5 Killer Solutions For Smart Business Owners

Starting a small business is one of the toughest things you will do in your life, so its important that you are equipped with the right tools to make it a success.

The following are the tools you must have when starting a small business:

Lead management system

A good lead management system or better known as CRM is a crucial tool for any entrepreneur or a small business owner. Many small businesses spend thousand’s not to mention the time investment in tracking down their first few potential clients but when they are rejected they quickly move on to the next potential and never actually keep in touch with their initial leads.

It can take 6-10 touches to close a prospect and it can take weeks, months or even years to build professional trust with some clients before actually do business with you. All these prospects and there the last conversation and the next action point need to be recorded in a smart, simple-to-use CRM solution.

Here are a few suggestions:

There are many more out there and you should feel free to trial each one before reaching a decision. Important: Make sure that you are happy with the Email Integration options with whichever CRM you choose. It should be easy for you to send mass emails to the database.

Smart Phone and Business Laptop

Using your old phone or laptop when meeting prospects does not cut it.  The number of times that I have met with owners pitching their services using their old phone and laptop and then apologising by saying ‘my laptop is old’ or ‘I don’t have data’, its just not the right approach.

Get a good smartphone with ample data and invest in a used Core i5 laptop at the minimum. If money is a problem then purchase a reconditioned laptop. I bought a reconditioned ThinkPad Corei5 for AED 1000 and its just a good looking powerful machine.

Latest smartphone with unlimited data seems to be normal for teenagers but it should be mandatory for an entrepreneur.

Email on the Go

Do not think that you are too big to not have access to your emails ‘all the time’.  I have read countless business blogs that preach leaving emails in the office and I doubt the writer of those blogs can actually afford to do that.

Email on the GO is mandatory.

Did you know that Microsoft recently made all their MS Apps available free to download to mobile platforms and G Suite for Business has always offered a free app that integrates with existing Gmail application.

Although we do need to take a break from work it is important to be able to access critical applications on the go if the need arises.

Cloud Storage (File Sharing)

Please tell me that you do not store your business files locally on your laptop or PC?

The only way to work is to have one of the cloud storage platforms setup on your working machine and are able to access it across all devices.

Check out the following options with brief explanations.

Dropbox is the best and its FREE. Its the most seamless solution on the market and simply works. However, if you start to build a team then you will need to use the paid version which is not so expensive.

Google Drive is great if you are collaborating on documents with other team members such as word or excel documents. It is free if you already have work Gmail or you can use your personal Gmail. Either way, its good but Dropbox is much more seamless when synchronising across several machines.

Cloud Accountant

If you are in business to make a profit (trust me not everyone thinks this) then you will need a committed accountant to help you understand if you are actually making a profit or if you are just turning over money.

Modern-day accountants still use traditional accounting methods, expecting to visit clients each month or the client visits the accountant to drop off his ‘books’. This is counterproductive and instead you should retain a cloud accountant such as Profits Plus Accountants.

Profits Plus Accountants are committed to providing all accounting services through Xero Cloud Accounting Software. Getting to grips with the Profit and Loss is very important to business owners and leaving it to an accountant who will produce your accounts after 15 months at the earliest is just business suicide.

Our dedicated team of qualified accountants help clients produce monthly management reports through real-time accounting solutions like Xero which offer invoicing and payment integrations.

Profits Plus Accountants

We are a British Accounting Firm based in Dubai and we help businesses navigate the FTA requirements using the most advanced cloud accounting software in the World.

We make sure that you remain 100% compliant.

As a Silver Partner of Xero Cloud Accounting Software, we have a local team based in Dubai with over 20 years of experience (collectively).

If you are looking for an accountant in Dubai then speak to Mubashir Malik, a Managing Partner at the firm. You can reach him directly on [email protected].

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.

What is a FAF File? [FTA Audit File]

fta audit file

The FTA has produced a very concise document on the required functions of accounting software which are needed to produce the FTA Audit files (“FAF”) for VAT and Excise Tax should they ever request it.

What is accounting software?

Accounting software should be a key part of any modern growing business whether a retail store or a service provider and it is not something reserved just for large corporations.

