Pointers on Maintaining Proper Bookkeeping
In our recent blog, we have shared insight on what is bookkeeping and its importance.
The businesses need to hire trustworthy bookkeeping services in Dubai and qualified accountants to prepare and maintain business’s books of accounts and need to check if it is in compliance with the International Financial Reporting Standards [IFRS]. Most of the business in order to save money on hiring an in-house accountant, they outsource their account and bookkeeping.
The book of accounts needs to be kept in a way that satisfies both the UAE Federal VAT Laws and IFRS. According to the UAE Federal Law,the firm ought to keep upits books of accounts for a minimum of 5 years. These accounts are to be maintained at the head office of the organization. Electronic duplicates of the archives can also be kept following the rules and regulations set by the ministerial decision. The periodical and annual reports should be prepared under the IFRS in order to show a precise Profit and Loss status of the firm.
Adding to the above, the UAE VAT Law also states that bookkeeping records and accounts must consist of the followings: –
- Balance Sheet.
- Profit and Loss Statement.
- Wages and Salaries Record.
- Fixed Assets Register.
- Records of the inventory statements at the end of relevant tax periods
If a running business fails to provide any essential records on request, a Penalty of AED 10,000 will be imposed for the first time and if violated for the second time AED 50,000 will be levied.
As indicated Article 26 of “Federal Law No 2 of 2015 on commercial companies”
- Companies must maintain their accounting records having each and accurate transactions with all financial details. The owners must ensure that books of accounts of the company are maintained as per the company’s Law.
- Companies must maintain their accounting books at their head office for at least 5 years from the end of the financial year of the company.
- Each company must have an electronic copy of the original of the documents and records as per the guidelines provided by the Ministerial Decision.
As indicated by Article 87 of the Federal Law, no 2 of 2015 on Commercial Companies, the chief of an organization is needed to set up the yearly financial plan and the profit and loss account. The company is needed to accumulate a yearly report on the financial status of the organization and give suggestions on the circulations of the profit of the General Assembly, within 3 months from the end of the financial year.
Some pointers on making bookkeeping easier and less stressful are:
- Allocate time and devote to bookkeeping either through in house accounting or outsourcing.
- Open a new business bank account for business expenses and earnings and keeping the private transactions away from the business account.
- Use accounting software to meet your business needs.
- Make all your tax as well as compliance obligations right.
- Keep track of Accounts Receivable or Accounts Payable.
- Keep a good bookkeeper.
Conclusion
Maintenance of books of records and relevant records are vital prerequisites for proper management and control of the business tasks. This will encourage the right receipt and payment of money and different exchanges entered by the company. It is required for each taxable individual to keep up books of records under UAE VAT law having complete details on yearly records, general ledger, purchase day book, invoices issued, invoices received, credit notes, debit notes, VAT Ledger, and so on. If planning to outsource and thus saving cost and time, do not hesitate to get in touch with us.
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