7 Types of Internal Audits

Internal audit is an analytical method that can be your valuable decision-making tool to improve business performance and management after investigating and understanding cost inefficiencies. You can significantly make organizational controls better with the help of the unbiased, independent analysis of business processes, workflows, and systems.

7 Types of Internal Audit Methods

Why internal audit?

From recognising enterprise-wide performance loopholes to getting insights into the company’s financial statements data, identifying risk areas to evaluating the accuracy of transactions – an internal audit critically assesses the completeness concerned with the organization’s financial and non-financial aspects. 7 types of Internal Audits include the following:

1. A Compliance Audit

What is a compliance audit? It is the most practised type of IA where auditors check each phase of the process thoroughly to ensure that every workflow perfectly complies with established (federal, international, or state) laws, policies, and regulations. Finances, as well as operating controls, are critically reviewed for adherence to standards.

A compliance audit lets you highlight gaps between requirements that govern the conduct and company procedures. If your organization follows any other reporting entity, your management must stay acquiescent to the laws and regulations provided by the entity to avoid regulatory action. The nature of laws can significantly vary depending on the industry.

Failure to conform with laws or other restrictions may cause you to lose money worth millions of dollars. Or worse, your company can be suspended in certain dominions, negatively impacting your financial health.

How can internal audit add value to the business? The auditors help you stay compliant with international standards on auditing by delivering an unbiased judgement on the company’s compliance requirement and advising you on value-adding training.

2. An Operational Audit

Simply put, it is an in-depth analysis focused on evaluating productivity, efficiency, and effectiveness of internal controls of every vital development procedure, critical business operation, and system. An operational internal audit is helpful to ensure that company’s financial and non-financial resources are utilized most efficiently and cost-effectively per the guidelines presented by the Board of Directors, without compromising professional objectives.

Operational Audit techniques are best-defined in a combination of the 3 Es: Effectiveness, Economy, and Efficiency.

Also called performance audits, they let you make significant and much-needed improvements for operating excellently. Consider an operational audit report an ideal way to assess how new management and the current staff are handling processes.

If your management fails to execute operations at its full potential, you may experience reduced profit performance, inability to achieve objectives, an unfair relationship between economy and efficiency, and unjustified use of extra resources.

3. A Financial Audit

Internal financial audits are performed with peculiarity to objectively inspect and appraise internal control processes to get an estimate of generated revenues and expenditures. It evaluates the accuracy of the company’s financial statements to keep financial records, including transactions, up to date. Your company budgets need to be settled by comparing income to expense reimbursements.

Internal auditors provide the management with authenticated and verified figures (in the form of financial audit reports) from accounts that perfectly represent the organization’s current financial well-being. Nonetheless, it is imperative to minimize risks of bankruptcy, recognise potential weaknesses in workflows, and make enhancements to bring precision in reporting compliance to laws and regulations.

Why do we audit financial statements? Your inefficient records and false financial statements can result in huge losses of capital assets, putting you in a challenging fiscal condition.

4. An Information Technology Audit

IT auditing is solely dedicated to evaluating IT infrastructures and performing real-time assessments to guarantee the accuracy of running applications, operating systems, and databases. This evaluation provides a 360-degree overview of the management looking after information technology environments.

Apart from determining input, output and processing controls. It is carried out to check the precision of backup and recovery plans as well as system security. It is performed alongside compliance, operational, and financial audits to give computer facility reviews (controls, hardware, software, security, documentation).

If automated information processing systems fail to perform proficiently or you are unaware that these systems are utilized effectually. Your company can lose confidential data or experience a data breach.

Why internal audit is required? Information technology control and audit help you find the loopholes and possibilities to upgrade the system, bring IT accuracy and identify processing capabilities. Without fortified and keenly appraised IT infrastructure, confidential information can be at risk.

5. Investigative Audits

This auditing and investigation are only conducted when needed to evaluate an exceptional circumstance. The most common causes that can ask you for special investigations include:

Internal theft
Misuse of assets
Hotline allegations
Conflicts of interest

Internal audit fraud investigation is primarily required when the company has become the target of alleged federal or state laws violations. It keeps you mindful of the company’s expertise, independence, and complaints from staff.

6. Environmental Audits

An assessment is carried out to evaluate the influence or impression of a firm’s existing operations on the surroundings. Along with ensuring compliance with environmental laws or regulations to save the planet. The internal audit function is to weigh if the management is using methods that are eco-friendly and minimizes energy consumption. Environmental Audit reports may add value to your business.

Well, your companies must be environmentally conscious and safely source raw materials to minimize environmental damage. Such as reduced greenhouse gas production.

7. Construction Audits

Least practised internal audit (technical audit of construction projects) where inspections are performed to certify that the building is made following suitable physical development procedures and appropriate project billing. A construction project audit is beneficial to keep you adhering to the contract terms and invoicing activity as necessary.

Construction internal audit tasks are executed by development, operating, real estate, and construction companies.

Profits Plus for Maintaining a Good Internal Control System

Experienced and skilled accountants at Profits Plus provide quality assurance and top-tier consultant service through the internal audit process. We let your company achieve professional missions by checking the effectiveness and efficiency of the procedures

From evaluating risks to mitigating them, detecting fraud and errors to scrutinizing the economy – our internal quality audit procedure helps you improve operational internal controls and reliability over financial statements/reporting.

New Tax Law In UAE – Installments & Waiver of UAE VAT Administrative Penalties

UAE introduced VAT in 2018, and since then, nearly every businessman has been the target of hefty penalties and fines due to incompliance with VAT regulations. Genuinely speaking, following FTA VAT strict Installment rules can be tough.

Many changes have been made to the UAE VAT FTA rules, whether it is about offering a time extension for non-UAE businesses to forward an application claiming a VAT refund or modifying the voluntary disclosure guide.

But recently, a surprisingly significant change has been made in the UAE tax laws where problems related to penalty waivers and installments were discussed in a new Cabinet Decree No. 105 of 2021 titled ‘Regarding Protocols and Procedures for [Tax] Penalty Installments and Waiver’.

Signed on December 28, 2021, the UAE new tax law was put out in January 2022 in the official gazette and became effective on March 1, 2022.

Now, taxable persons are allowed to resolve their administrative monetary penalty either by requesting a waiver or paying in installments. Considering specific circumstances, a waiver can be permitted for the VAT Penalties compensated in the last 05 years. Moreover, no application for installments or waivers can be accepted if litigation is continued.

