Books of Accounts
All Businesses Establishments and Taxable entities who have registered for VAT in UAE has to maintain proper books of accounts by recording their day to day business transactions in order to track the result of their operations.
As VAT is implemented in UAE from 1st January 2018 there is no chance that you can escape without maintaining your books of accounts for VAT purposes as well. As per the UAE VAT Law, your books of accounts should be kept for a minimum period of Five Years.
Are there any mandatory requirements to maintain books of accounts for businesses in the UAE?
Auditing of Accounts is mandatory for some forms of entities in the Free Zone like the Free Zone Companies (FZCO) and Free Zone Establishments (FZE), for the branch of local and foreign company. In order to finalize the audit, it is obvious that the accounting records and documents must be available and well maintained. In THE UAE, it is a general requirement for businesses is to maintain their records for no less than five years.
The Commercial Companies Law states that the Audit of Accounts is necessary for all companies in the mainland. Generally, though the law stipulates the preparation of the audit report, the submission of the same is not enforced by the authorities and hence many organizations do not follow the same.
Some free zones, particularly in the northern emirates do not require the submission of audited accounts for certain companies; one needs to bear in mind that this waiver is only for the submission of the audit report to the authorities however the preparation of audit report for the entity itself cannot be overlooked.
The maintenance of accounting records will become more important for nearly all kind of entities in UAE as per Article 78 of VAT Law 2018 and Article 71 & 72 in Executive Regulation. Companies have generally a time period between 3 to 6 months after the close of their financial year/period to complete the audit report and submit to the Authority.
Maintenance of accounting records and audit of same also assists the management to understand the performance of the company and areas which need more attention.
How can you benefit by maintaining proper books of accounts for your business?
To know about the company’s performance, you must record all the transaction in accounting software. You can opt for any accounting software based on your requirements and it is readily available in the market.
For example, if you are a trading company it is better to buy the software which is integrated with the inventory. Inventory management will play a vital role as far as a trading company is concerned. You can check your inventory level at any point in time. It will help you monitor the inventory leakage, Stock levels etc.
The accounting software will support you with product costing, project costing, inventory management, Accounts receivable Ageing, Accounts Payable Ageing etc. It will automatically generate the Profit & Loss Account, Balance Sheet, Cash Flow statements etc.
With the support of the software team, you can customize the software based on KPIs and it will help for the MIS Reporting.
What are the areas that you should concentrate on while maintaining your books of accounts?
The Accountant or the Person in charge for the accounts department must know the basic accounting principles, Accounting policies and procedure, IFRS and the local laws with regard to that particular industry / Company.
For example, in the case of the construction industry, the owner may need information about a particular project. So, the accountant must enter the data based on project accounting. He must maintain WIP Control Account to know the status of Invoicing and the project progress.
He should account material related to that project, Labour Salary, etc to that particular project through project accounting. He should know pre- costing and post costing techniques to identify the variances etc. He should find it in advance before it slipped off from our budget.
So, the maintenance of your books of accounts is not a simple task. You require a good accountant with sound knowledge. Then only it will help you to manage the company without any issue. Maybe your supplier/customer may ask the SOA then you have to provide it.
Maybe your banker may ask some information related to the company then you should be in a position to provide it. To monitor the bank balance and to do the Bank reconciliation you have to maintain proper books of accounts.
How can Emirates Chartered Accountants Group support you by maintaining your books of Accounts?
Emirates Chartered Accountants Group provides 360 Degree services related to your business. Starting from Company Incorporation in UAE we provide all the services which is related to your business. We provide Accounts Outsourcing, External Auditing, Internal Auditing, Business Valuation, Due Diligence, Tax Services, CFO Services etc.
Regarding Accounting Services in the UAE, we have Qualified / Semi Qualified Accountants who will visit the client’s office based on the scope of the assignment. Our Accountants shall do the accounting updating and will submit the MIS Report at the end of every month/quarter.
Since, we house a full team of professionals - all your queries related to your business shall be attended on time. If you are looking for some feasible means of updating your accounts work, we shall provide our online updating services from our back-office in India.
For this kind of service, the client has to provide all the supporting evidence and information to our executives and your books of accounts shall be updated. We shall provide all the necessary support locally to the client in UAE as and when it is required.
We also provide customization in QuickBooks Software based on client’s requirements also. To mention we have Customized QuickBooks for Manufacturing, Contracting, Trading Companies etc.
Our Accounting Services are:
For Accounting & Bookkeeping Services in The UAE
Mr. Praveen
praveen@emiratesca.com
+971 – 508873115
+971-4-2500290
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