SMEs, or Small and Medium Enterprises, are a vital part of Dubai’s economy. In fact, they make up 40% of Dubai’s GDP! And according to forecasts, there will be around 1 million SMEs in the UAE by 2030. Now, to thrive in a competitive environment like that your business needs to have proper accounting. That’s why today, we’re gonna go over the best accounting practices for SMEs to ensure compliance and success! Let’s jump right into it, shall we?
Best Accounting Practices for SMEs to Succeed!
Keep Up-to-Date & Accurate Records
The key to good accounting is keeping track of your financial records. This can happen by immediately recording transactions and properly categorizing revenues and expenses. Moreover, to make record-keeping easier and more effective, you can use accounting software programs! Finally, as per UAE tax laws, businesses in Dubai must keep accurate financial records of at least five years.
Corporate Tax & VAT Compliance
In 2018, the UAE introduced the VAT, which means that companies must properly register for VAT. SMEs must also ensure that they file their VAT on time to avoid penalties. Many companies hire VAT consultants to help them with it all. Moreover, the UAE introduced the corporate tax in 2022, which applies to companies with profits that exceed AED 375,000. Naturally, businesses must make sure to comply with these regulations by correct reporting and tax submissions.
Separate Business & Personal Finances
This is definitely one of the best accounting practices for SMEs and startups. Owners could sometimes mix the business and personal finances. That’s a big no-no if you wanna ensure accurate financial reporting. Hence, you need an independent business bank account strictly for business transactions.
Regular Budgeting & Forecasting
Financial planning is key if you wanna properly grow your business. To do that, a yearly budget can help you manage cash flow and do future projections. And of course, this includes tweaking plans depending on how the market trends change!
Regular Financial Audits
To ensure that all operations are going smoothly, companies need to conduct regular audits. Big companies usually have an in-house team. However, SMEs can hire external audit firms to do the work. This helps find any inefficiencies in order to fix them and detect potential fraud. Moreover, audits provide a clear picture for stakeholders and investors in case of expansion or investments.
Outsource to Accounting Services
Finally, you can save all the financial consultancy to external firms who will handle it all. Whether it’s to ensure compliance or to do financial planning, accounting firms can help you with it all. Now, if you’re looking for any of those services, as well as corporate tax advisory, read on!
Need Help With Your Accounting?
Knowing the best accounting practices for SMEs in Dubai (or anywhere in the world) is crucial. And if you’re looking for a company to handle it all, Noraal is right here! From keeping your financial records in order to helping you with your tax compliance, we have all the services that matter to help your SME grow in Dubai! So, make sure you contact us today for a free consultation if you’re ready to level up your game!