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. 

  1. 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. 

  1. 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. 

  1. 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.  

  1. 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. 

  1. 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. 

  1. 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. 

  1. 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. 

  1. 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! 

 

Top 8 Administrative VAT Fines & Penalties in UAE Levied by FTA

Federal Tax Authority (FTA) is the only organisation of UAE that decides the amounts and percentages for fines and penalties every year and looks after all the tax procedures to resolve disputes. Companies are penalised upon finding a case of proven violation where they have either failed to fulfil the requirements or has breached the VAT (Value Added Tax) Law.  

Penalties come with brilliant discounts for offering an opportunity to companies to come forward and make their errors known. Or else, an audit will be performed, and if any error is found, they will be fined heavily. 

8 Fines and Penalties Under VAT 

  1. Failure to meet Registration Requirements 

The business should be mandatorily registered one month before reaching the turnover limits, only if the total amount of the taxable expenses crosses a registration threshold of AED 375,000. The unregistered business will be penalised with a late registration fee worth AED 20,000/- as per the VAT Law. 

  1. Late or no VAT Deregistration 

In case of failure to deregister in the specified time of 20 days (counting the days from the deregistration is applicable), a fine worth AED 10,000/- will be asked from a taxable person. 

  1. Problems with VAT Return 
  • A penalty of AED 1,000/- is applicable to the taxable person in case he fails to file or files for a VAT return after the 28th of the end of the tax period. If he forgets to file the return again, the fine is doubled to AED 2,000/- for the second time. 
  • FTA will levy two administrative penalties if the taxpayer voluntarily reveals errors in their previous Tax Return assessment through a disclosure form 211 and shows the under- or unpaid tax of AED 10,000/- or more. 
  • Fixed penalty worth 3,000 for the first mistake and 5,000 for making the same mistake the second time. 
  • Percentage-based penalty decided on the basis of the unpaid amount. 5% and 30% for making a voluntary- disclosure before and after getting an official notice of the tax audit, respectively. 50% of registrants who never use disclosure form and their errors are caught during the tax auditing.  
  1. Display of Prices  

An administrative penalty worth AED 15,000 applies to the taxable person who decides to display the price of the goods but disagrees with the Value Added Tax Law and puts the costs of the company’s supplies or services without tax inclusion. 

  1. Failure to Keep the Records or Submission of Information 

A VAT-registered person is held accountable for maintaining accurate documents to prove the authenticity of the official transactions. He must provide the genuine documents to Federal Tax Authority when asked. In case of carelessness, he will be charged: 

  • First time: AED 10,000/- 
  • Second time: AED 50,000/- 

If FTA asks for submission of financial records in Arabic and taxpayers fails to deliver, AED 20,000/- is levied. 

  1. Failure to Notify About Charge of Tax Based on The Margin 

A failure to inform the FTA about the total amount of calculated tax on selling used goods, antique pieces, or collectors’ items invites an administrative penalty of AED 2,500. It is essential to be transparent in trade due to the differences in profit margin observed between purchasing and selling prices. 

  1. VAT in Designated Zones 

VAT Laws are inapplicable in Designated Zones, but they have their own rules. The non-compliance to the rules will lead the taxpayer to an administrative penalty worth AED 50,000. In higher-level violation, the penalty increases to 50% of the chargeable tax. 

  1. Issues with Electronic Tax Invoices and Electronic Tax Credit Notes 

A penalty worth AED 5,000 (for each invoice or Note) is applicable on the taxpayers who: 

  • Was unable to issue Tax Invoice or Tax Credit Note electronically 
  • Was unable to meet the requirements for issuing accurate electronic Tax Invoice or Tax Credit Note 
  • Was unable to secure a valid copy of the original electronic Tax Invoice 

VAT Accounting Experts to Deal with Tax & Accounting Matters 

Are you looking for solutions to your tax accounting and VAT concerns? Profit Plus has skilled and highly experienced British accountants catering to your administrative VAT penalty issues.  

Taxing treatment for Non-Fungible Tokens (NFTs) 

Just like cryptocurrencies, NFTs seem to be gaining traction as well and their popularity is at an all-time high at the moment. It would only be appropriate to discuss how they are to be taxed. 

What are NFTs? 

