eCommerce Accounting in UAE – A Comprehensive Guide
“The e-commerce industry is a force that no investor can afford to ignore” – Cushla Sherlock
eCommerce is the new normal across the globe and with the pandemic striking strong, the demand for online shopping, marketing, and selling online has increased exponentially. The digital awareness, choice to stay online and venture into different eCommerce activities has become a preferred choice amongst many.
And especially in the UAE, where there is a strong pull for getting digitally active, eCommerce activities are going great guns. As we understand, eCommerce focuses on the buying and selling of goods, products, and services over the Internet through different electronic payment methods.
In the UAE, eCommerce has witnessed heavy growth over these years. In UAE, revenue in the eCommerce market is projected to reach US$12.79bn in 2022. Revenue is expected to show an annual growth rate (CAGR 2022-2025) of 10.40%, resulting in a projected market volume of US$17.21bn by 2025.
The eCommerce arena has made round-the-clock buying and selling easier, faster, affordable, and reachable without any location/geographical barriers. The way operating business has changed, managing, and maintaining eCommerce accounting has also evolved over the years. Though the accounting rules and regulations remain traditional, synchronizing it with the eCommerce portals has turned complex and vital. Applying these traditional regulations to online sales activities is the main crux for eCommerce accounting services in UAE.
Maintaining proper books of accounts for eCommerce businesses is mandatory in UAE keeping in mind the free zone regulations and mainland company laws. In fact, having a proper and organized accounting portfolio helps businesses execute their activities smoothly.
What is eCommerce Accounting?
eCommerce accounting refers to managing and maintaining the book of records, accounting transactions and other activities for all those transactions that are happening through the Internet. It considers all commercial online transactions that are taking place via different channels across the globe. Accounting for eCommerce must comply with the standard accounting rules and regulations that are being followed, to track, record, reconcile and report all types of transactions.
Why is Accounting for eCommerce Required?
A thorough accounting system for eCommerce transactions is a must because of the following reasons:
- Data access for inventories, transactions etc. is highly important to maintain and since they happen online, availing accurate accounting information is tough
- Order and inventory management through different distribution channels (online and offline) is a challenging task
- Organizations must look at handling payment reconciliation, tax calculations, shipping logistics, payroll compliances through accurate processes
- Company’s daily financial information must be up to date and secure
- Calculation of sales tax liabilities and other taxes is a must
- Handling processes like sales return, customer payments, eCommerce reporting systems, budgeting and forecasting, performance and business model evaluation, assessment of key performance indicators.
How to Manage eCommerce Accounting in UAE Effectively?
UAE has been a golden hub for handling eCommerce businesses with attractive digital transformation techniques. Here are certain steps taken by organizations, in accordance with government rules and regulations, to manage eCommerce accounting effectively:
- Implementation of specific software solutions that take care of all needed eCommerce accounting and bookkeeping processes
- Taking appropriate guidance from experienced accounting solutions provider who can help bridge the gap between the eCommerce market requirements and the UAE government regulations
- Viewing a variety of real-time reports on any kind of device for better decision making
- Integration of accounting solution to other system
- Accurate tracking of all payments through payment gateways
- Tracking and maintaining transactions like weekly/monthly/yearly expenditure statement, total revenue statement, company’s assets and liabilities, equity statement and sales returns/receipts
Key Benefits of Outsourcing eCommerce Accounting Services for Your Business
Normally, all organizations do have their own accounts section but as the world of digitization expands its horizons and as the scope of business keeps widening, it becomes difficult for inhouse accounts teams to keep up with the requirements that match up to the business standards.
That is where the need for experience and expertise comes into picture and that is where outsourcing your eCommerce accounting services will work wonders. Here are some of the key advantages that you will witness, by taking help from skilled accounting partners:
- Affordable and cost-effective with inbuilt skills and experience
- Saving on time and efforts with stringent focus on other important tasks
- No need for extra training or guidance for getting work done
- Availability of latest financial and accounting information
- Less risk for any kind of financial or accounting mishap
- Easy to take futuristic business decisions
- Helps in achieving business success and maximizing revenue
- Instant access to desired resources in the field of accounts and finance
We @ HBC Are Here to Assist You
Looking at the high demand of accounting services in UAE and the challenges that organizations face, seeking advice from an experienced and multidisciplinary team of specialists well-versed with different types of transactions that demand complex technical accounting and financial reporting analysis is the apt decision to make.
Organizations confront numerous accounting problems in this swiftly varying regulatory situation. It is important to have ready accounting documents for clear and restructured financial outlook of the business, which assists in competently defining the business value and brand equity. What you need is proper organization of accounting records, seamless integration with other systems that helps in removing manual tasks through automation. You need different accounting records like stock reports, auto reconciliation, sales reports, payment gateway integration etc. for effective maintenance of accounting records.
At Horizon Biz Consultancy, we offer the best of eCommerce accounting services in the whole of UAE. We operate as outsourcing eCommerce partners assisting you with a variety of tasks like develop/modify accounting entries, prepare financial statements, perform audits, offer financial reporting statements, forecast data along with risk assessment. We make optimal and highly secure use of your organizational data to grow your business online and assist in planning the best of business activities for further growth.