According to this law, the Committee holds the power to cancel the installment plan anytime in the case of the taxpayer’s failure to submit the installments on time. For maximum ease, taxable persons in UAE who have asked the authorities for an installment of penalties can request the revision in a plan to make instant amendments. Still, first, the taxpayer must ensure to satisfy the Federal Tax Authority.z

Installments in Administrative Penalties

If you meet the criteria below, your request to pay administrative penalties in installments will get instant approval.

You can forward an application for only an unpaid tax penalty.
The total sum of unsettled penalties must cross AED 50,000.
The taxable person is willing to pay the penalties in full in installments.
The unsettled administrative installment penalties shall never be questioned by the TDRC (Tax Disputes Resolution Committee UAE) or the Federal Court.
No tax is due for the tax period for which an installment request is being filed.

Request For Penalty Waiver Of Administrative Penalties

If you meet certain conditions, the authorities will permit the waiver for penalties. But Committee will always have the right to cancel the request for authentic reasons. But remember, the Decree never discusses single-person held limited liability businesses.

The waiver will be approved in the following scenarios, or one must comply with the following requirements:

If the unsettled administrative monetary penalty is not associated (directly or indirectly) with tax evasion.
The taxpayer has never been imposed officially with any restrictions, precautions, or preventative measures from the UAE government or any governmental authorities.
Death of a natural business owner or a key employee of a tax registrant, regardless of the cause.
If a registered taxable person had already paid the tax before he went into insolvency or bankruptcy.
All taxes are paid through another taxable person’s tax account.
If the natural registered person, owner of the sole establishment, or a key employee of a tax registrant is severely ill.
In case of resignation of the key employee of a tax registrant.
No evidence was found concerning constraints on the rights, liberty, and independence of natural taxpayers or establishment owners.
No waiver will be accepted if a proof is found against the individual regarding general malfunctioning in the Authority’s systems, reimbursements, or used telecommunication services.
In cases of insolvency that was not for purposes of tax evasion.
No proof of compliance in the system of the FTA UAE or payment and communication systems.
The registered person or the owner of an establishment has the record of “execution of a custodial sentence.”
A penalty waiver request is forwarded within the specified time frame suggested by the Committee.

Procedures for Submitting Requests

Once you have met the necessary criteria, the taxpayer must fill out the official application forms the Federal Tax Authority UAE asked to request installment plans or a waiver. A taxable individual cannot file more than 01 application for the same penalty/ies.

Generally, the following documents and information are required in the forms:

Personal details include correctly spelled name, updated address, and other information on the taxpayer.
TRN (tax registration number), if applicable.
The amount of penalty.
The details of violations for which you are requesting.
The original date when the penalty was applied to the business.
Authentic reasons behind submitting the request.

Be aware of the common mistakes that can lead to the cancellation of a waiver or installments. Most importantly, you must never breach the undertakings, or else the application will be nullified, and FTA will re-impose the waived VAT penalty payment. The taxable individual is held accountable for filing an undertaking as:

In case of an installment schedule, you MUST ensure that your application states that the installment will be remunerated per the schedule specified by the Committee.
In case of a waiver request, you MUST ensure that your application states that the reasons for the administrative penalties will indeed be mended and corrected. The taxpayer must promise not to make a mistake ever in the future.

Timeline & Committee Decisions

Federal authority of tax takes 40 business days for:

Reviewing your request
Making sure that your application is in full compliance with official government standards
Verifying each control & procedure sketched during the cabinet decision is being followed properly.

If the application is found valid, it shall be sent to the Committee, who takes approx. 60 business days for taking the final decision of approval or cancellation. The applicant will be informed within 10 business days. If you notice a “lack of a decision,” consider it a denial. In case of installment application approval, you will be asked to provide corporate, personal, or bank guarantees.

The Committee is not only accountable for setting the timeline for filing waiver and installment applications but also has a free will to decide how much percentage of administrative penalties will be renounced, the payment dates, the total amount to be waived off, and a new plan against admissible excuse for defiance with the payment schedule.

Providing Cost-Effective Services In VAT In UAE

Profits Plus provides top-tier VAT advisory for optimization. From VAT registration to VAT filing and implementation, our experienced tax advisors, finance experts, and tax accountants ensure that you stay compliant with UAE VAT penalty laws.

No one understands the complexity of VAT registration better than we do. That’s why our VAT services in UAE can save you from suffering an administrative penalty in the future!

How To Develop Standard Operating Procedures (SOPs)

If you want to see your company flourish, discipline and consistency are what you need to bring in If you want to see your company succeed, discipline and consistency are what you need to bring to each workflow. When the companies grow over time, managing operations become more complex, which can make you compromise on the quality of the services. That is when SOPs come in! The benefits of Standard Operating procedures (SOPs) are endless. The importance of standard operating procedures cannot be denied!

We agree with what MaintainX has to say about SOPs, “Whether attempting to sell the world’s tangiest loaves of sourdough bread or recycle 5K tons of non-ferrous metals every day, standard operating procedures (SOP) help busy teams consistently meet consumer demand and company standards with minimal errors.”

How To Make Standard Operating Procedures (SOPs) – Top 7 Tips

Where SOP improves collaboration and efficiency, it also needs a lot of time and your attention to investigate every crucial business process and pen the protocols down. Well, it doesn’t mean you can present a poorly written SOP. Considered the pivotal point in business growth, SOPs accuracy is demanded. But, how can you develop the standard operating procedures that will not only engage the employee but clearly explain their responsibilities? What are the pain points of effective SOPs?!

1. Understand What You Want This SOP To Accomplish

Why exactly are you creating Standard Operating Procedures? Without determining your goals for developing SOP, you cannot even start writing an outline. You must have the vision, the aim, and a clear-cut answer to WHY and it should be knowledge-based. Be aware of how SOP executions will bring out the positive side of your company. Don’t make your SOP documents text-heavy and boring.

To better define the reason, highlight hurdles and complications found in existing processes. Having a solid basis for SOP helps in outlining the necessary activities for a better understanding of the reader. The best approach is to keep the end in mind and start writing each aspect crucial for fulfilling SOP’s objective.

Be sure to ask yourself:

How will SOP help your company work more efficiently?
Will it promote teamwork and better alliance?
Is SOP written to make the company more compliant with industry standards?
Are you creating an SOP for employees to follow guidelines for improved productivity?
Is it designed to serve clientele most professionally?
Does your SOP assist in developing absolute best practices?
Are you writing your SOP as a guide or for highlighting essential steps of procedures?

What will be the purpose of standard operating procedures if the end-user fails to understand its real meaning and cannot follow guidelines? For achieving positive results, you must mention the main objective of SOPs at the top of the document. It will not only explain to your teams why following the SOP matters but also double the engagement levels.

