Accounting and Book-keeping for Trading Company in Dubai
Accounting and Book-keeping for Trading Company in Dubai
How would an ordinary accountant know that a single-owner company is also subject to Ultimate Beneficial Owner declaration? This declaration applies to every organization registered in the UAE mainland and free zones except government-owned entities and financial free zones (Dubai International Financial Centre and Abu Dhabi Global Markets).
And it does not end here. How would you, as a business owner, ensure that your accountant is carefully recording business transactions to ensure VAT compliance? Can you avoid VAT Penalties as a result of incorrect accounting and bookkeeping?
Business growth is always halted due to the time you spend on operations. You’re the expert when it comes to understanding the needs that drive your business, but unless it is a small-scale business, monitoring every function is simply impossible.
Entrepreneurs are highly creative people, who are full of great ideas, but less focused on the day-to-day aspects of the business. They readily acknowledge that even if they can do the work themselves, their valuable time is better spent building the business. To that end, they find experts and then delegate the tasks. One of those tasks is accounting and bookkeeping services.
Companies no longer bother building an in-house accounting staff. They would invest their time in building their business rather than building an army of accountants.
AaaS (Accounting as a Service) is a unique technique used by accounting and bookkeeping companies, such that it eliminates all the overheads including salaries, office space, equipment, supplies, travel expenses, visas, employee gratuities, and so much more. It saves even more money by eliminating sick days, vacation days & pays holidays,s and innumerable other expenses.
There is nothing more important when it comes to the management of finances and accounts for a company. To attain maximum satisfaction from every penny spent on outsourcing services, financial services are required to get divided into different packages. This provides broad classes of service optimization, which can be based on how much you wish to spend.
The divided packages are as follows;
1. Package 1: Cloud-based Accounting
They are widely used by SMEs and freelancers. Financial information can be viewed from anywhere around the world with internet access. You can e-mail, courier, or even use ordinary mail for sending the documents to us and our accountants will update your books online. The electronic collection is by far the easiest, fastest, and most economical method.
2. Package 2: Onsite Accountant
If the company requires all the work to be completed on its premises, then the accountant will visit their office and compile the financial information. This service is useful for mid to large-sized companies.
3. Package 3: Back office Financial Support
One of the widely used options is Back Office support. This package is trendy due to its affordability and access to the best talent at a fraction of the cost.
4. Package 4: Project Accounting
A project accountant works specifically on a given project e.g., bank reconciliation, financial data migration, retrospective accounting, or general accounting for a specific number of data, etc.
5. Package 5: Receivables & Payables Management
Accounts receivables management and accounts payables management are not uncommon among large organizations. The following are covered in such an assignment:
● 3-way verification of purchase/sales invoices (Quote > PO >Invoice) before recording them in the accounting software.
● VAT compliance.
● Pay supplier invoices only when due and chase customer receivables before due dates to ensure business cash flow is managed properly.
● Pushing overdue receivables to debt collectors and further to the legal.
● Debtors' and creditors' status report to management.
6. Package 6: Account Reconciliation Assignments
Reconciliation is a common problem in big organizations due to the massive volume of transactions. The following are covered in account reconciliation services:
● Bank/Cash reconciliation
● Stock reconciliation
● Debtors and/or Creditors reconciliation
7. Package 7: Accounting Review
Accounts are prepared by the company’s in-house finance team and then reviewed by expert accountants. A rigorous review of books ensures that financial data is accurate, complete, and reliable for decision-making.
Accounting and Book-keeping Services for Trading Companies
Trading Industry is one of the most vital components of the UAE’s economy. For decades trading has contributed favorably, not only to the business environment but to the community at large. Being owners of a trading business is a fascinating endeavor but keeping track of all that financing can be fairly exhausting!
In this era of increasing competition, challenging economic conditions, and highly intense cost pressures, managing that immense volume of business- responsibility and keeping in line, all your accounts can spin your head easily. Your growing business, demands complex accounting issues if not resolved timely can lead to the following:
⮚ Loss of all your valuable clients.
⮚ Loss of assets and time.
⮚ Loss of that hard-earned reputation.
⮚ And even force towards a permanent SHUT-DOWN.
Why A Trading Company Should Outsource Its Accounting?
You own a trading business because you’re probably an expert at it, BUT what about all those tough accounting and financial problems? It’s very common for traders to get into a huge mess with their paperwork. And then get into even bigger problems trying to get them straight.
It requires experts to either supervise or take over its finance department to produce accurate, complete, and reliable financial information. It’s essential to have good management reports and clear year-end results, which are the foundation of any prosperous trading business. This will enable the company to see exactly:
✔ Where business is spending the money,
✔ Where the revenue is coming from,
✔ Which tax deductions they’ll be able to claim,
✔ How to tackle tough market competition,
✔ Areas of opportunities and
✔ How to avoid instances of risk.
Highly trained accountants will also help the trading company to effectively manage its:
● Business cash flows.
● Inventory management.
● Trading capital management.
● Foreign investments.
● Financial projections.
● Feasibility studies.
● Mergers and acquisitions.
● Business valuations.
Why Outsourcing is Becoming a Normal Practice for CPA Firms?
Bookkeeping is a significant cost for most CPA firms. This resource-hungry task is often outsourced by audit firms to reduce their costs. By outsourcing bookkeeping, CPA firms can save money and utilize expensive human resources on high-value projects.
Audit and accounting firm business is very lucrative in almost every country. A lot of SMEs normally outsource their accounting, tax returns, and related financial management tasks to accounting firms as financial mismanagement can quickly send a business spiraling down toward insolvency.