Currently, there are many accounting software solutions being used in the UAE the key players in the market are:

When selecting an accounting solutions business owners should ensure that the solution complies with the requirements of the FTA.

Any competent accounting software should be able to produce Sales Invoice, Accounts Receivable, Accounts Payable, and General Ledger but the FTA have very specific requirements, namely the need to generate a FAF File.

FTA Audit File

FAF is something that could be requested by the FTA whilst conducting a periodic audit to ensure that tax and returns have been prepared correctly. It is strongly recommended that businesses check with their software vendors to make sure they are able to produce FTA Audit Files (FAF) if required, otherwise it would be a very costly exercise to do on-demand.

NOTE: It may be possible that your software is able to produce data in FAF but your accounting partner failed to implement and monitor the documenting of the transactions as per the FTA Requirements and you only realise when the FAF is requested at which point it could take weeks to rectify.

Key Elements to be present in FTA Audit File (FAF) are:

  • Company Information such as Company Name and TRN No.
  • Master Files
    • Supplier File
      • Name of Supplier
      • Location of Supplier by Emirates
      • TRN No. if applicable
    • Customer File
      • Name of Customer
      • Location of Customer
      • TRN No. if applicable
    • Source Documents
      • Purchase Invoices, Imports, Credit Notes (with all details)
      • Sales Invoices, Credit Noted Issued to Customers (with all details)
      • Payments
        • Transaction Date
        • Payment Date
      • General Ledger
      • Product File

In summary, your accounting software must be able to produce all or any of the above if requested by the FTA during a periodic audit of your VAT Return.

Profits Plus Accountants

We are a British Accounting Firm based in Dubai and we help businesses navigate the FTA requirements using the most advanced cloud accounting software in the World.

We make sure that you remain 100% compliant.

As a Silver Partner of Xero Cloud Accounting Software, we have a local team based in Dubai with over 20 years of experience (collectively).

If you are looking for an accountant in Dubai then speak to Mubashir Malik, a Managing Partner at the firm. You can reach him directly on [email protected].

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.

VAT Submission Deadline [must know]

vat submission dealine

VAT Submission Deadline

VAT registered business owners have a responsibility to submit their VAT return on time every 3 months (the first submission period after you register will vary for each company). The fine for failure of the person conducting Business to keep the required records and other information specified in Tax Procedures Law and the Tax Law is AED 10,000 the first time and AED 50,000 if repeated.

Administrative penalties for violations have been issued by Cabinet Decision No. (40) of 2017 and can be found under the Legislation section on the FTA website.

VAT Submission Procedure

Every 3 months you need to calculate the difference between your input and output tax and submit the summary to the FTA with a breakdown of the emirates in which the sales were generated. Ideally, you should generate a P&L and Balance Sheet at the same time and there is a very good reason for doing this.

Although the deadline to submit your VAT return is 28th of the following month after the VAT Period, you should submit the VAT return by the 25th. You need to give yourself enough time to make the VAT payment to the FTA. To learn more about how to make the payment please refer to our blog post on Making A Payment To The FTA.

Profits Plus Accountants

We are a British Accounting Firm in the UAE based in Dubai, we help local businesses to navigate the FTA requirements and we use the most advanced cloud accounting software in the World to make sure that you remain 100% compliant.

Speak to Mubashir Malik, Managing Partner at the firm. You can reach directly on email [email protected].

Note: www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping firm registered with Dubai Economy, Trade License No. 796316.

Xero Cloud Accounting Partner in Dubai

Xero cloud accounting is one of the most exciting innovations in accounting. Profits Plus Accountants are a Silver Partner with Xero Cloud Accounting. More importantly, we engage with all clients through Xero Cloud Accounting and this approach earned us the title of ‘No.1 Xero Cloud Accounting Partner in the UAE‘.

Currently 95% of our clients are taking advantage of the free subscription offered to Xero Cloud Accounting software only available through Profits Plus Accountants. Similarly, you too can get your business on Xero Cloud Accounting and work with the only accounting company in the UAE dedicated to cloud accounting.

