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No matter what your company deals with, you cannot afford to be careless about accounting work. Your business definitely needs to comply with the norms of Dubai in this regard, including taxation related stuff. However, it is not just enough to use suitable accounting software application for this purpose; sometimes, you might need to opt for accounting Services in Dubai unless you don’t mind getting mired in legal tussle resulting from poor financial work. You also need to evade making the commonplace mistakes several business owners make.
The Accounting Mistakes Business Owners Tend to Make
The accounting mistakes are done by the business owners owing to factors like forgetfulness, oversight and at times, lack of a logical approach and planning. For a business operating in Dubai, such accounting mistakes can prove to be costly. One mistake can pave the way for others. In some cases, your company may face legal actions too. So, it is imperative that you learn about these accounting errors and steer clear of them.
Not Planning Budget For Each Project
Whether you have a business in Dubai dealing with PC accessories or selling FMCG products, having a proper budget for every project is important. Whether it is for an upcoming marketing campaign or launch of a new product range, having a well-planned budget in place is important. If you skip this vital step, expenses will touch the roof. Just keeping a portion of funds for marketing expense is not a prudent move. It is better that you keep a separate fund for each section.
Not Segregating Accounts Receivable From The Liquid Revenue
In accounting, recording sales transactions is important. However, some entities do not recognize the fact that all sales are not liquid revenue streams. Things like transfer delays and Overcharging may seem like earned revenue-but in reality, it is not so. You may find it hard to write off a section of accounts as bad debts but doing so is helpful in the long run.
Not Keeping Money Separately For Paying Taxes
In Dubai, and in many other countries, businesses need to pay a certain amount of revenue as tax to the govts. It can be a solo ownership firm or one running in collaboration. It would be a mistake on your part not to keep an amount set for yearly tax payment to the govt. It is not a desirable situation where your company’s taxes are due but there is no fund available to clear it.
Not Keeping Track Of Small Transactions
Some businesses in Dubai make the mistake of not recording small or minor transactions. However, this is a mistake you should steer clear of. A small transaction made for printouts or paying courier bill looks negligible. However, in the long run, many such small transactions make up a significant amount. If you exude all such minor transactions, your records will be far from accurate.
Not asking for Professional Help
When you start a small business in Dubai, keeping track of accounting may not seem hard. However, over the years, the business size and scale of operations go up. The number of employees also grows. After a point, you or the employees may struggle with keeping accounts up to date and unintentional errors may occur. It would be wise to appoint a suitable third- party agency to tackle accounting tasks. There are freelancing financial consultants who can be of use too.
Not Keeping Receipts
To ensure your company’s accounting work is accurate, keep every single receipt and bill, however frugal they seem. This will help you resolve conflicts while calculating taxes at the year-end. So, it would be wise to keep digital copies of all receipts and bills.
Not Keeping Backups
You may have accounting software in place but not keeping backup of accounts and updating it periodically can lead to troubles. What if the computer you use for backing up data crashes or develops malfunction! It is always prudent that you keep a backup of the accounting data and save it on a suitable, secure cloud-based service.
Summing It All Up
You should ensure the accounting work for your company is done in the most suitable manner- all over the year. By careful planning, you would be able to evade the common accounting errors made by the entrepreneurs.