2. List of Processes

Once you have explained WHY now move on to WHICH. By which, we mean which processes must be mentioned in SOPs or for what processes you will be creating a step-by-step guide. It is necessary to develop a list of processes for creating Company operations procedures and standards as it will assist in either combining multiple guidelines or splitting one into different SOPs. The managers better have a detailed discussion session with their teams and then forward the list to the management team for the final review and identifying redundancies.

While enlisting the processes, make sure to include only the ones that need standardization and the procedures foreseeing a change.

3. Write End-User Focused SOPs

Most importantly, the SOPs must be written from the audience’s perspective. You should understand your staff and gather knowledge about their professional experience, language skills, traits, etc., for a clearer picture of how you can relate your SOP to the reader. EVERYTHING must be suitable for the end-user! It must be impactful for your audience. A few tips include:

Use easy-to-understand, consistent language.
Don’t make it overwhelmingly detailed.
Always add a glossary section.
Use active voice.
Be consistent in formatting.
Stay laser-focused on the tangible responsibilities of the end-user.
Never miss out on adding eye-catchy visuals, such as flowcharts, screenshots, diagrams, and videos.
Do not use unacquainted abbreviations or terminologies.
Use “must” for mandatory instructions.

Always put yourself in the employees’ shoes and decide which processes need to be mentioned to achieve overarching business goals rather than over-explaining.

4. Use SOPs For Minimizing Waste

Taiichi Ohno idealizes SOPs as a source of reducing particular types of operational waste for well-organized and competent resource usage. For example:

Under-utilization of Skills is one of the biggest wastes that can be minimized with SOPs by addressing inefficient hiring processes, lack of communication, and wasteful administrative duties.
Overproduction is considered an operational waste. With good SOPs, you can acknowledge erroneous market forecasts, bizarre customer needs, and unproductive use of automation.
Highlighting recurrent reasons behind troubleshooting along with responsible consulting staff can fill the gaps and eliminate the risks of defects in organizational procedures. Another waste was removed!
One of the most common wastes is waiting time. Through SOPs, you can identify possible delays, noticeable lop-sided workloads, and unacceptable employee absent-mindedness.

While writing the Standard Operating Procedure document, every skilled manager must be conscious and proactively look for ways to get rid of the common types of waste with world-class solutions.

5. Implementation of Electronic Data Management System

For easy management and automation of SOPs, it is advised to use user-friendly standard operating procedure software. Electronic Data Management System or Computerized Maintenance Management System software not only systematizes SOP development but offers wide-ranging convenient, smart features to:

Develop SOPs without errors.
Edit multiple SOPs from remote locations offline.
Track changes.
Download files easily.
Save SOP templates for better customization.
Create SOP or assign tasks even on smartphones.
Monitor improvements.
Ensure regulatory compliance.

Digitizing documents declutters your file mess, causing disorganization in your cabinets. It makes the standard operating procedure checklist scannable, measurable, and actionable.

6. Choose The Right SOP Format

Do you want to produce consistent results? Are you looking for ways to explain company processes unmistakably and briefly?

Pick the most straightforward format that adheres to the international standard ISO 9000 or something similar, lets you produce a precise list, and gives enough space to include necessary explanations. You can find a variety of formats to follow, but the most commonly used structures include:

Simple Step-By-Step List:

Presented in a bulleted list.
Written in short sentences.
Best-suited to explain routinely workflows that need to be followed in a specific order.
Suitable for developing safety guidelines.

Hierarchical Steps:

Best-suited for complex procedures comprising a lot of steps.
Based on primary & secondary checkboxes.
Provides extra space to present additional information.

Flowchart:

Best-suited for penning down detailed processes that can give not one but several possible outcomes.
Helps explain the actions that must be taken in unpredictable scenarios.
Makes SOP easy to read and comprehend visually.
Provide better insights with standard operating procedure flow chart template.

With the proper standard operating procedure format, you will save yourself from creating unappealing, clumsy, and drudgery SOPs.

7. User-Friendly Template

Different tasks demand different Standard operating procedure templates to share the essence of a valuable message but ensure to follow consistency to make all of your SOPs appear the same way!

For organizing procedural documentation, pick the template that best conveys the information about task completion, as it will save time and energy. As Monitrium explained, “Pre-made SOP templates that are based on industry standards provide organizations with a solid foundation for SOP creation, speeding up the time to developing documentation.”

Most essential elements of the standard operating procedure manual template include:

Title
Scope
Overview
Necessary Tools
Procedural Steps
Attached Manuals
Target department
Accountability Measures

Always use industry-vetted templates to have an excellent starting point for SOPs and keep the battles of unnecessary formatting at bay. Use at least two templates to escape the last-moment problems in the final review.

Minimize Variability & Maximize Quality With Well-Written SOPs

Profits Plus Accountants are always ready to provide top-tier counseling services and offer complete guidance in writing company standard operating procedures for making task delegation convenient. Our experienced team assists in establishing best industrial practices and law-compliant policies while meeting your monitoring purposes.

With our SOPs, you will become stress-free about completing workflows on time. We ensure a unique client experience.

8 Advantages Of Online Accounting Software | Why Business Must Use Cloud Accounting Software?

In the past recent years, the business world has been introduced to progressive and high-performing cloud technology, completely revolutionizing the approach to carry out routine tasks. Cloud-enabled computing is needed more than ever to keep a company’s accounts and finances under check. Cloud accounting software tops the chart among the cloud-based business solutions, for instance, Zoho software, Freshbooks, QuickBooks, SAGE, and Xero.

Whether you have subscribed to a paid or free cloud accounting software, it will help you collaborate and create seamless connections globally. The company will experience a significant reduction in overall management costs while enjoying business growth and top-tier efficiency.

According to Forbes, by selecting the best cloud based accounting software for medium sized businesses, you can easily keep a close eye on company expenses without wasting your wealth on recruiting, training, and managing accountants’ teams. With a close cloud accounting software comparison, you will find the best fit.

The Top 8 Benefits of Cloud Accounting Software

The implementation of online/cloud based accounting software is most likely to grow as it supports companies in running automated, streamlined processes by minimizing human errors. The cloud based accounting software ensures accuracy and security in managing real-time financial information and transactions. It not only cuts down your expenditures but also proves to secure confidential data from online & offline threats.

With improved visibility and easy access to real-time centralized financial data, a shift to digital accounting software will bring eye-popping transformation to businesses’ basic accounting activities.

Let’s look closely at the incredible benefits of cloud based accounting software!

Quick, All-Time, and Easy Access To Updated Data

With online company finance software, you will be provided instant, trouble-free, and easy access to real-time, updated information saved online on the cloud platform. All you need is a secure internet connection and a functional device. You never have to install heavy, space-taking programs and apps on your laptops or mobiles to carry information.