An NFT is a unit of data that is stored on a blockchain which is a guarantee that the NFT is unique. This means the token is not interchangeable. NFTs run using the Ethereum Blockchain. Many experts claim that because of NFTs using Ethereum, the BTC crash of late did not particularly affect the trading rates of Ethereum Coin (ETH). Every token is quantifiable evidence of ownership of that specific digital asset. Although being a digital asset, it has been pushed as an asset to take ownership of assets in real life also. 

Types of NFTs 

There are many types of NFTs available on the market, let’s take a look at some of them: 

  • Digital art 
  • Games 
  • Collectables  
  • Music 
  • Film 

Now that we have an idea about the types of NFTs and their nature, let’s see how they are taxed for individuals and corporations. We will also shed light on VAT rules regarding NFTs as well! 

NFT Tax Treatment for Individuals 

Although there has been little word on how NFTs ought to be taxed globally, there is a consensus to go the cryptocurrency route and how they are taxed. Now, under that assumption, income tax is subjective to whether the GCC (Gulf Cooperation Council) can classify NFTs as a trading activity. 

For CGT (Capital Gains Tax), cryptocurrencies are classed as an intangible asset therefore it is safe to assume that it will be the same case when it comes to NFTs. If that is the case then, if one purchases an NFT with the intent of investment and then afterwards is sold; any gain on the asset after conversion of the sale price and purchase price into the AED rate will be taxed under Capital Gains Tax. 

In contrast, a loss on sale of an NFT can be balanced out against gains from other sources of capital that will be taxed under Capital Gains Tax. 

NFT Tax Treatment Concerning Companies 

For corporations also, the NFTs will be taxed just like cryptocurrencies. Under that assumption, the profits from trade must be calculated using fair practices. Moreover, if a corporation buys an NFT for investment purposes, the value of that NFT must be presented on the Balance Sheet as an intangible asset. Any proceeds from the sale of the NFT asset will be taxed accordingly. 

NFT Tax Treatment Rules per VAT 

It is expected that VAT is duly paid normally on any services and goods sold in exchange for buying an NFT. When the transaction takes place, the value of the goods and services in question will be the AED price value of the NFTs. 

When an international transaction involving the sale of NFTs takes place, it is crucial to track which sales are subject to VAT and vice versa. 

Conclusively, we would like to state that this is just an overview of the most probable tax treatment for NFTs. We hope the GCC gives us more updates shortly. 

For now, if you or your business own cryptocurrencies and need help with VAT accounting or a tax consultant for crypto, head over to ProfitsPlus for all your accounting and taxation needs! 

Can Business Analysts also be good Management Consultants?

Business_Analyst

The topic in question these days may be considered as a controversial one, that is, whether or not business analysts turn out to be good management consultants also. The main reasoning behind the controversy has something to do with the fact that there is no definitive answer to the question. But let’s shed some light and try to get to the bottom of this conundrum.

How do business analysts and management consultants differ?

Although there isn’t a perfect definition per se that can distinguish them as clear as night and day, first we must understand that in the practical world, jobs aren’t fundamentally supposed to abide by said definitions. An oversimplification perhaps but people in both roles are hired to solve a business problem with the pre-set aim of achieving something for the client.

Some people may not think that there is a clear distinction between the two roles. As consultants may also be made to do requirement planning, gathering and documentation. Which are the core functions associated with a business analyst.

Do business analysts make good management consultants?

If one were to describe the role of a business analyst according to a definition, then simply put, a business analyst is associated with IT in more than one way. In contrast, consultants, can potentially also work or perform their job in a non-IT related field of consultation as well. Though the lines which separate these roles are paper-thin, they are differences, nonetheless.

Again, before we rush and jump to any conclusions, it must be noted that this is entirely situational and not always the case. According to the CBAP handbook, consulting experience revolving around IT and tech does not fall under the umbrella of the CBAP experience criteria.

The book outlines what someone in this role is supposed to do.

– “Creating Project Plans and Identifying project risks, Weekly project status reporting, leading design workshops, creating project charter or system architecture, testing execution” etc.

In a way, the handbook forces you to be one-dimensional which isn’t always helpful. One should always try to learn more beyond the role, which can lend a massive hand in shaping a successful career. But CBAP excludes such work experience for good reason though. A major reason could be to differentiate between the PMP and CBAP certifications or any other certification related to the business field.

