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Everything About Capital Bank Digital Currency (CBDC)
  • Accounting
  • 2022-04-05

Capital bank digital currencies (CBDCs) are a digital form of the currency invested by a capital bank. They are adjusted by a country’s financial dominance and are executed using a database that is managed by the capital bank, authorized private-sector entities, or the government. 

Cbdcs Are Available In 2 Forms:

1. Account-Based:-

Account-based CBDCs, earlier described as capital bank electronic money, work just like regular deposit accounts. The customer is needed to set up an account with which they can respond to negotiations, as well as send and receive digital currency. A negotiation requires retrieving the customers’ database to verify the ID of the sender and receiver. 

2. Digital Tokens:-

Tokens were earlier described as capital bank cryptocurrencies. Token-based systems assume the transfer of a recipient of value from one wallet to another. In established financial systems a token can be money or a coin, and in cryptocurrency, a token is a bitcoin for sample. Digital-token-based systems do not require the customer to verify their identity to send or receive a payment. Anyway, the negotiation is accepted based on public-private key pairs and digital signatures between the sender and receiver. 

The ordinary defense that faces digital token-based systems which authorize anonymity is a lack of identity requirements. This can ease the risk of money laundering and fraud

when you lose your token, you lose retrieve to your benefit. This has happened to many cryptocurrency lenders. Anyway, customers are now more accustomed to using tokens and this is less of a problem compared to the past.

Another type of digital token is the non-fungible tokens (NFT) which maintain digital benefit in contrast to bank digital tokens which maintain currency. 

What Is CBDC Use Cases?

Ongoingly CBDCs are built for either wholesale or retail payments.

  • Retail CBDC - Retail CBDCs are used in the same manner as amounts of money, to make payments between individuals, or between individuals and businesses. Retail payments are carried out via amounts of money, cards, and online negotiations. Public clients can have retail CBDCs in the form of deposit accounts and/or digital tokens.

  • Wholesale CBDCs - Wholesale CBDCs are used to enable negotiations between financial institutions and entities that have accounts in capital banks. Observing to the Bank of International Settlements (BIS), wholesale CBDCs can:

       - Improve the development of capital markets.
       - Enhance cyber security.
       - Provide improvements in securities trading and settlement

What Are The Pros And Cons Of Cbdcs?

With the rise of blockchain technology and cryptocurrency, capital bank digital currencies (CBDCs) are gaining increasing popularity among global financial institutions. If executed correctly, CBDCs can have the following pros & cons for the financial system:

Pros
  1. Capital bank digital currencies (CBDC) can remarkably change financial services by facilitating the retrieve as well as the usage of fiat currency. The main benefits of CBDCs are:
  2. Authorizing real-time monitoring and analytics of all the finances running through the capital bank
  3. Enhancing the efficiency of capital banking systems
  4. Enabling faster and easier negotiations via mobile applications
  5. Reducing costs of financial services by: 
  6. limiting the printing of amounts of money
  7. eliminating physical cash distribution and devastation from issuance
  8. Additionally, compared to crypto coins, CBDCs can be more generally accepted by the general population because they are subject to legal and government regulations. They do not have the disgrace of being chosen by those who want to avoid detection by authorities.
Cons

CBDCs face some defense due to the economic appointment within a country in addition to other reasons, such as:

  1. Widespread Assuming Defense: Increased digitalization may leave a portion of society behind due to potential barriers around trust and data privacy, digital knowledge, and retrieve to IT. For sample, the capital bank of Ecuador launched retail CBDCs in 2014. Anyway, the program stopped due to low citizen assuming.
  2. Cyber Risks: Defending against cyberattacks will be harder as the number of expiration in a general determine CBDC system will be remarkably larger than those of ongoing wholesale capital bank systems.
  3. Cross-Border Payments: CBDCs can ease cross-border and cross-currency payments unrestrained from work-hours and holidays in different time zones. Anyway, different legal and regulatory frameworks present a significant obstacle to cross-border payments. Harmonizing these frameworks would be a summons.
What Is The Difference Between CBDC And Cryptocurrency?