Kiss goodbye to outdated asset management spreadsheets! A simple login to your authorized business account (cloud) will take you to the latest data you must be looking for to have an accurate business overview. It brings you the information no matter what corner of the world you are in. With 24/7 access from anywhere, you can share files securely and generate reports.

You are allowed to restrict anyone’s access and manage permissions for particular job roles—one of the best benefits of accounting software for small businesses.

No Installation and Maintenance

The best cloud accounting software for accountants takes the burden off your shoulder to administer, run, supervise, and maintain IT infrastructure or any other administrative tasks. Cloud software needs no installation or specialized IT department. The company never has to worry about implementing routine backups, downloading time-consuming software, or installing management servers. The online cloud computing accounting software service provider will handle everything on your behalf.

Solve all your problems by accessing advanced software over the internet! Now, you can spend your resources on more important tasks to increase productivity and free your administration staff to complete pending projects.

Improved Collaboration

Need to work with your partner on the same file, but you are miles apart at a different location? Not a problem with cloud accounting! Online collaboration significantly simplifies tasks, improves decision-making, and gives a way to achieve better outcomes.

Accounting/financial information saved and accessed through online platforms enhances collaboration as you can communicate with other members and teams or add multiple users when needed for better project management.

Automate Your Accounting Tasks For Accuracy

Human errors are inevitable, and a single mistake in a company’s finances can make you face drastic consequences. So, why not eliminate the risks by automating your accounting procedures with cloud accounting software?!

It is high time to free your staff from predictable, repetitive tasks and let them focus on more valuable, strategic tasks!

Cloud-based accounting platforms save not only time but also your efforts by automating laborious manual tasks such as maintaining records, generating reports and invoices, calculating discounts and taxes, making pay slips, scheduling and paying subscriptions, and handling payroll applications, etc. It is, undoubtedly, an affordable alternative.

On the one hand, automation speeds the process. On the other hand, automation eliminates many of the error-prone manual steps guaranteeing accuracy in each calculation.

Customization, Scalability, and Integration

The most significant advantage of using cloud accounting is its high availability and scalability, flexibility, and customizable features. After all, spreadsheets become unmanageable with all-time increasing data. Considering the company’s demands, needs, and budget, the software is scaled up or down. You are most welcomed to create your personalized dashboards on cloud based payroll software for accountants by adding business-target and industry-specific terminologies of your choice. Online accounting systems work well with all sorts of expansion plans.

Additionally, the best cloud based accounting software gives you the freedom to integrate cloud accounting software with your other business applications, especially if you find it challenging to supervise each application individually. Integration possibilities are truly endless!

Go Paper-Less – Eco friendly Choice

Time to shift systematically from traditional paper accounting to digitalized, paper-free, online accounting!

Apart from being an efficient solution for you to play your part as a responsible citizen, it declutters your physically stored archived paper records. Manually writing notes, handling printed documents, and distributing confidential reports to other parties can be really risky as they can go missing.

You must start storing electronically generated reports and invoices in the cloud. You better scan all copies of bills and receipts and save them online in an organized way, rather than piling them on the desk. Moreover, you must save important conversational emails for future use. Where reducing paper use brings a positive environmental impact, it also cuts down the energy used by servers.

High-End Data Security

What if your employee steals essential company documents? What will you do in case of cyberattack or theft? How will you cover the damage if the server crashes? You always need a fool-proof backup plan, redundant disaster recovery plan, and a top-tier safety plan to ensure that each piece of information is safe in transit and storage. This is only possible with the use of best-in-class cloud/ online accounting software that guarantees data security with end-to-end encryption encryptions, access permissions, tracking records, 24/7 surveillance, and constant backups.

Data security in cloud accounting seems unbreakable because of pioneering tech. You can enjoy full-time privacy and protection from hackers. Skilfully planned disaster recovery strategies never let you face data loss and improve your productivity.

Increased Efficiency

Why use cloud accounting software?

From automation to backup plans, no installation and maintenance to data encryption, providing updated information to keeping track of authorized access, generating error-free reports to built-in analytics tools, quick data access to cutting down overall expenses, checking the system automatically for any mistakes to offering scalability – cloud accounting software only impacts the business positively by improving efficiency and productivity.

An online system with built-in controls promises increased accuracy on a grander scale.

Xero Cloud Accounting Software

Now you have acknowledged how cloud accounting software helps your business’s finances, you must be desiring to use online accounting platforms, and Profits Plus makes this shift easier for you.

At Profit Plus, we not only provide you with qualified accountants who offer top-notch accounting services, but we ensure the use of the latest technologies, including Xero cloud based accounting software, the best accounting software, to help businesses save time and cost through accounting automation. This is how we keep your cash flow healthy!

How To Be A Great CFO For Driving Operational Gains

What do you expect from a CFO? What the key strengths for CFO? Do you define a good Chief Financial Officer with financial insights, a few technical skills, accounting competence, and the ability to forecast and take calculated risks? To be a professional, modern, and good CFO, you need a lot more to keep up with the ever-evolving digital transformation.

What Abilities Required For CFO? | Top 7 CFO Requirements

You must be wondering exactly what makes a great CFO? Over the years, the definition of a great financial officer has modified as CFO duties and responsibilities have become more leadership-centric.

A good CFO is smart enough to look beyond the numbers and play the role of a trustworthy strategic business partner to the CEO for maximizing investment, harnessing Big Data, and adapting swiftly. A successful CFO must have a keen eye for minute details, a deeper understanding of the company’s finances, a forward-looking mindset, and a macro view of the competitive market.

Let’s look at the characteristics and common key attributes of becoming a remarkable CFO!

Excellent Leadership

One of the essential traits of a great CFO is “strong leadership ability” because he will not only be responsible for bringing a talented team together but also for leading, motivating, guiding, and training them. Officer must be a problem-solver with the front-runner confidence to make critical decisions for handling disrupted relationships with stakeholders.

The role of CFOs is the proposer of the company’s growth which requires unparalleled headship qualities so they can envision the bigger picture and achieve the company’s business goals by utilizing their tactical skills.

Master Technical Skills

If CFO lacks IT knowledge, managing the finance department might get tougher!

A CFO must make profitable decisions about the company’s expenditures and make its procedures more efficient through automation. BUT, it is only possible if the chief officer is tech conversant and has the capacity to adopt and implement the newest technology solutions. As Sarah Spoja, CFO of fintech provider Tipalti, explains, “CFOs should be thinking about how they can build a tech stack that will help them and their team be as successful as possible. That means both reducing manual work and having the data and insights more easily attainable.”