Fortunately, industry and firms are constantly in search of people with a broad skill set that extends further beyond their role. It is common knowledge that the roles of business analysts and consultants are never one dimensional. A firm would rarely decline a business analyst’s offer, or his wish to take more management responsibility upon their shoulders.

So do business analysts make good management consultants then?

As evident through the job market, business analysts can turn out to be exceptional consultants. Although in certain aspects analysts might have to overstretch to cover the fields of business processes or project management or even change management. If you are seeking to be an exceptional consultant, starting your journey through the business analyst route might be the best option and secret to success.

From a purely contextual point of view, business analysts may differ but in reality, they are sharing responsibilities, in a multitude of ways and different areas as well. Management consultancy can range from the process, strategy, operations, business analysts may fall victim to tunnel vision and limit themselves by only following the guidelines of the handbook.

Conclusively, let us not forget, certifications like CBAP or CMC are credentials that enable you to get a job. The practical experience gained in the field might differ a lot and keeping an open mind towards your opportunities might just do you some good as well.

If you’re a client looking for an accounting firm in Dubai for your consultancy needs and were confused between whether to hire a business analyst or a management consultant. We hope that Profits Plus has helped make your choice much easier, and if you’re still not sure, get in touch with our team. We are proud to provide the best management consultancy services by chartered accountants!

The Safeguard from Fraud, Embezzlement and Corruption

internal audit

Nobody likes or wants to be deceived, especially by those they place their trust in or have expectations from them to do the right thing. Fraud and corruption can be a massive PR blow for most corporations and enterprises. It can also prove to be detrimental to the self-image of the internal hierarchy and a lapse in confidence in being able to counteract against a fraudulent scheme. The PR blow may lead to a tarnished public image, job destination, organisational morale stooping and losses as well.

But what can businesses, corporations do to deter such schemes? The answer is simple, internal auditing! In recent times, internal audit has increasingly gained ground and companies find it very valuable in its capabilities. In-house internal audit departments or internal audit outsourcing can be used to ensure a check and balance of systems and procedures, risk management, while also providing recommendations to overcome weak areas

The nature of work entails having internal auditing, as well as the sensitive information required, most companies prefer an in-house team that deals with the audit process, rather than outsourcing.

Developing an audit and assurance department is an exercise that should be thoroughly carried out to guarantee the efficiency and acceptability of the department by other stakeholders involved with the company. Often, managers and sometimes the entire workforce of an enterprise may harbour hard feelings for the audit team and under such circumstances, an in-house team might not be best suited.

Although that might only be the case when the auditing team can’t keep its findings or workings under wraps, if the critical information is kept under lock and key while fully implementing recommendations, internal audit can be the tool a company needs to bring in change.

Steps to be taken

How the department is set up and the process in which the team carries its tasks is most important. The following are key steps that can be taken to ensure a successful set up of an internal audit department:

1. Obtain and discuss expectations from the department with senior-level management including the board and audit committee, involving required listing standards for listed companies. Non-listed corporations should consider voluntary compliance.

2. Get the audit committee to develop and approve a charter.

3. Formulate a proper budget and staffing model on how you want to hire. Also, do review what your competitors in the industry are doing while keeping in mind your own company’s policies.

4. Also generate reporting lines and regulations, while also establishing responsibilities of the internal audit department.

5. Find areas in your company that require auditing

6. Make sure to carry out the initial risk assessment with the management and audit committee.

7. Consider the need to comply with various statutory requirements within your environment for instance compliance with Sarbanes-Oxley Act for companies in the USA.

8. Make an internal audit plan which is suited to the risk assessment

9. Outline whether staff for the department will be hired internally, or outsourced

10. Plan and implement audit work required for the audit plan, including a system to examine and follow up on audit recommendations.

11. Keep on updating the risk assessment for varying conditions during the year

12. Always improve and modify the internal audit work-frame to meet changing needs of the company and management alike.

Once the department has been set up, the head of the department should ensure that the objectives of the department are reviewed and evaluated from time to time. Often, the department will be driven by the risk assessment results to develop certain intervention policies on its own. The head of the department can use a risk assessment questionnaire which is distributed to all heads of auditable departments to evaluate their risk exposures in a given time frame.

If you’re a newly established enterprise lacking an internal audit department and are actively searching for internal audit services in Dubai, check our service of Internal Audit.

