Running a business in Dubai (or anywhere around the world) isn’t easy with how fast-paced everything is. And one of the most important aspects to maintain smooth operations is your company’s financial health. From auditing to accounting steps, there are plenty of ways to ensure everything works well. However, accountants need to conduct the financial equivalent of a medical check-up, aka an accounting health check! So today, we’re gonna give you 10 reasons you need to do it, as well as who can do it for you.
TL;DR
- An accounting health check is a review of how accurate your financial records are
- Its main goal is to find errors in the books that could lead to non-compliance
- It’s an important tool before expansions, mergers, and audits
- It ensures compliance with UAE tax and VAT regulations
What Is An Accounting Health Check?
An accounting health check is a deep inspection of your company’s financial records and processes. It’s like the financial equivalent of a medical check-up. The goal is to find problems before they get serious with no way to rectify them. It’s especially important in Dubai and in the UAE to ensure compliance with VAT and corporate tax laws! An accounting health check is basically an internal review to ensure that your company’s financially healthy.
There are two types of audits: internal and external. The internal review is usually done by the business itself. Meanwhile, the external review is required by authorities. An accounting health check is an internal review with the level of detail of the external one. That way, your business can stay a step ahead in the financial game.
What Does an Accounting Health Check Include?
An accounting health check includes several actions to ensure that everything is working flawlessly. For example:
- Analysis of accounts receivable and payable
- Bank reconciliation assessment
- Thorough review of the entries of the general ledger
- VAT filing verification
- Accounting standards compliance check
- Check for missing entries
When Should You Do It?
A thorough review like this is needed under the following circumstances:
- Your business experienced rapid growth in the past year
- A merger or a potential investment is on the horizon
- You haven’t done account reviews in more than a year
- There are inconsistencies in your accounting books or problems with cash flow
Why Does It Matter in Dubai?
As we already mentioned, Dubai has strict regulations when it comes to VAT and corporate tax. Failing to comply could lead to penalties and more, depending on how severe. In addition to compliance, an accounting health check is a great preparation before an external audit. And naturally, keeping an eye out on it all helps business owners have a clearer idea on how to make financial decisions. That will eventually help the company grow, restructure, and even find potential investments.
10 Reasons You Need an Accounting Health Check
- Error Detection: Accounting health checks find mistakes in financial records before they lead to bigger problems.
- Compliance Assurance: It ensures that the business stays compliant with VAT and corporate tax laws.
- Audit Prep: This review protects you from surprises that might creep up during external audits.
- Financial Accuracy: Ensures that your financial reports are accurate and properly reflects the financial health of your business.
- Avoid Penalties: Staying compliant with all the laws helps you avoid unnecessary penalties and legal problems.
- Better Internal Controls: Conducting health checks makes sure that there are no weak links in your process to avoid potential fraud.
- Enhanced Decision-Making: Better financial health and accuracy helps owners and shareholders make better decisions for the business.
- Business Growth: All this leads to the success of the company and ultimately to its growth.
- Investor Confidence: Well put–together financial records can make current and potential investors trust the business and its operations.
- Benchmark Performance: An accounting health check is a good benchmark to compare against in the future.
Here’s How Noraal Can Help!
To sum everything up, an accounting health check is crucial for your business. It’s a preventative measure that will help you save money and make your business stronger in the long run. So, if you wanna get there, you’ll need to find the best service to help you out. Luckily, that’s what Noraal is here for! We’re here to help startups and SMEs get peace of mind when it comes to their financial health. If you want that too, contact us today to schedule a consultation and take your business to the next level!