Whether the finance chief is making a budget, carrying out analysis or auditing, ensuring compliance to standards, or implementing accounting principles, it is necessary to develop or refine their technical expertise to look closely at the organization’s finances.

Comprehend Real-Time Financial Data

If the CFO fails to handle data and cannot appreciate the importance of delivering in-the-moment insights when needed, the enterprise will never grow!

To improve internal efficiencies, make profitable decisions, limit instability, foster a friendly relationship with global companies, and impress new clients, the CFO should be familiar with the numbers and must have the ability to perform analytics of the existing financial data to help the CEO take executive choices without struggle. A good CFO must have a strong analytical aptitude.

CFO with the proper knowledge and industry experience is more likely to succeed in the argument against competitors, scaling up the company’s growth exponentially.

Forward-Looking Strategic Mindset

How to be a CFO who is appraised by every member?

The simplest answer to “how to be a great CFO?” is “to be able to forecast risks through analysis and help the company accomplish all financial goals by following strategic, forward-thinking models.”

A good, effective CFO is the one who always thinks and progresses strategically, the one who is always ready to take strategic initiatives, the one who acts as a change leader with a forward-looking approach, and the one who partners with the board of directors to forecast the future using numbers.

The finance officer should follow the “ask, analyze, and strategize” attitude for revealing opportunities, identifying challenges, analysing diverse viewpoints, making impactful real-time analysis, and expecting change without succumbing to pressure.

As explained by Steve Priest, eBay’s CFO, “Helping them think about what’s around the corner and the trajectory of the company, particularly in an ever-changing environment, is incredibly important. To do that, finance leaders need to be looking forward and anticipating change.”

Adaptability & Innovation management

Modern CFOs are considered “good” only if they show the capability of:

Making the most out of the available resources to run a company’s finances effectively
Focusing on process improvement to adapt to the existing situation
Revolutionizing a highly motivated working environment which supports originality
Retaining employees with his organizational skills
CFO strategy for internal departments should reflect radicalism
Adapting the newest advances in technology for innovation
Refining the company’s talent recruitment strategy to bring in the best candidate
Utilizing automation solutions and management tools for effortless working

CFO activities must reflect modernization. Ash Noah, vice president of CGMA External Relations at the American Institute of CPAs (AICPA), emphasizes innovation and advises against relying on old practices anymore. He says, “Making your business resilient and strengthening your business model is what the CFO of the future will have to do. The old way of thinking stifles innovation and ruins new business creation.”

Best Style to Communicate & Collaborate

CFO duties are nearly endless, and to become the best CFO, first, you must be aware of different communication styles and understand what style suits the situation or audience. Second, you must choose the most professional, effective, and comprehensible ways to communicate with your partners and competitors. CFO educational background might play a significant role here.

According to Brian Beckwith, CEO of Formation Capital, “Flex Communication Style” should be the priority. To become excellent communicators:

Always prefer a transparent communication
Uphold an engaging session
Make sincere and confident statements
Don’t forget to address critical issues
Stay interactive while sharing information with management
The conversation should be concise

When you know how to communicate being CFO, you will better coordinate company activities, carry out hiring procedures, manage offshore teams, and collaborate with other parties.

Risk Assessment Skills

Where providing real-time insights is one of the primary CFO tasks and responsibilities, forecasting risks related to security, compliance, financial, personnel, or IT is also central to their job. A successful chief financial officer must not only recognize potential threats but also mitigate them to avoid a long-term business crisis. He should take responsibility for creating a strong defense against calculated risks within the operating framework.

In the opinion of executive recruiter Arnold, “Managing cyber risk specifically has now become front and center for CFOs. They’re partnering with their CIO to determine the risks and how to confront them across the entire organization.”

Leading Provider of CFO Services to Dubai-based SMEs

Who needs CFO services? Everyone does!

Profits Plus has flexible, affordable, and pioneering CFO accounting services to help grow companies operating in Dubai while meeting their all business needs. We deal in four leading accountancy firms. From hiring a skilled in-house CFO for internal audits to consulting our verified British accountants to understand VAT, Profits Plus offers a plenitude of services.

What Are The Benefits Of Standard Operating Procedures? | Top 8 Advantages Of SOPs

No matter the size of your company or number of employees, creating Standard Operating Procedures (SOPs) is a must-have for fostering better employee autonomy and achieving consistency in employee performance. With professionally documented SOPs, you can achieve the desired output in terms of staying organized, delivering effective training, simplifying recruitment procedures, and operating smoothly by following specific work policies.

For those who don’t know what is SOP? These are step by step instructions that must be numbered or better presented in flow diagrams to act as leading guidelines for existing and new employees.

To introduce the culture of reliability, independence, safety, and quality control, develop SOPs for your company!

8 Benefits of Standard Operating Procedures (SOPs)

We are aware that making SOPs demands time and effort, but it is definitely worth it. They help you in the longer run. Let’s see some of the best advantages of SOPs.

Reduced Employee Training Time and Cost

Always keep your training-related SOPs ready because presenting detailed guidelines in written form will not only leave a positive impact on new employees but also standardize orientation, regulate training, make them more productive, and let each employee learn the same information in the same amount of time without wasting resources. You can save big on training costs with SOP, as well.

During training, company standard operating procedures will provide them with a chance to settle in quickly and understand important facts about the company. These instructions make it easier for new hiring to comprehend how their duties need to be done while taking the pressure off of your shoulders of spending long hours training your new team.

On the one hand, Human resources standard operating procedures will surely not be used as a substitute for training. On the other hand, documented components can be best used as reference guides giving spare time to the supervisors to judge their abilities.

With a well-oriented standard operating procedure training file, you can expect your new recruits to complete assigned tasks efficiently without repeating important details again and again. You only need to hand them your SOPs to study while training completion!

Enhance Autonomy

SOPs give a sense of autonomy to the employees. As they will have the guidelines in hand already, they won’t be running back and forth to their managers to seek permission to make profitable decisions. They get freedom from asking for “reassurance” all the time and “excessive reliance” on supervisors.

Companies that make SOP checklists are better at cultivating self-confidence!

Straightforward Audits

If your SOPs provide a clear image of all the auditing procedures, regulatory policies, and practical procedures, the company can successfully conduct a strategic internal audit to remove inefficiencies and improve the company’s workflow. Moreover, it will also highlight the areas that need utmost development.

Having technical SOPs and management SOPs will provide the guiding principle necessary to steer the accountants and managers in the right direction.

Safe Yourself from Knowledge Loss

Having computerized or printed SOPs accessible to everyone and securely kept either on data-encrypted servers or in the cloud will prevent your company from experiencing a loss of knowledge.