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Making Tax Digital in the UAE

making tax digital dubai

Filling out taxation forms and filing for returns is a time-consuming process, it can sap all our energy and disrupt our schedules but change is happening and tax authorities around the world are shifting from traditional filing methods to all integrated digital platforms often integrating with third party software’s to capture the masses and make it easy for clients and advisors to partake in the digital tax revolution.

What is digital taxation?
Digital taxation is set to revolutionise the way businesses file for their taxes. No longer would business owners need to fill out self-assessment forms and prepare their taxes when software can handle all that for them. Digital taxation is the process of using compatible cloud accounting software to file taxes.

Cloud accounting platforms can also help with the day-to-day functionality of your business. They can help you track transactions, keep accounting records and prepare invoices. They can even help you avoid legal penalties by archiving and managing your records.

Making Tax Digital (MTD) in United Kingdom (UK)

When it comes to digital taxation, the UK is the undisputed frontrunner. UK Government’s non-ministerial tax collection wing, also known as Her Majesty’s Revenue and Customs (HRMC), is collaborating with accounting software developers to digitise the tax administration system by 2020 through its MTD campaign. The campaign aims to make tax collection simpler and error-free.

MTD replaces manual processes such as form filling and paperwork with accounting software. It also reduces the HRMC’s overhead expense. It saves both time and money by standardising the tax process through technology.
MTD requires VAT-registered businesses to maintain their records digitally. It is also compulsory for businesses to use the MTD software to file their returns before April 1, 2019.

UAE taxation system

Digital tax seems convenient and hassle-free so when will it be launched in UAE? The UAE government is also making attempts to digitise taxation procedures. Take, for instance, the digital stamps the Federal Tax Authority (FTA) introduced for tobacco products.

Yet, the progress remains slow and steady. Right now though, the UAE government only has an e-portal for taxation. Users can visit the portal to fill out their required information. The process remains manual since the portal is not synced with accounting software.

We can’t wait for when the UAE government introduces this system and simplifies the tax system.

How can digital platforms help with taxation?

Innovative digital platforms are sprouting up to assist people with their tax claims and planning. Platforms like the UK-based RD Vault can sync with accounting software to generate invoices, update books, prepare tax credit claims and track their progress. One such solution is Xero, a Cloud Accounting Software solution used by Profits Plus Accountants in Dubai, UAE.

Xero is an all-in-one solution, it can be used to prepare reports and maintain taxation records. This enables you to use one platform instead of a cluster of applications to deal with your accounting and taxation needs.

If you are interested in knowing how a cloud accounting platform such a Xero, can help your business then feel free to get in touch with Mubashir Malik, Partner at Profits Plus Accountants in Dubai, UAE. Contact Mubashir by email on [email protected] or call on +97143180265.

Understanding VAT in the UAE 2019

Value-Added Tax or VAT is a tax on the consumption or use of goods and services levied at the point of sale. VAT is a form of indirect tax and is used in more than 180 countries around the world. All OECD countries except for the US have VAT (or a variation). While it feels exactly the same as a general sales tax to end-consumers, VAT is a more sophisticated tax and overcomes many challenges that affect the general sales tax.

VAT is charged at each step of the ‘supply chain’. End consumers generally bear the VAT cost while registered businesses collect and account for the tax, in a way acting as a tax collector on behalf of the Federal Tax Authority.

NEED TO MAINTAIN RECORDS

VAT registered businesses will need to charge and account for VAT however, all businesses are required to maintain their business records and other information as specified in Tax Procedures Law and the Tax Law.

The fine for failure of the person conducting Business to keep the required records and other information specified in Tax Procedures Law and the Tax Law is AED 10,000 the first time and AED 50,000 if repeated.

Administrative penalties for violations have been issued by Cabinet Decision No. (40) of 2017 and can be found under the Legislation section on the FTA website.

EXECUTIVE REGULATION

As per Article 2 of the Cabinet Decision No. (36) of 2017 on the Executive Regulation of Federal Law No. (7) of 2017 on Tax Procedures Accounting Records and Commercial Books shall include the following:

accounting books in relation to that business, which include records of payments and receipts, purchases and sales, revenues and expenditures, and any business, and any matters as required under any Tax Law or any other applicable law, including:

1) Balance sheet and profit and loss accounts.
2) Records of wages and salaries.
3) Records of fixed assets.
4) Inventory records and statements (including quantities and values) at the end of any relevant Tax Period and all records of stock-counts related to Inventory statements.

