Many entrepreneurs and small business owners, particularly those who just starting out, do the majority of their accounting in-house. This isn’t always easy because so much data must be properly maintained and recorded, from profits to expenses to taxes. Keeping track of the financial side of the business–from income to expenses to VAT compliance–can be difficult.
Mistakes are common and can have serious impacts on your business.
The accounting department is one of the most sensitive in your company. So, here are the top five accounting and bookkeeping mistakes that businesses should avoid at all costs in order to run smoothly.
It is common for businesses to misplace receipts or fail to record minor expenses. Keeping accurate records on a regular basis can help you save time and money. In case of an audit in Dubai, UAE, accurate records could end up saving one from incurring penalties.
Whether it’s a small payment or a large transaction from customers or clients, it’s critical to ensure that every financial transaction is properly recorded and categorized in your accounts. To do your bookkeeping and accounting correctly, you must have excellent organizational skills.
You’d have to keep track of every transaction, keep receipts or digitize them for future reference, accurately calculate VAT, and more. If your records are not kept organized and up to date, it is very likely that you will overlook something out, otherwise it will get you into trouble during VAT submissions.
Check your bank account balance on a regular basis as you record your cash flow and other financial data into your books. If you discover a gap, it is likely that there is a mistake somewhere that needs to be corrected, or that a fraudulent transaction occurred. Taking immediate action will help you avoid larger problems in the future.
Auditing in Dubai, UAE necessitates keeping detailed records of business-related expenses separate from personal expenses. Make sure your bank statements are properly reconciled each month to reduce errors and identify potential problems.
You undoubtedly have a lot on your plate as a business owner, and accounting can quickly fall to the bottom of your seemingly never-ending to-do list.
That is why it is critical to create an accounting plan in order to track your recent income and expenses. If daily updates are not possible so at least schedule accounting tasks for once a week.
Minor transactions, such as office supplies picked up on your way to work or a freebie sent to a loyal customer, can be easily overlooked. However, regardless of how minor you believe the transaction is, it is critical to keep a record and obtain a receipt. In the event of a tax audit, you must be able to present records of ALL business expenses, including minor ones.
Small business owners often try to save money by performing their own accounting and tax preparation. In reality, not hiring a professional can cost a lot of money.
“Spending the money to hire a professional means you’ll have an expert who knows what they’re doing and can apply the best strategies for your financial situation.” They can keep you up to date on the ever-changing tax laws and assist you in planning for potential tax increases.
This allows you to focus on the most important aspects of your business. You can focus on what you do best by delegating the extra work to an experienced professional. Remember that professional accountants have more knowledge and resources, so requesting their services is a safe bet.
While being aware of these common accounting errors may assist you in avoiding them, the most convenient and efficient way to stay on top of your business finances is to entrust your accounting to the professionals. Our experienced accountants can integrate the best cloud accounting software for your company and even train your in-house staff on how to use it properly.
Every company in the UAE must keep a record of all financial transactions, especially since the implementation of VAT in 2018. Decision Management Consultant is a well-known accounting firm in Dubai, UAE. DMC’s accountants are well-qualified, experienced, and certified professionals who can assist an organization in growing and complying with local and international regulatory requirements. DMC’s accounting team can also examine your cash flow requirements and ensure efficient financial management. Using DMC services can help you avoid costly accounting mistakes and increase the profitability of your business.
Let us allow to assist you by doing what we do best so that you can return to doing what you enjoy and focusing on growing your business. Please contact our team to see how we can assist you.