The knowledge exits from the same gate your key employee or manager exits because generally, the essential details are only saved in THAT worker’s head instead of in manuals. It can severely put your central business processes at risk. To make sure that your organizational knowledge stays and is resourcefully transferred to the substitutes, document each & every essential instruction. You better save them on editable standard operating procedure software to avoid surprises.

Comprehensive, well-written SOPs are the key to running valuable business smoothly despite new hiring!

Improved Employee Management

A perfectly detailed SOP improves staff management and eliminates any kind of uncertainty to minimize the occurrence of avoidable blunders in the first place. You can use SOPs as a fundamental tool to not only evaluate the employee’s performance but also to bring areas of improvement to their notice. When you provide SOP, you give your team the competence, dependability, and predictability they must be looking forward to succeeding.

Monitor and boost your team’s performance with the help of SOPs!

Save Company’s Resources

One of the most significant advantages of using SOPs relies on their cost-effectiveness. It optimizes costs by reducing certain types of waste, including:

Defects
Overproduction
Waiting
Not utilizing talent
Transportation
Inventory excess
Motion waste
Excess processing

If you present the instructions to the employee regarding his task, there are lesser chances for him to do it unfairly, wasting effort or resources on needless processes.

Performance Enhancement

Why SOP is important?

With the help of SOPs, workers will be able to grasp the nature of their duties and fulfil them responsibly, showing consistency in task completion as they will be already aware of the expected results through provided guidelines. Step by step instructions helps to meet quality standards and get rid of delivering subpar results.

Developing standard operating procedures enhances productivity by eliminating the guesswork from day-to-day operations by ensuring that each employee understands the methods, rules, and events associated with their professions.

Guaranteed Employee Safety

How can you make new talents work for your company? By offering the maximum care because employee safety is an undeniably important factor, regardless of the nature of your business.

First, you can promise that you will be offering a safe workplace by providing them SOPs mentioning all the clauses per the standards. Second, when employees are familiar with the company operations procedures and standards that must be followed inside the office, the environment becomes safe and secure because SOPs will make your workforce stay compliant with the company as well as government mandates to avoid hefty fines.

Minimize Variability & Maximize Quality with Profits Plus

SOPs are the cutting-edge business practice to reduce workflow chaos and ambiguity!

It is time to pay extra attention to writing an SOP, but if you are drowning under work pressure, let Profits Plus help you develop or update your existing SOPs. We counsel the best in creating a comprehensive, step by step, the ultimate guide for employees.

You can avail strategic and competitive benefits from our well-documented SOPs. We suggest policies while keeping the purpose of standard operating procedures in mind.

How To Write An Audit Report – Contents of Internal Audit Report

To write a high-impact audit report, you need lots of practice and time with proper guidance. It must be done per the standards and in alignment with the primary objectives to effectively explain the whole audit management process. To learn how to write a good audit report, you must look for some tips and best practices.

The first step should be penning down the detailed writing format for the report. Utilizing the standard internal audit report formats provided by ISO and other organizations is always better. Brainstorm how you will present your information and what stats you will be including because overwhelming them with unnecessary facts and figures will bore them sooner. Keep the 5 C’s of internal audit report writing in mind.

You can search for audit report templates (audit report samples) to get a quick idea.

How to Write an Internal Audit Report?

Do you know the what is the best internal audit report format? For an Internal audit summary report, a standard template is usually followed to meet the core objectives and requirements that the addressee has asked for. The better the report format, the clearer the picture of the business’s financial status.

The audit report structure must have the below-mentioned sections in the same sequence but you can make slight changes such as adding follow-up section:

Title & Cover

How to prepare internal audit report? Let’s start with a simple yet engaging cover that must leave a good impression. After all, it will be the first point of contact with the reader. A quality internal audit report cover page speaks for the auditor’s efforts. Your cover should provide the readers with the title, auditor’s name, the end date for audit, and the company’s name being audited. Don’t forget to mention “Independent Auditor’s Report” in the title as per the internal audit report structure.

Addressee details

Addressee means the person who will be addressed in the report, a person responsible for hiring the auditors. It is usually the shareholders of the company. Their professional life, designation, duty roles, and essential employment incidents or experiences must be highlighted. It makes the internal audit report presentation more engaging.

Introduction

One of the most important headings in an internal audit report writing format! This section must highlight the significant points to have a better understanding and give a quick overview to understand why the audit report is presented, such as:

The area/departments being audited
The processes being audited
The standards followed while conducting an audit (ISO 9001, ISO 14001, etc.)
Any historical financial information
Any facts that readers must keep in mind while reading the report

It must be concise but legible and authentic. No false facts or unverifiable statements must be made.

Scope & Objectives

As the heading implies, the scope and purpose of the audit must be explained thoroughly. After reading this section, the addressee must understand:

What the audit is really about
The reasons why the audit risk areas are of importance to the company
Any limitations on the scope of work completed
The members responsible for conducting the audit
Why internal controls are tested
How Company’s accounts are inquired about and verified

The auditor must provide credible proof that the audit examination of the company’s financial reports has been completed per the country-wide accepted standards. The evidence must be legitimate and free of material misstatements to make the shareholders or investors believe you.

Opinions

One of the essential sections of any internal audit report is the auditors’ opinions concerning the business’s current financial status. It can be:

Unqualified or Clean Opinion: The highest grade opinion signifying that the report is generated and maintained in full compliance with the Generally Accepted Accounting Principles (GAAP) without any misstatements in financial records.

Qualified Opinion: It is issued only if the company fails to maintain financial records following GAAP. However, the report is free of misstatements or when unacceptable disclosures are provided for the financial accounts.

Adverse Opinion: Lowest-grade opinion, or the worst type of opinion given on the internal audit review report explaining that records are neither conformed to the GAAP nor free of misrepresentations. It directly puts the company in the lousy spotlight, being called a fraud.

Disclaimer of Opinion: If the company fails to prove its financial status or the auditor is unable to determine the status due to the lack of details.

Results

Once the reason for auditing is explained, issues with their root causes are identified, flaws in financial records are highlighted, opinions are made, and the final verdict of the auditors’ team is provided. The result section summarizes the major findings supported by credible references and criticizes the performance of the management in resolving formerly acknowledged problems.

Recommendations

It is a point where you suggest new action plans to meet the deficiencies of the financial department considering the records. The skilled auditors can only play an advisory role, making recommendations or encouraging them to take certain actions to get rid of problems, but the final decision will be taken by the management

Conclusions

It is considered the end of the internal quality audit report format where auditors are asked to add more comments (positive or negative) that cannot be mentioned in the result section. It goes beyond the individual issues of a company’s corporate governance. You can write an internal auditor’s opinion in this section as well. Most importantly, it gives you extra space to write positive notes to appreciate the management team.