BRITISH ACCOUNTANTS IN DUBAI

Profits Plus Accountants are British accountants based in Dubai. We deploy the most advanced software in the World in order to make sure that you remain 100% compliant and we leave no room for error when it comes to your accounting records.

Mubashir Malik the Managing Partner can be reached on +971529834145 and welcomes meeting in person to discuss how he can help your business or email us on [email protected]

www.profitsplus.ae is a domain belonging to Profits Accounting and Bookkeeping, an accounting and bookkeeping consultancy registered with Dubai Economy, Trade License No. 796316 and trading with the name Profits Plus Accountants.

 

Updating your details on the FTA portal to avoid AED 15,000 Penalty

keep up to date

AED 15,000 The failure of the Registrant to inform the Authority of any circumstance that requires the amendment of the information pertaining to his tax record kept by Authority

FTA in Dubai state that if you fail to inform them of changes in any circumstances you will incur a penalty of AED 5,000 initially and AED 15,000 for repeating it.

The main items that go out of date are as follows:

  • Trade License
  • Emirates ID
  • Possible Passport Copy

The above are basic items that should always be updated when they are renewed, however the problems arise when you are updating the items.

The portal has been updated to make mandatory the need to include your bank account and power of authority, these items were not mandatory when many companies registered for their TRN number in 2017.

Also for some companies the FTA require them to provide a financial statement to confirm the sales and expense for the last 12 months. I would really urge business owners to consult a tax advisor when doing this as many companies are incorrectly registered for VAT and providing such financial statements could cause the FTA to request other information eventually leading to a penalty of either AED 10,000 for failing to deregister or AED 3000++ for submitting and incorrect return.

To be honest this is all it takes to keep your FTA portal up-to-date and in addition to the above the basics such as contact details can only be updated through an email to the FTA and not through the portal.

Ali Afzal is the Managing Director and VAT Consultant for Profits Plus Accountants registered as Profits Accounting and Bookkeeping a British Owner Managed Accounting Firm in Dubai. We manage over 100 clients vat submissions and cater for clients from around the World. We are registered with Xero Cloud Accounting as a Silver Tier Partner and our fees start from AED 850 per month. Contact me on [email protected] for more information.

4 Quick Facts About Registering for VAT in the UAE

Must Know Facts About VAT in the UAE

Registering for VAT in Dubai should not be taken lightly and certainly not considered part of the process of operating in Dubai, you only need to register if you qualify or if you exceed a threshold. Failing to adhere to the Federal Tax Authorities in Dubai is a serious offence and can incur heavy penalties. Below are 7 facts that you must understand before registering for VAT in Dubai.

1. Individual Responsibility
When you register for VAT you are registering the person that is operating a business, not the business itself. Ultimately it is the individual who will be responsible the vat and the responsibilities that come with registering for VAT with the FTA. This responsibility must not be taken lightly and it is ultimately connected back to your Emirates ID.

A person can only hold one TRN for VAT purposes at any one time. It is your responsibility to ensure that duplicate applications are not submitted.

2. When do I need to register for VAT?
There is no need to register for VAT with the FTA when starting your trade license. There is so much incorrect advice on this matter. The principles requirements of VAT are fixed and therefore it is not a choice to register when setting up a company.

Mandatory Registration – if you meet the following criteria then you must register immediately:
• Your turnover was more than AED 375,000 in the last 12 months; or
• You expect that your turnover will be more than AED 375,000 in the next 30 days.

Voluntary Registration – if you meet the following criteria then it is your choice however your next 12 months will play an important factor on whether you should register voluntarily or not:
• Either your turnover or expenses (which will be subject to VAT) were more than AED 187,500 in the last 12 months; or
• You expect that either your turnover or expenses (which will be subject to VAT) will be more than AED 187,500 in the next 30 days.

3. Applying for exemption from VAT
If you have a trade license in the UAE (LLC or Freezone) and do not operate in Dubai and receive all income from outside UAE then you may qualify for exemption from VAT but you still MUST apply for this through the FTA. Banks will request this and may hold payments as a result. This is also known as zero-rated supplies.