Social Networking For Introverts

Social Networking For Introverts

Does the notion of networking at local business gatherings make you anxious, gets your heart racing and overwhelm you with a nauseous feeling? Well, I guess we’ve figured out you’re not an extrovert. So, promoting your business in front of an audience is not your thing. But guess what? That’s okay! You don’t have to be a social animal to build a successful business referral network. Here are some tips that can help you adapt business networking to your less “in the spotlight” personality.

Don’t worry about large social business settings. You can build an excellent business network by quietly helping to solve problems and as a result, make lasting business contacts. Here are three great ways to get you on the road to building an excellent referral network that can help grow your business:

Expanding your Business

1. As you come across prospects for a business with whom you would like to network, make the referral and send that business (owner or salesperson) and email or note letting them know you gave them a referral and who you referred.

2. You probably cringe at the idea of business networking groups and their breakfast meetings, but do you take part in any social activities? You can still network in social situations and use those activities to build your business referral network! Maybe you’re in a local recreational activity (poker game with friends; quilting), local organization or cause, hobby (fishing; boating), or sport (tennis; cycling).

3. These are all opportunities to develop friendships with people who have a common passion or interest like yours, help each other on a social level and eventually develop some networking opportunities. It is positive to note that at least some of these people you meet will own a business or be in sales and could use referrals. This is an example of “doing what you love” and using that passion to build valuable networking relationships.

4. Some connections can eventually help you get more referrals and grow your business. An important thing to remember in these situations is to have fun first, make friends, and enjoy social activities. Use natural opportunities to seek referrals (both giving and getting). And don’t force any situation. Building your business this way is often slow but can also yield very good results over time.

5. Consider an online business referral network that allows you to connect with local business people whom you can meet and create referral relationships. These online networks don’t make you go to meetings or do presentations like the local groups that gather weekly. If you join an online site, most of your interactions will be through their website. However, we recommend that you periodically talk to each business member in the network you create on at least a quarterly basis, if for no other reason than just to say “hi” and see how their business is going.

6. It’s a great opportunity to ask them if you can help them with anything in particular, and also update them on your business. It’s important to realize that the internet doesn’t necessarily replace the phone and/or in-person interactions that you may need to make long-term business networking a real success. The internet simply enhances your ability to network and automates some of the tasks.

8. Business networking doesn’t have to be about weekly group business meetings, presentations or putting yourself in very uncomfortable public situations. Great business networking is simply about helping people solve problems. By referring someone to a good business you are helping them solve an issue. By providing a referral to a good business that you know, you are helping them solve the problem of getting new customers.

9. When you solve problems, people remember you and often try to help you in return. Business networking, especially when it involves the passing of a referral, is about trust. Trust is built over time. So, don’t worry about getting thrown into a random group of people at a local networking group.

10. Seek out specific businesses that you trust and network within social activities that you enjoy. Online business referral networks that are made up of local members are also a non-aggressive, “soft” way to find businesspeople who might like to be part of your referral network.

Using any of these methods can help you on the path to building solid relationships that can help grow your business by getting more referrals. And if you’re still having trouble with your business expansion, then get a quote from business setup consultants in Dubai asap!

Standard Operating Procedures – A Key to High Efficiency

In a business set up Standard Operating Procedures commonly referred as SOP’s are instruction manuals that can help lead your setup into an efficient working system that can strive forward.

4 Quick Tips on how to create an SOP

Standard operating procedures refer to the step by step instruction manual that helps your business organisation run its operations efficiently. The step by step instructions are designed differently and separately for every task that has to perform in a company. All SOPs must be clear, concise, and easily understandable so that the tasks can be performed in an efficient manner without time being wasted in confusion upon technical terms or unclear descriptions.

Now let’s talk about the tips.

  • Good and effective communication with department heads

Different tasks have different merits and different requirements. There is no one shoe fits all while working in an organization. Talking to the department heads gives you insight on all the activities and special events that are going around in the company. Every department head is well acknowledged with the nature of those working under them. Consulting them can give you the best ideas on how to construct the SOPs with the best practices and methods that can help handle challenges and situations. It’s a good practice to take disagreements as positive outcomes of meetings as they jus help u gain more knowledge on how to go about to avoid further problems.from the communication with the heads you can outline the most essential policies that will allow you to smoothly run your business and achieve the desired level of profits.