There Are 3 Important Aspects Of Currencies:

1. Money Creation: CBDCs are legally admitted by governments or a very limited number of individuals. On the other hand, cryptocurrency begins to focus on democratizing financial systems.

CBDCs are created by capital banks, whereas cryptocurrencies enable customers to create money with the help of a consensus algorithm. Therefore, money creation is managed by the consensus algorithm and the contestants in the consensus process. The money creation process may assume proof of work or proof of stake.

2. Maintain: Both CBDCs and cryptocurrencies are virtually maintained benefits. 

3. Capitalization: CBDC negotiations still have to go through the banking system, whereas crypto relies on peer-to-peer negotiations with no middle man. 

4. Other: Both CBDCs and cryptocurrencies’ market price changes are based on contributions and demand and therefore the beliefs of market contestants about the ongoing and future value of these currencies. A CBDC’s worth should be straight linked to the governments’ treasury value and the fiat currency prices. Crypto’s value should rely on its valve within a fixed blockchain ecosystem. 

How Will Cbdcs Impact Cryptocurrencies?

Assuming is key in rolling out any currency and minimizing other can increase assuming. Some countries that aim to reduce capital flight and have CBDC programs have taken restrictive steps against cryptocurrencies. For sample:

China: Chinese regulatory authorities, which are working on developing the e-CNY, imposed a ban on initial coin offerings (ICO) in 2017 and termed cryptocurrency negotiations “illegal”. That ban triggered an instant 6% decline in bitcoin prices.

India: Indian authorities have one of the strictest laws on cryptocurrencies which criminalize the possession of crypto benefit, trading, mining, or transfer. This law was announced in 2018.

Turkey: Turkey’s capital bank banned the use of cryptocurrencies in payments for goods and services in April 2021. 

While we are not well informed of prosecuted individuals because of cryptocurrency holdings because of these bans, objectives have suffered as a result. For sample, the customers of a cryptocurrency platform based in Turkey are having trouble retrieving their benefits. 

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5 Methods To Stop Payroll Fraud
  • Accounting
  • 2022-04-05

What Is Payroll Fraud?

Payroll fraud is the act of looting money from a business using the payroll complex. This violation indicates itself in some normal methods. If you’re new to payroll accounting, some of them may be unknown to you, so let’s take a few minutes and brush up on our basic knowledge of payroll impostor and the method it is most commonly committed.

Hire the best auditor to prevent the all kind of fraud in your business.

There Are Four Types of Payroll Fraud

  • Ghost Hired man - A “ghost office worker” is developed in your payroll complex. If you’re a small business with fewer than 50 hired men, this one won’t be a rapid warning, but it’s still something to keep an eye on as you grow. In this plan, someone develops a fake office worker in the complex and then pockets the money that is given out to this non-existent worker. Unless you’re paying close notice, an extending business can simply have an extra “office worker” in its complex.
  • Time-sheet Fraud - Wages are falsified. Hired men can falsify wage information by lying on their time-sheets, taking dominance of task loopholes, or inflating expense reports. More savvy people may even be able to break into a payroll complex and assign an unearned bonus to themselves. Normal payroll fraud includes:

    Buddy punching: when one office worker puts in a time-sheet on behalf of another while they take the day off. 

    Paycheck divergence: When one worker takes the paycheck of another worker and cashes it.
  • Fake Repayment Claims - A fake workers’ repayment claim is filed. Workers in nearly any production can fake a slip and fall or other workplace injuries in command to get paid time off. While you might workmate this type of fraud with stockroom work or construction, an office worker can just as easily say they slipped on the floor next to a leaking water cooler in your break room.


  • Hired man are Misclassified - Hired men are misclassified. With this type of imposter, the call is coming from inside the house. It can also be unintentional. The IRS requires employers to properly classify hired man.

    When an office worker is classified as a contractor (1099-form hired man), for instance, but they’re a full-time office worker… the business is guilty of tax fraud. 