4. Branches are not separate legal entities
Only the entity of which they are branches should apply for registration where that entity meets the relevant criteria. Even if you are operating via branches in more than one Emirate, only one VAT registration is required.

The guaranteed way to raise money for your small business

Business loans used to be the responsibility of the banks, but that is no longer the situation. Banks want to lend to companies that carry a low risk or have enough assets to secure against the loan amount.

Business loans in Dubai are even more difficult, especially since 80% of the population is made up of Expats that could exit anytime their situation changes either in Dubai or in their hometown. Not that they would leave without paying their debts………..

Small businesses are the lifeline of a any country but most small businesses struggle with cashflow and this can significantly hinder growth. Lack of funding is also required when a business ends up having to write off bad debt and lack of access to timely funding can cripple a business if that was to happen.

So how can a small business owner access funding in such a global market when they are competing not only with local competition but with a freelancer living on the other side of the World with less than half the overheads.

Good Practice for Business Owners

Investors, individuals or institutional, look for a number of things when making a decision to lend:

1. Owner – the individual behind the company is the most important, so become a likeable person and professional in your business endeavours. If you arrange a meeting, keep to it, if you need to make a payment do it straight away, if you make a promise, make sure to deliver on it. Your reputation will spread quickly within the business community and amongst your peers. These are the same individuals who could be contacted or approached for lending in future.

2. Accounts – maintain good accounts from the day you start and not when you need a loan. Maintaining accurate books is so important and should not be ignored. Try to use a cloud accounting software that gives you access to real-time management accounts.

3. Processes – create solid workflow in your business, get organised, paperwork goes in files not draws. Keep records well organised, maintain a CRM system if possible.
These are just the basics of any company and without these you will struggle to raise even the smallest loan.

Personal Loans

When borrowing for your small business it may be easier to borrow personally, especially if you are on an employee visa within your own company. Banks and Credit Cards (not recommended) will lend to employees with 3-6 months of salary proof.

The following are links to platforms that would be a good start to personal lending:
• SouqMal: This is a great place to start for personal lending. Applying through SouqMal will help you access hundreds of lenders in the UAE with just one application.
• MyMoneySouq: Another great platform to access hundreds of personal lending options with just one application. Review the lending rates and the terms all online before speaking to anyone.
• Friends & Family: Always the best and cheapest option, hence the reason to be a nice person 😊.

Business Loans

Banks are the last place we recommend for Business Loans, there are many small business friendly options and we analyse some of these below:

1. Friends and family. At the top of the list is friends and family. Consider approaching those who are employed rather than entrepreneurs. People who work have less time to consider creative investment options and usually end of storing their money in savings accounts paying less than 3% per annum. If you can offer them a return of over 5%-10% per annum then you could be a better option for most people who simply work and save.

2. Beehive.ae, consider going to people but through a platform. Beehive is a peer-to-peer lending platform that connects small business owners with investors without the need for a conventional intermediary. Its focus is on finance from AED 100k on repayment terms from 6-36 months. Check it out on www.beehive.ae

3. Eureeca.com, an amazing platform for those wanting to raise more than $200k. Launched in 2013 the team at Eureeca have helped many high growth businesses raise significant amounts. Check them out on www.eureeca.com

4. Dubizzle, What the…? I hear you ask, Dubizzle, Really? Well, Yes. Dubizzle is amazing platform in Dubai and posting in their business section for an investor, with as much detail as possible, does actually work. Just be careful to select the right person.

Although there are many other options I personally believe these are a great place to start, but remember to ensure the following information in place:

1. Access to a good set of accounts. We can help with that www.profitsplus.ae
2. Good processes, softwares, and CRM. Check out Zoho CRM
3. Try to keep the business in the blue by lowering overheads and increasing your fees. Only grow when it is justified.
4. Solid website will also help and a good positive online presence.

Good Luck with your fund raising exercise and do message me if you need any help. If you want to speak to an advisor to help you with VAT, Funding or Accounting then contact me, Ali Afzal, on +971585442030 or email me on [email protected]