When deciding to form a company in the United Arab Emirates, there are several aspects that you need to take care of, for example, clearing of documents and accounting. Every successful company requires certain processes to maintain order and legality, these processes can be bookkeeping, auditing, and tax preparation, among others.
In this article you will find information about the role of accounting in business planning, why your company needs to hire this kind of service, what benefits and advantages you can acquire by performing accounting services, and how we can help you with this type of service for your company.
- What is accounting in Dubai?
- Principal areas of accounting
- What is the role of accounting in business planning?
- Golden rules of accounting
- Benefits of an accounting service
- What are the advantages of hiring an accounting service during the business planning service?
- Why does your company need an accounting service?
- How can we help you with the accounting services of your company?
1. What is accounting in Dubai?
The process is based on the documentation, authentication, recognition, and construction of the information necessary for the order of the company and its operation according to the laws of the United Arab Emirates.
In Dubai, a good accounting service, like the offered at Connect Zone, will be in charge of disclosing the profits and losses in a specific period, will carry out internal audits, will analyze the monetary information of the management, will keep the financial records of the company, and will be in charge of analyzing the value of the company’s assets.
This type of service is of the utmost importance for the financial stability of any company.
2. Principal areas of accounting
This process is generally perceived as a recording of business transactions. However, this type of service takes care of many more aspects of your company. Some of these are the following:
This aspect is responsible for handling investigations for fraud, court and litigation cases, claims, and dispute resolution, among others.
This aspect includes the classification of business transactions and the presentation and preparation of internal and external customer financial statements.
Internal auditing refers to the analysis of situations related to business practices and their risks. While external auditing refers to the analysis of financial records, according to a third party.
This aspect is responsible for the management of certain accounts by people of power with the supervision of the company for the benefit of another person. Some examples are the following, receivership, trust accounting, state accounting, etc.
This function is responsible for analyzing and presenting manufacturing costs.Accountants determine the definite and standards cost to help the entrepreneurs to choose a favorable course of action, concerning the operations of the business.
This aspect, as its name implies, is in charge of tax planning, preparation of the tax return, and performs tax advisory services such as the following:
- Ways to reduce taxes legally
- Advice regarding the consequences of the decisions made
- And other tax-related issues.
This function takes as a priority the requirements of the manager. It includes financial analysis, examination of business decisions, forecasting and budgeting, and other similar areas.
2.8 Information system
This aspect is responsible for the expansion, execution, and supervision of procedures and systems.
3. What is the role of accounting in business planning?
This type of service is one of the most important features of any company and is required every day to maintain the organization. In addition to participating in the course of the day, these services are also present in the location and long-term planning of company resources.
A small error in the process can cause great delays and inconveniences in the processes of your company.
Also, it is important to note that although accounting services are responsible for the financial status of a business, they are also necessary when thinking about a business plan and making profitable decisions for the company in the long term.
4. Golden rules of accounting
There are 3 golden rules that work as basic principles to apply to any company. The golden rules of accounting are the following:
4.1 Debit the receiver, credit the giver
This rule applies to personal accounts. When a person grants something to a company, it becomes an inflow and must be credited in the account book. In turn, the receiver needs to be debited.
4.2 Debit what comes in, credit what goes out
This principle is used in the case of real accounts, this type of account includes land and building, machinery, etc. Real accounts have a debit balance by default. Hence when you debit what comes in, you are actually adding money to the existing account balance.
Similarly, when you credit what goes out, you are reducing the account balance when a tangible asset goes out of the company.
4.3 Debit all expenses and losses, credit all incomes and gains
This rule applies in the case of nominal accounts. The capital of the company is a liability, therefore, it has a default credit balance.
When you add all your income and profits, your capital increases. If on the contrary, you decide to debit losses and expenses, your capital will decrease. This is exactly what you need to do to keep the system balanced.
5. Benefits of an accounting service
Maintaining the order and legality of your company using these rules can bring you multiple benefits. Some of these benefits are the following:
5.1 Preparation of financial statements
If the golden rules of accounting are followed to the letter, as a result, all financial transactions will be properly recorded. Tax declarations such as the trading account, profit and loss account, and the balance sheet will be done quickly and efficiently if the process is well done.
