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The new year is the best time to start and set targets for the coming year. People may have goals to change and improve health, exercise more often, or finally take a trip to Hawaii which they have dreamt of forever. For business owners, creating new year resolutions could really help to integrate and focus their efforts and energy towards the coming year. Seize the opportunity to analyse the financial performance of the company and seek ways to improve it.
In the UAE, IFRS financial statements must be prepared and are required for all listed companies in the UAE Stock Exchanges and for banks. The Firms should submit a detailed activity report annually which is audited by an auditor to the Ministry of Finance (for trading companies) or to the Ministry of Industry (for industrial companies).
This responsibility exists to serve to renew the license of the company. Since the Dubai tax year is from 1st January to 31st December, the new year is the most appropriate time to make accounting resolutions for the following year.
Here are some strategies for accounting that can help you comprehend how much you have achieved in the past year – and what else you might be able to achieve in the next year.
- Reviewing the books
To actually know the status of the business and to find any missing links in order to improve the performance, it is really important to review the accounting books on a weekly basis. This procedure helps the businesses to manage cash flow more efficiently. Reviewing the books will help to monitor and evaluate weekly earnings and costs incurred by the business. If a harmful problem occurs, it can be discovered quickly, and one can have the chance to correct it in a reasonable time.
- Seeking planning advice for professional tax
By pursuing expert advice on tax planning, business owners will feel confident that their business will align with state and federal tax regulations. A tax professional could even suggest the deductions and credits that the business may qualify for. The tax personnel stays informed regarding the new tax laws and rules that may have an impact on the bottom line of your business.
- Review of growth, sales objectives and revenue
Take some time to reflect back in the last two years. How much did the company grow or shrink? What is the change in earnings and the profit incurred? Are the sales growing or declining according to the closing numbers, the amount of expenditures as compared to the earnings, etc.
- Was there a list of objectives?
How many objectives you accomplished and how effectively did the business achieve its goals. Reflecting on past years should help businesses determine how the company has changed in the past year. If the business has not really strengthened, analysis of the information can contribute to find the reasons and provide the scope for improvement.
- Updating the payroll system
Updating the payroll system can both expedite the operations of the business and help to save money too. Paying staff digitally rather than by means of paper checks can save everyone’s time and precious resources. Tracking the progress of all the workers during the payroll update is important. It is vital to properly categorise people as employees, independent contractors or consultants.
- Efficient collection of unpaid invoices of the customers
Unpaid invoices can take a toll on the cash flow of the business. Before reaching out to the customers who have not paid the amounts, the firm is expected to recheck all the details of the customer and the invoice. Details such as the exact amount owed, the date of payment, and has it elapsed or not. Thereafter, send a polite and firm reminder to the customer. By doing this, it is likely to increase the odds of collecting cash for the invoice and retaining the customers.
- Planning for major business expenses
Unanticipated costs in the businesses are likely to be inevitable in the coming years. Planning for unexpected expenses now instead of later can prevent a business from having a financial collapse whenever anything goes wrong.
- Outsourcing of accounting functions
Generally, if a business tries to perform all the accounting functions in-house, it may consume a lot of working hours. Outsourcing some or all the accounting functions can increase the efficiency of a business and its performance. It has several advantages like decreased costs, saving time, providing timely access to financial reports, enhance security as well as giving access to experts as well as the best talent in accounting and its resources.
- Shifting the business services related to accounting to the cloud
Shifting the business services to the cloud will improve efficiency and greatly reduce the administration and at the same time, giving the liberty to work from anywhere. Softwares like Xero, Workflow max, etc. can be used by the business to improve the efficiency of its operations.
- Nurturing existing profitable clients
Instead of finding new clients, it can, in most cases, be more profitable to strengthen the relations with past clients and work for them. The ways to keep in regular touch with them include sending emails, phone calls, newsletters, etc. which will make your company an indispensable resource of business to them.
- Understanding tax changes and meeting with the accountants
Tax laws and standards alter every year at the federal, state, county, and district levels. Communicating with the tax professionals to fully comprehend the latest regulations and how they might significantly impact the businesses and their tax returns is extremely important to stay prepared for any upcoming situations.
Whether you have a staff accountant or work with an outside tax preparation service or an outsourced CFO service, setting up regular meetings with the accountants is very beneficial. It can help to review the year-end figures and layout action plans to meet next year’s aims and objectives.