Why Do SMEs Need to Outsource Accounting Services?
The UAE is a promising land for any business compliant with its rules, regulations, and tax laws. Under UAE laws, business license renewal is possible only if the organisation maintains accurate and transparent financial records. In other words, if you are doing business in the UAE, you should keep your accounts in order without compromise.
Furthermore, UAE's business landscape has undergone many changes since the introduction of Value Added Tax and changes to the Commercial Companies Law. UAE's legislation and the Federal Tax Authority (FTA) have tightened the financial rules to ensure that businesses take record transparency and maintenance seriously.
Here's where things can become tricky for Small and Medium Enterprises (SMEs) who cannot afford to have in-house accountants. The solution? Outsource accounting and bookkeeping services to handle these complex processes.
Is it important for SMEs in the UAE to maintain an accurate accounting system? Absolutely yes. Why? To avoid hefty penalties for tax non-compliance. Furthermore, the FTA can even ban business owners from operating their businesses or expel them from the country, if necessary. Let's look at the other side of the coin.
5 Reasons How SMEs Benefit From Proper Maintenance of Financial Records
Staying on top of their accounting system not only keeps SMEs on the safe side of the law but also renders various benefits such as:
1. Complete Tax Compliance
Like every country, UAE's tax laws constantly change with the ever-evolving business landscape. Therefore, staying abreast of the changes is essential to ensure they are incorporated into your accounts. Tax compliance is mandatory to thrive in UAE's competitive business ecosystem. If not, it can attract penalties resulting in reputational loss.
2. More Investors and Buyers
Want to attract more investors, buyers, and clients? Keep your accounts clean because all investors will scrutinise your bank accounts before signing the deal with your organisation. You will also need a healthy and corrupt-free financial record to obtain bank loans for further investment.
3. Bigger Growth Potential
Are you curious about where and how your investments are being spent? Are you seeking a clear picture of your growth goals, raw material costs, and profit margins for future business decisions? Regular account maintenance is the only way to plan your future business growth effectively.
4. Maintenance of Regulatory Compliance
It is the act of complying with a legal law or standard. Keeping accounting records in compliance with UAE regulations can save a company from legal hassles and penalties. The UAE's standards are constantly evolving, so accounting support is often necessary to stay compliant.
5. Managing Credits and Debts
Accounting helps you stay on top of your cash inflows and outflows, which is critical for any business. SMEs must keep track of all receipts, payments, and expenses to understand who owes them money and vice versa.
Most often, SMEs hesitate to outsource accounting services to avoid expenses. However, the truth is that opting for outsourcing gives them enough time to focus on their KPIs (Key Performance Indicators) and business objectives. Hence, hiring is not a luxury for small businesses but a necessity with beneficial outcomes.
5 Operational Benefits of Outsourcing Accounting Services
Handing your accounting tasks to a hired team of professional accountants gives you the advantage to:
- Control overhead expenses.
Think about the expenses of recruiting, hiring, training, and maintaining an in-house accounting team. Creating your team takes much work, time, money, and resources. On the other hand, outsourcing saves you from all these burdens like salary, insurance, sick leave, etc., and gives you the luxury of having an expert team handle your accounting requirements at a fixed price.
- Use the latest technology.
Gone are the days of manual, error-prone accounting. Accounting software comes in hundreds of variations, and outsourced services can help you choose the right one for your business. Accounting services across the UAE widely use tools like Zoho, Xero, SAP, Quickbooks, Microsoft Dynamics, ERP, and Tally. These top-grade tools help you save time and mitigate human errors and internal fraud.
- Conduct regular assessments
The benefits of outsourcing your accounting are that you can keep track of your data and records on a day-to-day basis. A dedicated team of accountants handle your accounts, thereby reducing the chances of errors occurring during the calculation process. Accounting and bookkeeping services can ensure your business's success and future planning by providing accurate, insightful, and timely financial reports.
- Optimise usage of time
In most cases, outsourced accounting services are experienced in handling large companies' most challenging accounting processes. This experience gives them the advantage of handling your small business accounting efficiently. The team will also complete the work within the desired time frame, allowing you to focus on your core business.
- Gain professional expertise
Lastly, having a reliable accounting team on your side ensures your accounts are accurate, transparent, and tax-compliant. Investing in outsourced accountants will be well worth your money, as they will do a wonderful job.
Partnering with an outsourcing accountant team might be the smartest decision as the UAE introduces new tax policies and regulations. Hire the Fortius Consulting Services team to stay on top of your paperwork and avoid burnout. Call us now!