  • Organizing the outline you’ve made

Organizing the outline in a logical manner is very important. The most effective way in many cases is to number them out. This is of major help as it instantly references major and specific policies from different sections in the document. Having clear numbering with subsections is a great way to collect everything in one place in an organized manner. Having a glossary is useful so that all terms are understandable to all. Having an index can also help to look for specific sections in the document.

  • Assess the clarity of your SOP document.

Before making a final document and circulating it within the organization it is important that you make sure that all policies and instructions are clear and easily understandable to all. An easy way to make this assessment is to check whether a newly hired employee can understand the instructions that are quoted on the document. If new employees have problems deciphering it and continuously make errors you may need to revise your document so that it is less confusing and more effective.

  • Consult with your counseling firm.

Having a counseling service review your document can help a lot as they have experts that can review your document and guide you on what you need to do. They can more easily identify where you are making errors and can help guide you with how to create processes and procedures that are designed as manuals for payroll, HR sales, purchases, etc. They also provide guidance for initiating internal laws for staff training.

 

Part-Time Accounting Services: A Wonderful Alternative for Start-Ups in Dubai

CFO

In the last few decades, UAE has seen a remarkable investment boom. As a result, demand for accounting and bookkeeping services has skyrocketed in Dubai

That is unsurprising considering how the UAE government has been consistently following a policy of trade liberalization to draw in investors, entrepreneurs, and business owners to Dubai.

Aspiring business owners took to all the possibilities the ‘City of Gold’ had to offer and began the painstaking process of converting their blueprints into actual businesses

And thanks to the world-class accounting companies in Dubai, their books were the last thing they had to worry about.  This success story highlights the indispensable role accounting functions play in company formation and business setup.

Part-Time Accounting Services for Startups

Clearly, accounting and bookkeeping services are essential. It would be impossible to establish a business – much less run one – if you do not have updated financial records

At the same time, most start-up founders already have too much on their plates – and acquainting themselves with complicated accounting rules and conventions from scratch may not be the best use of their time.

Most business owners rely on in-house accounting departments or hire outsourcing companies to offer financial insights and keep their books in order.

While both these options work wonders for established businesses, full-time accounting is a ridiculously expensive option for start-ups and newly hatched SMEs with limited budgets.

Part-time accounting is the perfect solution for new businesses because it allows them to harness the benefits of accounting flexibly and economically.

Here are core reasons why you should consider availing part-time accounting services for your start-up (if you aren’t already!):

  • Save Money

Part-time accounting services have gained popularity in Dubai because they are more cost-effective compared to full-time services. Affordability is a major metric for startups that are just testing the waters or still in the incorporation phase.

If you establish an in-house accounts office, you will have to pay for the overheads, wages, and supplies. Similarly, an accounting outsourcing company may charge a fortune for handling your accounting tasks.

Part-time accounting is an ideal solution for such situations. Not only would a professional accountant be there to comb through your financial records, update your statements and ensure that you comply with financial regulations, but they would do it at a lower rate, allowing you to save money and invest it elsewhere.

  • Save Time

Part-time accountants have fixed work schedules. They will spend a specific number of hours working on your book.

Since part-time accountants have to do all that’s necessary to update your financial records within this window of time, they are great at meeting deadlines. Therefore, hiring the services of a part-time accountant is the best way to save time and get work done efficiently,

Also, if you have a professional accountant to handle your transactions and audit your records, you save time that you would have otherwise spent pouring over your financial statements.

  • Employee Training

Hiring a part-time accountant will help create a healthy organisational culture centered around knowledge sharing, allowing you to optimally utilize onsite human resources.

A part-time accountant will only work for limited hours, but they can provide training to your employees and help them develop an in-depth understanding of the core accounting functions your organization makes use of.

At Profits Plus Accountants, our expert accountants accomplish this by using Xero, a leading accounting software in Dubai that enables businesses to go paper-free and bring down their accounting costs.

Our accounting specialists teach your staff to use Xero to handle relevant tasks and generate financial reports, so the work does not get disrupted in the absence of an accountant.

  • Immeasurable Flexibility

Flexibility is one of the biggest plus points of hiring a part-time accounting expert. That’s because accounting tasks and requirements vary, depending on several factors including the size and nature of business.

Flexibility is especially important for new businesses that have yet to gather financial data, analyze their performance, and create internal protocols.

To hire a full-time accountant in Dubai, you will have to pay them fixed wages and enter into a year-long contract with them.