The internal audit annual report is finalized after examining the company’s internal control systems deficiencies, which have some common sections, as mentioned above.

Terminologies:

Provide a short and easy-to-understand definition for each and every term you have used in the structure of internal audit report. It makes it easier for everyone to understand the information.

Auditor’s signature and Place of the signature

At the end of the internal audit reporting structure, don’t forget to add the auditor’s signature on the report for credibility. The auditor must mention the city in which the report is signed.

Date of the Internal control audit report:

Always mention the date when the auditor signed the audit report.

Create an Executive Summary

Do you really think that senior executives read every word or go through every page? Well, they don’t have enough time to do so. That’s why draft internal audit report with an executive summary highlighting key points such as important dates, procedures, factual statements, and figures.

It must summarize all data and present it to the decision-makers to determine if they need any new action plan. It must not take more than 30 minutes to read.

In literal meanings, “it is a compact debate of the conclusions of the auditing tasks completed in a complete audit report layout.”

Audit Services to Improve Operational Control

With the help of experienced, professional, and skilled accountants at Profits plus, you can handle an organization’s internal audit more efficiently. We have assurance and consultant services with risk advisory to help you reach your ultimate goal. Our team always selects the most beneficial standard policies for Dubai-based businesses while guiding them through auditing and supervising financial operations.

Choosing between Saasu and Xero

For starters, for a business to grow and expand, the annual financial data is very important to devise strategies for the next fiscal year. For a better understanding of the operations of the enterprise, the managerial hierarchy must have access to clear, correct and latest data and information of their enterprise.

Now the term cloud computing has been around for a long, we’ve seen many iterations of accounting software come and go. This has allowed the business market to evolve and become breeding grounds for more competition. That makes sure that the quality of the products/services can always be held to a standard that is best for the consumer- basic economics.

As we all know by now these nifty cloud computing services allows the right people to access the data at their whim, provided they have the necessary permits to access the data.

These days cloud computing services are now readily available for businesses of all sizes and operations in Dubai. That is made possible through the use of accounting software like Xero and Saasu which are used by all leading firms. It offers an extensive range of accounting services which include SMSF audit, taxation, financial management and accounting outsourcing services. This software can manage operational bookkeeping of businesses which can help keep track of the business transactions, but they both have some differences in comparison.

Xero and Saasu have several similar qualities when we talk in accounting terms, mainly revolving around pricing and transactions. The user-friendly accessibility allows users a wide range of formatting, printing and mailing options. Both the software are available in various currencies as well, enabling people from all parts of the world to reap the benefits from using them.

Xero

Xero (accounting software) has fairly high demand these days amongst the accounting fraternity mainly because of its ease of access.
Xero contains an all-inclusive payroll tool that facilitates the user to manage employee payroll obligations suitably by creating ABA files. These files are meant for the majority of the employee payments, track employee entitlements, and execute an automated super payment process.
Xero has exceptional integrational abilities for third party add-ons that help raise the system functionality.

Xero is a timesaver essentially, the bank feed feature reduces bookkeeping time and costs.
Xero is user-friendly and customisable, with more options for the user to prioritize financial aspects.
Xero provides different types of invoicing, enabling business operations to be accessed easily when needed.

Saasu

Saasu (accounting software) enables the conversion of sales quotes into individual invoices. Making it a must-have for businesses in the construction sector and also for trading businesses that have a high sales volume.
Saasu focuses more on inventory and accounts associated with it. users can gain access to PO’s and send them to suppliers. The system at the backend tracks this movement via the inventory.

Saasu allows its users to mail invoices in large volumes, all while providing highly customisable email templates as well.
Saasu like Xero can easily incorporate third-party add-ons to bolster system functionality

It has been made clear what features both software have to offer. Using either of them relies upon the nature of your business and what you as the user are looking for.

But the appeal of Xero is unparalleled in its capabilities. Xero is the complete package with so many benefits and can offer so much more to owners than any other accounting software. If you want to go for the best accounting software for small businesses, opt for XERO!

8 Different Types of Accounting Practices

How do you plan on expanding your business without knowing how many resources you are left with, how much revenue you can expect, and how much money has been spent on taxation? You simply can’t!

Every business needs a stable accounting department responsible for keeping the owners updated about the current financial position along with anticipated percentages of profit or loss.

8 Types of Accounting Practices

To keep your finances straight and up-to-date with the company’s cash flow, you must be familiar with all eight types of accounting.

Public Accounting

As the name suggests, public accounting is a practice where a businessman allows an independent accounting firm’s certified public accountants (CPAs) to keep their company’s accounts, financial records, bank statements, and related information in check and balance as a few of the financial documents are necessary to be publicized. UAE has plenty of well-known public accounting firms offering additional services, such as bookkeeping, financial consulting, and payroll services, apart from auditing and taxation.

The firm will be held accountable for strategizing business plans, suggesting profitable mergers, and making acquisitions while keeping the internal accounting system streamlined.

Private Accounting

It is an accounting practice where an accounting professional (expert) is recruited to bring the business’s accounting and other information in order. He is responsible for recording finances properly and keeping them updated. The accountant will be provided full authority to tackle all financial, tax-related, and managerial accounting issues within the organization.

Government Accounting

A practice where government agencies responsibly deploy state auditors (or equally eligible individuals) for recording, creating, and anticipating budget (income and expenditures) in accordance with the Governmental Accounting Standards Board (GASB). Agencies will set reporting standards and track:

How public money is being spent

Amount of the remaining available funds

It is a valuable step in ensuring that financial, accounting, and related information is accurate.

Financial Accounting

This accounting principle is a traditional practice and serves the purpose of keeping an updated record of each transaction, maintaining a balance sheet for trailing the financial situation, pinning down assets and liabilities, informing shareholders about the financial shifts, and providing the owners with the detailed summary of cash flow. A financial accountant expert (secretaries, stock intermediaries, chartered accountants, etc.) is obliged to follow internationally or locally recognized accounting standards to prepare financial statements and the statement of change in equity.

Two main types of financial accounting are cash accounting (mainly practiced by SMEs) and accrual accounting (suitable for larger businesses). It is necessary to define the company’s existing financial status.

Cost Accounting

It only collects and analyze information regarding the company’s expenditure on manufacturing products. Cost accounting helps you make sensible decisions about future inventory, production, manufacturing, and supply spending. It comprises fixed costs, variable costs or input costs, etc. and is aimed at finding the cost gap between the estimated and the actual cost of production.

