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Bookkeeping in Dubai is one of the most necessary tasks that all businesses must face. The monotonous and boring task of bookkeeping can often be very time consuming. Bookkeeping, as monotonous as it may appear, is actually every businesses important task when it comes to business management and growth. It is only with accurate and consistent measurement of a business’s financials that business owners can effectively manage and expand their businesses.
- Improper record keeping
It is common for businesses to lose receipts or fail to record small expenses that seem insignificant. Maintaining accurate records on a regular basis can save time and money. In case of an audit, accurate records could end up saving one from incurring penalties.
- Improper categorization of accounts
Lack of knowledge of formal bookkeeping practices can become an issue. Accurately categorizing income and expenses in the correct categories ensures proper measurement of profitability.
- Non reconciliation of bank accounts
Auditing requires providing complete records of business related expenses that are separate from your personal expenses. Make sure that your bank statements are properly reconciled every month to minimize errors and identify potential issues.
- Lack of backups
Issues are a common occurrence with use of technology. It is always a possibility that something could happen to data which makes it imperative for every business to back up their data to avoid potential losses.
- Neglecting Tax
Oversight in collection and reporting of taxes can result in significant fines and penalties. Alternatively, incorrect data entry may result in overstatement of amounts and tax dues.
- Bad petty cash management
Businesses often operate with a petty amount of cash, but they have lack of understanding of how to manage and track it. Business should try to set up a system which allows it to track the cash receipts and payments.
- Neglecting to track reimbursable expenses
Many times expenses are paid out of personal funds and chances are that these expenses get overlooked with time. Failure to account for these reimbursable expenses can result in losing tax deductions. Create a system to make it easy for the businesses to easily and consistently track and record reimbursable expenses in order to claim tax deductions.
- Poor communication
It is important to have strong communications between the bookkeeper and company. Keeping the bookkeeper involved and integrated with the happenings of the business will help in creation of financial statements which reflect the true needs of the business.
- Wastage of too much time
Many businesses try to do bookkeeping themselves or do not hire the professional help they need. It is known time is money, business fail to understand value of time. Employing professionals for doing the tedious and time-consuming task of bookkeeping will free up more of one’s time so one can focus on growth and taking the business to the next level.
Now that you have gone through the most common bookkeeping mistakes in Dubai, take a look at your bookkeeping practices and determine whether any of these apply to you. It is the time to make some simple changes to improve your bookkeeping practices in Dubai and turn that monotonous task of bookkeeping into your most effective tool for business management.