Part-time accounting is more flexible in comparison. The contracts are more short-term, and you can easily request relevant changes in your plan.

 

Profits Plus: Part Time Accounting Services in Dubai

Profits Plus Accountants is one of the leading accounting companies in Dubai. All our accountants are ACCA-qualified professionals with decades’ worth of experience. Get in touch if you want to know more about our part-time accounting services.

5 Ways Outsourced Accounting Can Benefit Your Dubai Business

Accounting is a time-consuming task that requires prior practice, knowledge of accounting conventions, and, most of all, patience and consistency. For the layman, accounting may be tedious and even boring but for the business owner, it is nothing short of a necessity.

Accounting is crucial for anyone running a business. It allows business owners to track their revenue and expenses, ensure compliance, and obtain valuable financial information that can be used to make core business decisions.

But while accounting is invaluable because it allows you to track your expenses, chart your revenues and set a direction for your company, it is like a whole new language that most business owners do not have the energy or time to learn.

That’s why they rely on professional accountants to navigate complicated accounting rules, carry out painstaking computations and help with financial goal setting. One way to do that is establish an in-house accounting department to handle your books. This can only be done if your company is financially secure and you can afford hiring an internal accounting team.

Setting up an internal department to handle accounts is not such a great option for small to medium enterprises (SMEs) and start-ups because of many reasons, budget constraints being one of them.  In recent years, many accounting outsourcing companies have sprung up in Dubai to assist such businesses with day-to-day bookkeeping, managerial accounting, auditing and more.

What is Outsourced Accounting?

Outsourced accounting is just like in-house accounting – except you’re outsourcing your accounting and bookkeeping tasks to a third party like an accounting firm in Dubai.

Your accounting company will then handle all your finances and bookkeeping tasks, much in the same way an internal department would have done.

Outsourcing your accounting is a great option if you own a SME or a new business. It allows you to benefit from expert input as well as all the features of internal accounting, but at a lower cost.

5 Amazing Benefits of Outsourced Accounting

Here are five reasons you should consider hiring outsourced accounting services  in Dubai:

  • Accounting Advice from Experienced Professionals

If you want advice from the most experienced professionals in the accounting sector, you should seek help from accounting outsourcing companies in Dubai.

The best accounting firms only recruit experienced accountants and financial experts with authentic field experience and diverse portfolios. Most accounting specialists working for accounting outsourcing companies are competent professionals who have worked with businesses from many sectors.

Compared to in-house accounting specialists who will only be able to resolve select problems associated with their field of expertise, professionals who work for outsourcing companies will be able to creatively engage with and solve a greater range of accounting problems.

  • The ‘Price’ Factor

One of the major advantages outsourced accounting has over conventional in-house accounting is lower cost. To set up an in-house department, you would need space and funding for recruitment as well as training. You may also require additional resources like accounting software and office supplies.

Once you have an in-house department that is functional, you need to pay a fixed sum to sustain it. This money would be spent on wages, supplies, and maintenance. In comparison, if you have outsourced your accounting function, you won’t need to worry about any of these expenses.

You can also save money by opting strictly for services that your business requires. Most accounting outsourcing companies allow business owners to pick and choose services they require and create flexible and bespoke accounting plans that cater to their specific requirements.

  • Ensuring Compliance

Accountants who work for outsourcing companies are never out of practice. They are well-versed in accounting rules and it is a part of their job requirement to remain updated with the latest accounting rules and conventions.

One of the key jobs of your accounting experts is to ensure that your business is complying with all the accounting requirements and regulations. In Dubai’s dynamic environment, staying abreast of such developments is vital, especially since not complying with rules can result in fines, penalties, and even huge financial setbacks.

Hiring an accounting outsourcing company can help you navigate the financial landscape in Dubai with relative ease and ensure compliance with legal requirements.

  • Boosting Productivity

Hiring the services of an outsourced accountant can lead to a boost in productivity. That’s because you have a panel of seasoned financial experts pouring over your statements and offering valuable insights about where to put in resources and where to cut costs.

Accountants do not only perform audits and offer advice, they also help organizations set realistic, concrete and data-driven goals. They will also help you budget effectively.

  • Effective Time Division

Bookkeeping is a complicated task that requires expert attention. If your employees are currently handling your financial records, outsourcing your accounting to professionals can help you save a lot of time.