5.2 Maintenance of business records
Keeping business records is essential for the success of your company. Performing the required processes will allow you to preserve your business transactions in the correct order and in a safe place.
5.3 Corporate decision making
A process based on the three golden rules will make your financial results reliable and the decision-making process in your company more logical and efficient.
5.4 Comparison of financial results
By following the three golden rules, it will become easier and faster for your company to compare the financial results of one year with those of another year. The analysis of this data year after year is of paramount importance.
5.5 Evidence in legal matters
Using the accounting organization system will allow you to keep the documents organized for quick future reference.
5.6 Budgeting and future projections
A good budget combined with good accounting practice is the perfect foundation for any business, especially if you plan to expand it. Future projections are safer and more reliable with a good organization in place.
5.7 Helps in taxation matters
Bad tax reporting can bring serious sanctions from the UAE government, damaging the image and reputation of your company.
With the proper use of accounting, entrepreneurs can trust that their taxes will always be in accordance with the law of the United Arab Emirates.
5.8 Valuation of business
The proper practice of this process helps improve your company’s brand and reputation. In this way, you can receive new and larger investments, and expand your business.
6. What are the advantages of hiring an accounting service during the business planning service?
This kind of service help companies grow. Some of the advantages that you can acquire during the process of forming your company are the following:
6.1 Provide statistical data about your business
The different functions of this process offer extremely important financial information that allows entrepreneurs to make decisions in a pertinent manner, taking into account the future of the company. It also helps external investors to have a clearer idea of the nature of your business, which increases confidence and therefore investments.
Thus achieving the growth and profits of your company.
6.2 Proper allocation and utilization of resources
This function helps entrepreneurs to know which resources are being used wisely and efficiently, and which are not. In this way, entrepreneurs can make decisions with the optimization of resources in mind.
By doing this, wastage can be minimized and as a result, the company will become more profitable, as costs will be reduced.
6.3 Ensure the following of the compliance requirements
Complying with the laws and regulations of the United Arab Emirates is a priority for every company there. If the compliance requirements are not followed to the letter, the company could have problems with the government of the United Arab Emirates, and could even end up sanctioned.
This is when these services become important since they are in charge of ensuring the correct follow-up of laws and regulations and of protecting companies from certain sanctions.
6.4 Auditing process
The collection of financial information during accounting is of the utmost importance in certain processes, for example, filling for taxes, auditing, among others. If this function is not performed correctly, then none of the aforementioned processes can be carried out at all.
6.5 Preparation of budget
One of the most important things when setting up a company is budget preparation since business decisions in the future will depend on this. Using this function will ensure the prudent use of company resources. This will allow entrepreneurs prepare for any eventuality in the future.
6.6 Future plan for the company
Due to all the advantages already mentioned, accounting functions are especially important for the decision-making and planning of your company.
The collection of financial information will be of great help when planning the future movements of your company. Also, it maintains transparent relationships with investors, which means a solid foundation to gain their trust and expand your business.
7. Why does your company need an accounting service?
7.1 Find the best business structure
This process is not only about money, as many people may think. With the correct use of its functions, you will be able to find the business structure that best suits your needs. For example, partnerships, corporations, Limited Liability Companies, among others.
7.2 Advice on software using
All companies in the United Arab Emirates will need accounting software at some point. Without the help of a professional accountant, you may end up using fake software, which could spell trouble for your company.
7.3 Tracking expenses
During the transactions of your business, you must spend and generate income, if you do not keep a proper record of your transactions, confusion may occur. For this reason, all your expenses and income must be carefully monitored.
8. How can we help you with the accounting services of your company?
Every day new entrepreneurs decide to start their path as owners of a company in the United Arab Emirates, however, many do not know how to carry out certain necessary administrative processes if they want to succeed in the UAE.
As people say, the difficult thing is not to reach the top but to stay, and that is why at Connect Zone we want to be your preferred agency to carry out all the necessary administrative processes and that you and your company continue to offer a quality service.
We are expert accountants, we will take care of keeping track of your taxes, we will help you with the auditing of your business and we will even help you with the bookkeeping. You can contact us to learn more about us.
Would you like to learn more about us and the accounting services we offer? You can write to the following email email@example.com where one of our representatives will assist you.