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The owners of the small and medium businesses are usually so caught up with their long list of responsibilities every day that they forget to keep up with the business practices and keep working for the various roles in the business that they hold. It is especially important to practice the business calculations to foresee where your business is headed, whether your business is profitable, or you need to make certain changes to keep it on track. The regular business practices help you to understand your business well and are an essential part of the process of running a business to prevent any sudden surprises about the finances in the business.
Importance of Accounting and Bookkeeping in Dubai
Practicing accounting and bookkeeping proactively is an extremely important step to track your business and to keep it on track. To make sure that your bills are paid, and the other things are working well as well, you must ensure that your accounts are balanced as these things might slip off your mind while you are tackling with the other responsibilities revolving around your business. Your accounts must include recording about the activities such as transactions, sticking to a budget, invoices and bills are settled, etc. so that you can look for the irregularities on a daily basis. You can make notes about your plans and goals for that week so that if you face a contraction to your plan in the near future, you can refer back to your notes.
Many times the small and medium business owners do not have the knowledge of the financial business practices, or even if they do, they do not have the time to perform them while being busy with the other responsibilities about the business. Thus, it is suggested that they should hire an accountant who can look into the finances of your business and can guide you to make your business a long-term success. They will help you keep track of your finances and will advise you to improve whenever there will be a downfall in the finances.
Accounting Tasks to be completed every week in Dubai
Now that we know how important it is to keep the accounts updated and to maintain bookkeeping for a business, here a few things regarding accounting that needs to be done weekly to keep a better record about your business in Dubai.
- Check cash position daily: When you run a business, your money is always flowing in and out of the bank account(s), so you need to make sure that you keep a daily check of your cash position in the bank so that you can be sure that you have enough money to pay for the bills and the pending invoices. Cash is referred to as the king in the business as there is no doubt about it that if you run out of cash, your business will run into trouble. Your account statements should be checked daily without fail to be sure that your business is growing strong. You must look for the balances in each of your accounts and then consider the money that you would be anticipating for that week. Then consider the pending bills and invoices that are due for that week to be sure that you have enough to cover your expenses. Keeping a daily check on your cash position can help you avoid getting into problems where you have bounced checks and overdraft fees.
- Maintain documentation of transactions: To maximize the profitability of your business, you need to be leveraging write-offs that are available, which are otherwise difficult to keep the account or if you are not maintaining daily records about your business. Though it might seem like a huge task maintaining the receipts and paper works, but it is an essential part of keeping your business on track. Without maintaining these documentations, you could possibly miss out on potential deductions, or you could face an issue regarding the IRS audits of your business if you do not have the proper receipts to back up your write-offs.
- Clear outstanding invoices: Invoicing is a necessary task to ensure that you have enough money to follow up with your bills. It is important to clear the outstanding invoices and receive your money on time before the invoice gets lost in the pile of documents. Maintaining an invoice system ensures uniformity when you send requests for payments. A better strategy for maintaining the invoicing is to set a day in the week when the invoices go out so that you can achieve uniformity about sending the invoices, and this will help you organize your work better.
- Review and pay your bills: Sort out the invoices that are pending to know about the costs that are pending for that week. Keeping track of the outstanding payments can help you keep the payment process regular and can also help in checking if you have enough cash to make the payment. In case you do not have sufficient cash at that moment, you can reach out to the vendor to discuss some other method of making the payment. You can also check if any of the vendors offer a discount for the yearly payments. Paying the bills is a good way to assess your anticipated cash flow.
- Evaluate costs and expenses: Instead of paying all the bills as they come across your desk, you could take some time to assess if that expense is necessary for your business. Very often, you keep on paying for the services that you no longer require, but because you do not assess your payments, you do not terminate those expenses. Therefore, evaluating your expenses can be a good way of terminating the extra expenses that are not necessary for the business.
As can be seen that accounting helps you to not only organize your business in Dubai but to also track its performance. If you follow with these weekly accounting practices, you can be sure that your business is on track and can become a long-term success.