    Some employers classify W-2 hired man as 1099 hired man to avoid paying taxes or health care insurance.

 

How to Stop Payroll Fraud?

Maybe you’re tempted to scrabble under your desk about now. But don’t do it. Rather, execute one of these five strategies for stopping payroll fraud before it robs you of your money. While payroll fraud is hard to stop fully, you can certainly catch it earlier than later if you’re diligent. Here’s how you can stay on top of simple payroll fraud.

1. Set Up a Complex of Checks and Balances:-

Even in a small business, the same person who puts a new hire into the complex shouldn’t be the same office worker who reconciles quarterly reports and balances the payroll books. At the very minimum, get a second set of eyes on quarterly and/or yearly payroll reconciliations. You could also have managerial support for all overtime and task checks. This may stop a hired man from adding some extra hours or sales and here, thinking it won’t be detected.

We advise you to execute a complex to check the books on a quarterly and yearly basis to search for errors that may tip off the occurrence of payroll padding or ghost-hired man. Integrate your bookkeepers and payroll personnel into your financial information and set it to “view only.” This allows the approach to information needed to do their end of the job but requires managers to support payroll and ensure there are no signs of fraud.

 2. Switch to a Modern Time-sheet Complex:- 

Using a sophisticated time-sheet complex. Rather than having hired man self-report hours, consider having a clock-in complex that requires a pass-code or other two-step authentication. This will stop misreporting. Ensure that the complex relies on a bio-metric or two-step authentication process in command to stop buddy punching. 

3. Do a Local Audit Of Payroll Taxes:- 

Doing a normal analysis of the payroll taxes being paid. This can thwart any unexpected fraud on the part of your business. If an office worker is unexpectedly classified as exempt or an independent contractor, routine analysis of payroll taxes may allow you to catch the mistake before too much damage is done.

 4. Install CCTV Complex:-

Having a CCTV complex in zones where a workplace injury is likely to take place. Being able to rely on video proof in the case of an injury report secures you and the office worker. Have hired man work on certain plans in pairs, as well as anything that assumes a ladder so you can avoid false reports of worker’s comp.

5. Regulate Office Worker Behavior:-

Pay notice to office worker behavior. Payroll is not a bureau that frequently requires working late or taking files home. If you have an office worker who works with sensitive payroll information who frequently prefers to work when no one is around, keep your spidery senses activated. The petition they stick to office hours or do a random audit to make sure everything is on the up and up. We also advise you to promote direct deposit within your business when easily. This will reduce the amount of physical checks present that could be prospectively stolen or altered.

Payroll fraud doesn’t get talked about a lot, but it can be really expensive. It’s especially harmful to startups and small businesses. While you may never be able to develop a fraud-proof complex, there’s no reason you shouldn’t try.

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How Do I Acquire A UAE Tax Residency Certificate?
  • Taxation
  • 2022-03-24

The UAE has rearranged itself in an extremely low period from the country once finished dependent on oil profit, to one with various caring attracting funding from all whole around the world. the emirates of Dubai and Abu Dhabi in especially, have now looked right on as the core of worldwide finance embracing the newest technology innovations, as well as expanding into attractive visitor destinations with world-renowned landmarks and  5-star hotels. Among lots many motives which enchant businesses to the UAE is its beneficial tax environment, the vast adulthood of agencies that base themselves in the UAE in the are exempted from income tax, in a calculation, it has confirmed double taxation confirmed with quite a few trade colleague to secure that taxes are charged twice in other two countries on the same person-taxpayer.In recent times, the UAE has 123 double taxations in accordance in force or undecided, this supports the free flow of trade and investment from other countries, as well as securing member countries from double taxation on the trade of goods, capital, and services. In command to benefits from the double taxation avoidance accordance that the UAE has in place, agencies or companies must be in ownership of a tax domicile certificate (TDC), also known as a tax residency certificate (TRC)

Is There Something About The Tax Residency Certificate?