This outsourcing normally takes place at a low to moderate fee. Although the fee is normally not high at the same time CPA firms do not want to miss this opportunity as Amazon and Ali Baba were also small when they started. Therefore, CPA firms normally outsource accounting, tax preparation, financial statements preparation, and other similar assignments.
The decision to outsource your bookkeeping can help avoid a lot of problems. A reputable bookkeeping service provider can do the following for you:
✔ They can help ensure that as your business scales, your financial privacy remains unharmed. By hiring more in-house personnel to maintain your records, you expose sensitive information to people who you cannot trust. Bookkeeping service providers can be trusted with your privacy because their reputation depends on it.
✔ Outsourcing lets you scale your business without having to worry about scaling your financial management capabilities as well. You can continue to grow your business with peace of mind, knowing that your finances are being handled by people who have the resources needed to meet your requirements.
✔ Reputable financial service providers are always up-to-date with the latest financial trends and practices. This means that when they manage your financial recording, they do so while observing the latest requirements.
What to Expect While Outsourcing Accounting to a Financial Services Agency?
Financial services agencies can help you out with a variety of book-keeping-related activities such as below:
⮚ CPA Write-ups: Write-ups are incredibly important for any business’s financial process. When done properly, write-ups can help keep your accounting process transparent.
⮚ Preparation of Financial Statements: Financial statements are important since they record a business’s performance. The bigger your business is, the more complex the financial statement preparation can get. Outsourcing your bookkeeping can help you maintain accurate financial statements without having to make an extra effort.
⮚ Preparation of CPA Income Tax: Income tax preparation is tedious and complicated. Making a mistake in your tax returns can result in legal trouble as well. Tax returns are one of the most frequently outsourced financial activities out there. This is because businesses can free up resources by off-loading tax returns to someone else.
⮚ Preparation of CPA Sales and Use Tax: Enlisting a financial service agency’s service can help you handle large amounts of returns without wasting too many resources. It allows you to operate more efficiently.
⮚ General Book-keeping: For businesses that don’t have the resources needed to manage their bookkeeping, financial service agencies can be of help. It can choose to either outsource parts of your bookkeeping activities or the entire process itself.
⮚ Accounting Services: Your business’s growth and accounting needs will always remain closely tied to one another. This is why many businesses find it challenging to upscale their accounting capabilities as they grow quickly.
Digitization has made accounting and bookkeeping for trading companies easier. Businesses can safely share sensitive documents with third parties that have the capabilities to process them more efficiently. By outsourcing their bookkeeping and accounting activities, businesses can save money and resources while not having to compromise on accuracy and the overall quality of their financial activities.
Why Banks are Outsourcing Their Accounting & Book-keeping?
Modern-day banks have to rely quite heavily on software solutions to keep their systems running smoothly. Without outside help, banks have to dedicate a lot of resources to this process. This is why so many banks have started outsourcing their accounting and bookkeeping to third parties.
Banks need secure servers where they maintain records of their accounting-related data. Since this data is a core element of any bank’s day-to-day operations, it is important that banks can access this data at all times. Outsourcing the management of this data to a third party allows banks to focus on other aspects of their operations.
Modern-day bookkeeping is largely digital. There are 3 types of bookkeeping solutions that banks can choose from when they outsource their bookkeeping and accounting:
⮚ Server-Based Bookkeeping: Documents are scanned and sent by its staff over the Internet. A secure FTP server is used to store these documents for ensuring data security.
⮚ Remote Access Bookkeeping: Instead of sending documents, banks can grant remote access to their systems. Remote access bookkeeping offers more security since sensitive information isn’t being sent back and forth over the internet. This option is ideal for banks that maintain their data servers.
⮚ ASP (Application Service Provider) Bookkeeping: Banks that use online accounting software can also get their accounts updated by giving dedicated login credentials which allow updating the books. The documents can be directly shared through the platform.
Why should a company outsource its Project Accounting?
Businesses outsource their accounting-related activities for two main reasons:
✔ Lowering costs.
✔ Improving their accounting and bookkeeping capabilities.
Normally, you cannot get both of these reasons at the same time. But the ability to outsource your business activities to third-party professionals has made this possible. With your project accounting being managed by someone else, you can focus more on actually working on your project.
You can lower costs and free resources that can be invested in other areas of your project. You will also have peace of mind knowing that your accounting capabilities are more than capable of managing the finances of your projects.
By off-loading your financial management to an accounting firm, you can have a much better idea of the revenue and expenses of your projects. This information will help you make better decisions regarding your overall project management. When it comes to project management, every project that your business undertakes is a huge responsibility.
You have to deal with huge sums of money and a very huge payout as well. It’s crucial to make sure that your accounting capabilities are good enough to manage large cash flows. Financial mismanagement can reduce your profit margin and even ruin your relationship with your client.
It’s important to select a great firm for accounting and bookkeeping services for trading companies so that it can handle small as well as large scaled businesses. With the right accounting company helping you out, you can benefit in the short run as well as in the long run.
Benefits of Outsourcing Your Project Accounting
Outsourcing your project accounting can help you;
✔ Maintain better control over the project’s workflow.
✔ Make use of all available resources more effectively.
✔ Maintain an accurate and well-defined billing process.
✔ Reduce your expenses and also save time.
✔ Streamline your overall project management.
Having a good financial agency by your side can make project management more lucrative for you. You need a firm that is reliable, and credible, and also makes an effort to understand its client’s needs. The firms with such traits will not only streamline your existing project management capabilities for you but also help you improve them.
Conclusion
Focusing on creating trading techniques for keeping accounting records or dealing with reliable accountants is very important. The best approach is to delegate that difficult but crucial task to a specialized team. There is nothing more important when it comes to the management of finances and accounts than selecting a great firm for accounting and bookkeeping for trading companies.