Forensic Accounting

Forensic accounting is inevitable for any business as it serves the function of a financial detective, responsible for:

Scheduling timely evaluations to get a hold of financial fraud

Finding lawful proof of malpractices
Submitting evidence to the courts to prove the case of embezzlement
Writing an accounting report in easy terms for the court to explain if the company is carrying out illegal procedures
Analyzing data to determine the missing amount 
Suggesting practicable solutions to recover the lost amount

Highlighting misstatements and verifying controls

You can either keep it in-house or hire forensic accountants.

Management Accounting

Like financial accounting, management accounting involves using statistical tools and approaches for recording data and analyzing financial transactions. By using these statistics, accountants manage to infer current or upcoming trends as well as forecast financial liabilities. It not only considers the company’s expenses but also non-financial aspects of the business to make profitable decisions. 

The three most common categories of management accounting include strategic, performance, and risk management. Depending on your business needs, you can implement one or all three at once for obtaining information.

Tax Accounting

A type of accounting solely designed to check the company’s tax liabilities: registration, returns, deregistration, and payments. 

In UAE, tax accountants take care of VAT-related issues. They check if your company needs to pay tax, what amount, and when. With their proper help, you will be paying the respected amount of taxation without delays, saving you from administrative penalties. It ensures that you are following all-time changing tax laws. 

How Profit Plus Can Help in Accounting

Outsourcing your accounting needs is beneficial for highlighting high-level risks of future events and preparing you to embrace unforeseen circumstances. Profit Plus has qualified British accountants for delivering high-class accounting practices and maintaining financial transactions properly for SMEs and large companies to survive in the long run. We will not only let you save big on money but also give you a golden chance to benefit yourself from professionalized and personalized VAT services. 

Contact us to consult about different types of accounting practices in the UAE and audit-related queries, as we will help you select the most suitable approach for your business.

Tax accountants get your all tax responsibilities done!

9 Common Mistakes to Avoid While Filing VAT Returns in UAE

In January 2018, UAE implemented Value Added Tax (VAT) for the first time, instructing every business to follow the laws set by FTA (Federal Tax Authority). VAT plays a key role in compensating the declining revenue and keeping a close check and balance of expenses. That’s why every company is advised to be extra careful when filing for VAT registration, returns, or deregistration.

Most Common 9 Errors Made by Registered Companies During VAT Returns 

Once you have paid your tax, you must file the VAT return for the confirmation of payments. Act vigilantly if you want to keep yourself safe from paying hefty fines and administrative penalties. People filing Value Added Tax returns themselves must try avoiding the following mistakes because being an industrialist or businessperson, you will probably not have time to deal with tax issues.

Not Disclosing Zero-Rated and Tax-Exempted Sales

Have you been carefully filing for only standard-rated transactions without mentioning zero-rated and tax-exempted sales? If yes, then you are doing it half right!

Identifying and disclosing zero-rated and exempted transactions to the legal authorities is equally important. Like missing out on output and input VAT can cause you to pay heavy penalties, forgetting or hiding the record of zero-rated and tax-exempt sales can take your business downhill.

Entering The Sales in The Wrong Emirate

Another common mistake is categorising standard-rated transactions per the consumer’s location while filing VAT returns in the UAE. The right emirate for sales is where you have your business running regularly and actively.

It must be based on a business’s fixed establishment – an official workspace or office with enough team force, technical assistance, and industrial resources for conducting business operations.

Missing the Deadline

Getting busy in business meetings and forgetting about filing VAT returns before the proposed date – a very common problem.

For quarterly and monthly VAT returns filing, FTA has specified the deadlines, and in case of any delay, miscalculations, or omission errors, the taxpayer is penalised heavily. The administrative penalty for delays in VAT returns filing is worth AED 1,000 for the first time and AED 2,000 for the second.

Keep your tax filing schedule up-to-date, make sure you never miss out on filing a VAT return and save yourself from the last-minute panic episode!

Mistakes in VAT calculation

Companies should keep the applicable Value Added Tax rates in mind considering their services and goods. Mistakes in calculations or disbursements will lead to consequences (punishments, fines, etc.)

Carelessness in Maintaining a Detailed Invoice

Nimesh Goel said, “It is critical for businesses to develop their tax compliance strategy to contain the rise of non-compliance.” And it really is! 

Without a well-structured strategy in place, you cannot keep your tax-record straight, and every tax-eligible person must have a detailed invoice ready for each return. Authorities can ask for transaction details anytime, even from the past years, and you should be able to deliver it within 5 business days.

Appealing VAT Return on Outlays that are not Legalised

If you are a businessman, you must be aware of daily expenses. But that doesn’t mean you will be recovering VAT on each and every penny. Unfortunately, we have seen companies claiming VAT returns on expenses that are not allowed.  

As per the VAT rules in UAE, the below-mentioned expenses don’t ask for Value Added Tax recovery:

Entertainment/recreational activities
Automobiles (vehicles) used for personal work
Employee-related expenses

Are you still confused? Contact Profit Plus to get the necessary VAT assistance. Our VAT experts will guide you about the UAE VAT law.

Errors in RCM

RCM stands for Reverse Charge Mechanism – a tax applicable on goods or services imported to UAE, which is paid by the buyer to the government directly. Most companies prefer not to link their Tax number with the taxpayer’s account, making it difficult to claim for input VAT along with bringing imprecisions in transactions as they forget to account for import transactions (covered under RCM) while filing VAT returns.

Faults in Adjustment Columns

What tax-eligible persons don’t understand is that each adjustment column in the VAT returns filing process must be filled accurately and completely. They must be utilised for the adjustment of bad debts rather than mentioning and rectifying the mistakes that are done in previously filed VAT returns.

Fill every column with the right type of information. Or else, confusion in numbers can cause investigation and/or penalties trouble.

No Proper Record-Keeping

Authorities are allowed to ask the VAT registered businesses to submit their previous VAT data. In fact, FTA has made it compulsory for all industries to maintain correct records of each sales invoices, purchase, inventory, tax paid on import and export goods, salary transfer, general ledgers, bank statements, credit and debit notes, employee benefits, and payment receipts from the past 5 years. For real estate, they must maintain a record of the last 15 years.

Keep it organized!

Put Your VAT Worries Behind with Profit Plus

We, specialised and reputable tax professionals in UAE, ensure that your VAT return filing procedure goes error-free with our expert-level guidance and professional support of qualified VAT accountants.

Whether it is about VAT registration, deregistration, or return filing, Profit Plus resolves tax issues thoroughly and delivers the right VAT solutions without exposing your business to any threats.