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Bookkeeping is a practice as well as a platform to track and trace all financial information and transactions of an organization. This includes saving data related to purchases, sales, and all the relevant receipts and documents regarding them. This is an important practice that needs to be followed by every business personal irrespective of the business and the scales defining the business. Bookkeeping, more precisely, is practiced in order to avoid any potential confusion regarding any important transactions and eliminate any unwanted expenses related to the firm. Besides, bookkeeping also helps in framing a vision regarding the future plans of an organization and how effectively they can be implemented without any severe harms and hindrances.
A professional official is able to handle all bookkeeping related practices and is able to manage the financial well being of an organization by systematically framing all the data related to finance and other relevant terms.
But there occurs at some point in time some kinds of discrepancies and mistakes that are not healthy for the well being (economic as well as social) of the firm. These are some common bookkeeping mistakes. It is natural for a human to make mistakes, and human learns from the mistakes he/she made in the past. So are there some common bookkeeping mistakes that can be made in any organization without realizing the potential harm and threats related to them.
Bookkeeping practices in Dubai
Since the country has witnessed a huge uplift in the economy and this economy is smoothly flourishing, in order to harness the maximum potential of the opportunities available, the young start-ups are doing all the possible errands. Since we know the importance of bookkeeping in Dubai and what could be the repercussions if the practice is taken lightly or avoided, it is important to keep a separate professional for this work. The realization of the need to keep a professional bookkeeper may not arise the thought to avoid the common mistakes related to it. Therefore, also realizing the threats related to inefficient bookkeeping is important because it will ultimately help in the unhindered progress of the organization.
Common bookkeeping mistakes in Dubai
There are certain common bookkeeping mistakes in Dubai that many firms and officials made. These mistakes can carry with them issues and threats that may look small initially but may take bigger appearances in the future. So, here are some common bookkeeping mistakes in Dubai that must be avoided: –
- The first and foremost mistake is not hiring the right official for bookkeeping. This could common as most of the people look for a service that needs to be paid less and could be handled on the basis of some fixed intervals so that no regular payments are to be made. This tactic, though, looks smart but eventually leads to a state where the firm is in the situation of utter disguise, and public relations are also on the verge of getting spoiled.
- Overlooking the small expenses is another common mistake that is encountered by many bookkeepers in Dubai. The very small looking expenses are the root cause of big losses or improper executions of tasks in the future.
- Mixing personal and company expenses is a practice that a bookkeeper(professional) avoids on a general note, but this may not be avoided by those who are not bookkeeping professionals in the UAE and tend to take this responsibility while performing some company centered tasks.
- Inefficient backing up of the data. This is a very important task that needs to be deployed at every stage of bookkeeping in Dubai. This practice helps in obtaining any old data related to purchase, sales, or any other relevant transactions made in the welfare of the organizations. Storing and backing up the data must be done very effectively and in a proper manner so that it can be retrieved as and when required.
- Not being tech-savvy is another common mistake that needs to be realized by many people handling young start-ups in Dubai. Though the technology has modernized to a very great extent, its effective utilization is not up to the mark. Storing and recording data manually was a practice of past, now are the days where all the data is compiled up in a sequential manner and then stored for any future references. The process must be very quick and sorted, and to make this possible, there are many web applications and software present. Thanks to the rise of Information Technology!
- Another common mistake includes not having separate bank accounts for the company related operations and personal operations. This can create a lot of confusion at some very sensitive point of time. A leaf of the same branch could be not categorizing expenses properly.
- Correct categorization of business and personal expenses does not let you make any wrong assumptions regarding the company’s financial and economic health. It is also important to classify the employees who provide their services to the organization. Generally, the classification between regular employees and independent contractors helps to avoid misfiling and overpayment of taxes.
- Another common bookkeeping is a lack of communication. Employers or founders need to set a decorum in which the communication between the bookkeeper and the rest of the employees become healthy and continuous. This communication helps the bookkeeper in understanding the financial position and any upcoming projects so that precise and working decisions could be made. Besides, the bookkeeper helps in analyzing the procedure and processes in which the projects can be executed properly and with the least expenses.
- As already discussed, the need to be tech-savvy is the need of the hour. But too much dependence on technology may also be harmful. There may occur situations where something may occur to the stored data, and it may go corrupt. To avoid such a situation, a back-up must always be ready. Not particularly a manual, but another alternative data storing platform or device which is much safe and can be easily accessed.
So, these were some common bookkeeping mistakes that can be easily tackled, but if avoided, they may even turn out to be havoc for your business. Every individual treats its star-up as his/her own child, and this special attention is very important. Avoiding these mistakes at the early stages of the working process is beneficial as they create minor issues and problems intermediately while the organization is working peacefully. On the other hand, creating and maintaining healthy relations with employees and the bookkeeper in Dubai is also necessary as it promotes the growth of a healthy working environment. Thus, working in such a competitive world becomes easier and better. Lastly, it is the awareness of the person that at last defines what height his/her organization/firm/start-up will achieve.