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Accounting reports that all UAE based businesses must pay attention to
Having a bookkeeper in the Dubai is rather an important practice that most of the UAE based businesses must follow. But, besides this, there is also an important practice that must be performed carefully for smooth and unhindered traversing in the competitive environment of the UAE. This practice can broadly be seen as reviewing or checking the accounting reports regarding all the transactions and expenses related to the firm or start-up.
In a country like the UAE, taking this practice on a light note can be very expensive and disadvantageous for many new and enthusiastic businessmen and entrepreneurs. In order to manage and monitor the various financial aspects of your organization in a seamless and resourceful manner, it becomes vitally important to manage and review the accounting reports and analyze them on a very regular basis. It is not possible to imagine an environment that promotes your organization to perform better in the future if you do not have any well-drafted information regarding the financial and capital-related transactions and terms.
What are actually accounting reports, and why are they important?
In order to understand what are accounting reports, it is necessary to understand what financial statements are.
Financial statements are nothing but summarized reports about an organization’s financial performance and results, financial position, and flow of capital. These statements usually determine the ability of a business to generate income, profit, and its ability to pay back the debts. They also determine any issues regarding the profits or losses to the business.
Now coming to the accounting reports, these are the reports regarding the financial information of the organization, and which are moreover taken from the previous or contemporary accounting records of the organization. These accounting reports are developed to keep track of the sales in a particular region or any positive or negative response regarding profits and loss of any particular service or product. Accounting reports are generally considered equivalent to financial statements.
There are a few terms that are related to accounting reports. These are the income statement, balance sheet statement, and statement of cash flow.
Income statement – Income statement is an important financial statement used for describing an organization’s financial performance. It is also known as profit or loss statement or statement of operations. This statement describes the total expenses made for the business and the net revenue bought in by the business, keeping in mind its profitability over a specific period of time, say, a month.
Balance sheet statement – The balance sheet statement is a statement that describes the state of the total assets (current and non-current), liabilities, and shareholders’ equity (investments) of an organization during a specific period of time. In short, this statement shows the organization’s financial position and the status of its economic resources.
Cash flow statement- This statement states all the cash in-flow and cash out-flow of an organization over a period of time. Unlike the income statement and balance sheet statement, this statement takes into consideration only the cash money activities and does not involve any non-cash activities like sales or purchases.
The accounting reports are a compilation of all these statements and the essential data contained by them.
Importance of accounting reports
Accounting reports are very important because they contain significant information about the company’s or the organization’s financial situation and health. The main reason behind the need for proper maintenance of the accounting reports is to efficiently plan future projects and maintain the ongoing projects and work in a resourceful manner.
In a flourishing economy like that of Dubai, it becomes very necessary for the young and innovative start-ups to harness all the opportunities of fortune and plan for the forthcoming in an as efficient and effective manner as possible. These accounting reports are the shortcuts to knowing all the transactions and purchases on hand and beyond it analyzing the flow of capital involved in the various processes that help the organization run smoothly. Also, the investment, debt, and profit return amounts are also analyzed by the help of these accounting reports.
Why pay attention to the accounting reports?
The scenario is not that of the early years of the nineteenth century when oil was found in Saudi. This contemporary scenario has witnessed the advancement of literacy rates, the outburst of innovative minds, and the birth of a competitive nature. With very dynamic advancement in the field of information technology, almost no one is left debarred of knowledge. The youth is coming with all new decorative and society concerned innovation that eventually helps mankind to live in a more, peaceful, and safe environment.
In an economy like that of the UAE, it is though not easy to survive the business competition, and it has never been a cakewalk either. The threshold to the better and long-running rule is the maintenance, and proper check on the very basic ideas like having a separate professional bookkeeping official and paying attention to the accounting reports. Just maintaining the records does not keep up the play, recognizing all the latest market standards and government policies and then drafting all the documents in the required manner is important. This practice is essential for the ready reference of any important document or receipt regarding any past expenses or transactions. Therefore, such accounting reports will help maintain a non-fussy working environment for the employees and for the organization ultimately. Besides performing this role, it maintains its main and important function of keeping and recording data properly and safely.
Many organizations are able to reduce their unnecessary expenses and eliminate any confusion regarding the financial exchange and conversion of services, products, or the capital.
On a broader notion, the current requirement of smart execution of tasks in business depends on how effectively the work is divided and how efficiently the implementation processes are being followed—keeping in mind the competitive environment I the UAE, what could correctly be concluded that a check on accounting reports is highly advisable for all young businesses out there trying to make a statement. The results will surely be reflected in the future, and the clock takes constant steps for everyone in the. The understanding of the need of the hour is something that leads a person to great heights, required that the person understands and implements the art of acceptance that dwells on both sides of the working arena, that is, the producers and the consumers.