Once you outsource your accounting function, you can redirect the attention of your employees to different essential functions and move towards effective time division.

 

Looking for Accounting Outsourcing Companies in Dubai?

Profits Plus Accountants is a leading accounting firm that offers a wide range of expert accounting services to businesses across the UAE. All our accountants are ACCA-qualified professionals with decades’ worth of experience. Get expert advice  now!

When to register your business for VAT; Voluntary or Involuntary

The world of tax as it applies to you and your small business is an incredibly important one, and yet often more than a little confusing; one of the areas that seem to confuse most is that of VAT (value added tax). Most business owners know that they must register their business for VAT but are a little unclear as to the exact rules. If and/or when one should register for VAT is a common question that many businesses would like a simple answer to. Most accounting firms in Dubai will offer you different types of registration, so be mindful of whom you pick.

There is in fact more than one type of registration, which is probably what confuses people; ‘compulsory registration’ is, as its name implies, the point at which the law says you have to register your business. Here in the UAE, this is when the value of your business’ taxable commodities and services reaches £70, 000 in a year. As well as the previous twelve months, the law also states that if you are aware that you will reach this figure in the next month you are also obliged to register.

You are obviously not obliged to register for VAT if your business does not reach this threshold, but many businesses do choose to do so; this is called ‘voluntary registration’ and it has both advantages and disadvantages.

One of the reasons that a business may choose to voluntarily register for VAT before they reach the UAE threshold is that when a business regularly invoices other VAT registered customers they are able to claim back some or all of the VAT charged on their purchases.

Voluntarily registering your business accounting for VAT can also improve your business profile by leading other businesses to infer that you have a much higher turnover than you actually do. This will open streams of business to you from those wishing to do business only with larger concerns as they include you in the mix.

However, once you have registered for VAT you will be required to submit a VAT return each year; adding to your business’ paperwork and form filling obligations will obviously add to your workload; something to be considered if you are a small business owner struggling with an already full-time table.

It is not recommended that you voluntarily register for VAT if your only customers are the general public, who cannot claim back the VAT that they pay, as you will have to add an extra 17.5% to your prices, which could make you uncompetitive, better then to wait until compulsory registration kicks in, at which point your larger turnover may allow you other ways to increase your commerciality.

Whatever size business you have, making a decision about when to register for VAT without first sitting down with your accountant and discussing all of the options open to you would be fool hardy to say the least; most accountancy professionals have a good working relationship with HMRC and an in-depth understanding of the benefits and disadvantages of each alternative, so use their knowledge to make the best decision for your firm.

In simple terms, you must register for VAT if your business is over the VAT threshold, but if it is under it you have a choice; choosing to register voluntarily is beneficial for some businesses and less so for others, but the ways in which this will affect your own business are probably best explored by someone with an understanding of its financial history and its future forecasts.

The main advantages of voluntary registration:
If you are charging business clients who are VAT registered themselves (not the general public), then if you choose to register for VAT this will represent “money in your pocket”, as you can claim the VAT back on some or all of your purchases. Your customers will not mind as they can recover all the VAT back you charge them on your invoices.

Being VAT registered is sometimes viewed in a more favourable manner by other businesses. They may assume that you are VAT registered because you have a higher turnover, even though that is not the case. In essence, being VAT registered could mean that other organisations view your business as more credible.

If you are a business where most of your supplies are zero rated for the purposes of VAT, then it may be worthwhile voluntarily registering, as you will be in a repayment situation each month and can claim the VAT back that has been charged to you.

The main disadvantages of voluntary registration:
If you register for VAT you will be required to submit VAT Returns, and also account for all the VAT on your taxable supplies and purchases, as part of your record keeping. This extra administration can cause a drain on your time and an additional stress if you are a small business.

If you register for VAT voluntarily but your customers are the general public, then you will need to add on 17.5% to your prices; they will not be able to claim this back and therefore this represents a real hike in the cost of your services to them. Therefore, from a commercial point of view, this may not be a good idea as you may price yourself out of your market.

Like all other decisions, as regards tax and accounts compliance, you should make sure that you fully consider all of the consequences before you make a final decision. It is crucial that you consult with your accountant, so that he can look at whether or not it would be beneficial for you to voluntarily register for VAT based on your own circumstances.

So, you’re looking for accounting companies in Dubai, or more specifically a VAT accountant, then check this out!