jitendra Chartered Accountants
Overcoming the accounting & bookkeeping challenges must be your top goal for 2022 to ensure continued business growth. SMEs without a large account team may find it tough to bust these challenges, but accounting firms in Dubai such as Jitendra Chartered Accountants (JCA) can help them.
JCA’s highly qualified accountants help the small businesses to accurately maintain the records apart from providing services such as payroll, VAT return filing, etc. We also help the companies efficiently meet the requirements including ESR, AML / CFT, UBO, etc. Consult with JCA’s accountants to run the business in the UAE without any hassle.