Every firm understands the importance of accounting for the smooth functioning of a business. Calculated steps based on the money available and annual turnover decide the future of an entity. In-house accounting teams and outsourced agencies have an important role to play for maintaining the accounting data, transaction records, budgetary info, and financial statistics.
When it comes to business hubs like Dubai, Abu Dhabi etc, you can find a lot of accounting firms aimed at providing high-end accounting services. Successful accounting could be ensured by pursuing certain steps. The said steps are elaborated in the succeeding paragraphs.
Segregation of Documents and Certificates
Being a commercial hub, Dubai hosts a large number of businesses. Quality assurance and audit services help to achieve their business objectives and help to improve their business performance. The governmental agencies, including the Federal Tax Agency, can seek documents, transaction receipts, bills, and certificates during an audit. Therefore, the accounting team should maintain the subject documents in a properly arranged manner. To produce the same when sought by the authority. Every data has to be entered in the ledgers properly.
Besides, the authority may not ask for the license documents, trade certificates, and associated paperwork periodically. However, those must be held safe until the time the company is in operation. Further, the renewal of the approvals is also mandatory in stipulated periodicity.
Type of Accounting Method
There are two types of accounting methods followed by business firms, Cash Accounting and Accrual Accounting.
Accrual Accounting – In accrual accounting the income, expenditure, profit, and loss is reflected as and when it occurs, without waiting for physical receipt or debit of cash. It will be tallied at a later stage when transactions occur practically. This enables the firm to identify the exact period of occurrence of a particular transaction or finalization of a deal.
Cash Method – As the name indicates, the cash method follows the receipt or deduction of cash physically from accounts. The transaction will be registered in the relevant registers in the period it happens physically.
Maintaining of Documents
You or your accounting team must incorporate adequate measures to maintain the documents perfectly. Ledgers, registers, and files must be opened for each type of transaction. Thereby, you have a clear picture of the financial status of the company as and when required.
The accounting team of your company can either derive a method for organizing the documents or search for established methods followed by other firms. In addition, you can consult professional accounting firms for guidance and support on this.
What and How the Financial Data must be Recorded
This step necessitates the accounting team to be efficient. They must finalize where and how the transactions and physical receipts are recorded. It must be in such a way that the financial statistics, including money held in bank and as cash in hand, is available in short notice, and without any ambiguity.
Improper recording of financial data can make it ambiguous. Thus leading to confusion and complications. By following one of the methods described below, you can prevent such a situation.
- Recruit well-qualified accounting professionals
- Train the in-house accounting team according to the requirement
- Outsource the accounting tasks to a professional agency
No Personal Expenses from Business Account
You must have a separate personal account. Never spend money from the business account. Using a personal account for all your individual requirements will be helpful in identifying the total expenditure towards the business easily.
Every expense, both personal and business, will be considered as a business expense if you have only one account for both the purposes. Lack of exact info can lead you in troubles and can be perilous for your business.
Use an Advanced Accounting Software
Although your team may require additional training for using accounting software, it is a good option to get one. You can consult accounting firms for the provision of custom-tailored accounting software. With advanced features integrated, the accounting software will be of great help.
The accounting software will have advanced features for reminding you of periodic submissions, tax filings, and many more. Leveraging technology, you can enhance the efficiency of your team.
Hire a Professional Accounting Service
Outsourcing your accounting activities is one of the best methods. The professional agencies will have exhaustive experience and expertise in the field. They will customize impeccable accounting methods for your organization. Since they will be handling your accounting data, you can concentrate fully on business. Thus enhancing your efficiency.
The professional accounting firms will be knowledgeable about the latest developments in the field of accounting. And will be current with the constantly changing governmental regulations. They will implement the said directives without any delay and educate your accounting team about it. The service will be cost-effective and efficient. Hence, it will be a win-win situation for you. When it comes to business hubs in countries like Dubai, you need to be more vigilant. Choosing the accounting and audit firm in Dubai is a must to keep your business finance intact and get away from fraud players.
Accounting is the mainstay in every business. Money is the fuel for the smooth functioning of every organization. Therefore, every penny spent and received has to be accounted for. Exact info about the money held would help you in planning for future developments and considering expansions.
Decide the accounting methodology that can aid in progressing your business. A calculated and well-thought-out decision will be significant in changing the future of your business.