One of the keys to successful business operations is keeping precise records. Maintaining accurate financial documents and statements helps business owners make sound decisions while complying with applicable laws.
Businesses should be mindful of accounting services in Dubai and their significance to them and comply with UAE record-keeping regulations. Companies or firms that still owe records after six years will face penalties from the federal tax authority.
There’s no need to fret; there’s an easy solution for every accounting process. Let’s explore financial records and their significance in UAE-based businesses before discussing professional accounting services available in Dubai to keep their accounts in order. You could always hire professional bookkeepers like those offered by Pro Accounting Solutions, which specializes in bookkeeping as per UAE Federal Law, to manage them for you.
Businesses must maintain accounting records that accurately depict transactions within their organization to demonstrate their financial position and ensure their stakeholders that books of accounts are being kept up. Accounting services in Dubai also specialize in this service and must maintain their books of accounts according to UAE laws and regulations outlined in Federal Law No. 2 of 2015. Article 26 provides requirements for maintaining accounting records in the UAE.
Businesses in the UAE should keep an electronic copy of all records and documents for at least five years from the end of their fiscal year, starting with books of account at their main office.
Companies must abide by International Accounting Standards and Practices when creating annual accounts or periodicals that demonstrate the losses and profits of the business. Preparing accounts involves several responsibilities.
Your business corporation or company’s manager must create and submit an annual budget, maintain a profit-and-loss account, and compile an annual report assessing the organization’s financial position and providing recommendations regarding the distribution of profits within three months after the closing of the financial year.
Stay compliant by seeking out top accounting services in Dubai.
Administrative Penalties for Noncompliance as Per UAE Law
- Under Article 348 of Federal Law No. 2 of 2015, businesses are required to ensure their books of accounts comply with legal requirements. Failure to do so would incur a fine between AED 50,000 and AED 500,000 for violators.
- According to Article 349 of Federal Law no 2 of 2015, companies must keep accounting records at their head office for at least five years following the end of their financial year – or face penalties between AED 20,000 and AED 100,000 for failing to do so.
How you can avoid penalties and remain compliant
The key lies in choosing an efficient bookkeeping system – accounting firms in Dubai always use one for record maintenance purposes, so choosing the most effective bookkeeping system should help. Now, let’s go back to how to select the appropriate system. I recommend the article “Choosing the Ideal Bookkeeping System ” from Forbes Magazine as your starting point.
- By investing in an efficient bookkeeping system, you can maximize efficiency. It will ensure your books remain up to date.
- There are plenty of solutions on the market that track cash flow, from simple products that do so too costly software packages with more intricate features than those provided by their counterparts.
- QuickBooks, Xero, Sage One, and FreshBooks are among the more widely used accounting solutions to consider in UAE. Our experienced accounting team will keep everything organized no matter which software is chosen.
- Establish a Record-Keeping Schedule Implementing a regular recording schedule will simplify managing financial records, as you’ll be able to identify issues with cash flow more quickly and accounting problems earlier. Some issues could incur severe penalties; therefore, it is wiser to follow the best bookkeeping practices to remain compliant.
- Reconcile Bank Statements Regularly
- Accurate financial records must be kept. One way of making this easier is bank reconciliation statement maintenance; accounting firms in Dubai would advise reconciling bank statements periodically throughout the year as an essential element in record keeping. Unfortunately, many businesses remain ignorant about bank statement reconciliation.
- According to FTA estimates, approximately 30 percent of businesses operating in the UAE must regularly perform bank reconciliation. If this practice fails to occur, FTA imposes penalties of up to 20% of any additional tax payable and an AED 20,000 fine may be levied against your company.
However, we understand you want to avoid falling foul of the Financial Transaction and Reporting Act (FTA). Therefore, when hiring accounting service providers in Dubai, they must remain compliant. At ebs, we can assist by keeping all parties compliant – here’s how.
- Businesses looking to keep accurate financial records should seek professional assistance; however, laws and filing regulations vary according to the rules of the government authority in UAE; for instance, free zones have different requirements than FTA. Therefore, utilizing bookkeeping and accounting services in specific locations is critical.
- ebs can help! Our professionals will handle your accounting and bookkeeping tasks efficiently. ebs is considered one of the leading bookkeeping firms in Dubai and prides itself on offering user-oriented accounting and bookkeeping services tailored specifically to clients’ requirements; their team gets to understand your niche/condition before adapting services accordingly.
- ebs is the top accounting firm in Dubai and offers superior accounting services, such as VAT auditing, due diligence auditing, and many more. To get in touch and book a consultation session – don’t wait; reach out today, and book one for yourself.