A tax residency certificate is a file issued by the UAE Government of finance (MoF) to an agency operating in the nation to inaugurate and grant it to benefit from the double taxation avoidance agreements. the tax residency document is open to any agency operating on the keep up or in a foreign trade zone that has been in action in the nation for at least a year, offshore agencies are disqualified from this and must receive a tax freedom certificate instead of the tax residency certificate. as well as a business organization, the tax residency certificate is also in attendance to an individual who has resided in the UAE for a minimum of 180 Days and who wish to begin whose native countries do not have a double taxation accord, with the UAE, the individuals must have an official UAE resident visa for more than 180 days to register.

How To Get A Residency Certificate In UAE?

The Must Need Documents Or Papers To Obtain A Tax Residency Certificate Are Well Defined For An Individual Match Up To A Corporate Entity, To Take Action In Both Cases Are Detailed Below:

There Some Documents Are Required-

 

For a normal person-

  • Emirates copy.
  • Travel document (passport).
  • Proof of income. 
  • A statement about bank. 
  • Living resident proof.
  • Report about residency.

For A Legal Person-

  • Business license copy
  • Permit signatory's passport 
  • Permit signatory emirates identify copy 
  • Audited financial declaration 
  • Genuine bank data
  • Certified tenancy subcontract
  • Memorandum of union or relevant papers

What is the pending for acquiring the tax residency certificate?

1. Make an account payable to the ministry of finance (MoF) entrance.

2. Finished the application document form.

3. Attach the needed papers in PDF or JPEG format.

4. Your application and attached papers will be confirmed if they meet and criteria. You'll get an email for accepting and asking to pay the incomplete fees via the system.

5. After complete payment, you'll get the certificate via a local courier.

How Much Time Does It Take To Obtain The UAE Tax Residency Certificate?

Subject to all relevant papers being in place, the pre-approval is going pending with the ministry of finance (MoF) generally takes 4-5 working days, following pre-approval and verification that all documents are correct the mof then take up to a further 5 active days to issue the tax residency certificate. the tax residency certificate/tax domicile certificate has a limited period of one year, and can then be remade each year, subject to reapply and renewal process.

What Is The Satisfaction In Acquiring A UAE Tax Residency Certificate?

Founders in the UAE satisfaction from authorized international markets when setting up a business in Dubai or Abu Dhabi, the added satisfaction of being a tax resident in UAE and acquiring the UAE tax residency certificate is to avoid double taxation and receive tax incentives by being a citizen in the UAE.

We hope that now you will get your tax residency certificate easily. If you want to get a free consultation regarding tax residential certification then Risians Accounting Expert welcomes you and is always ready to assist you Contact us now

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Choosing FTA-Approved TAX Agents in the UAE: Everything You Need to Know
  • Taxation
  • 2022-03-09

Hiring a tax agent withinside the UAE is a high requirement for taxable entities to fulfill their tax-associated responsibilities. The Federal Law No. (7) of 2017 on Tax Procedures defines tax sellers withinside the UAE as any man or woman appointed on behalf of taxable entities to symbolize them earlier than the Federal Tax Authority (FTA).  Tax sellers, as in keeping with the tax tactics law, should be registered with the FTA and help the taxable humans to satisfy their tax responsibilities and workout their tax rights.  The position of tax sellers is rather vital for taxable companies and they should be diligent even when hiring tax sellers in Dubai, UAE.

You should recognize the position and obligations of a tax agent earlier than appointing one. Also, you should have the ability to differentiate among tax advisors and FTA-accredited tax sellers in Dubai, UAE to make certain tax compliance. Appointing the proper tax agent is vital to well meet your tax responsibilities and shop yourself from incurring any sort of tax-associated penalties. This article will assist you to pick out a tax agent who can help you with all sorts of tax responsibilities. Read in advance to recognize further:

FTA-Registered Tax Agents in Dubai, UAE

You must now no longer be scammed with the aid of using any man or woman posing as a tax agent in Dubai. Businesses must pick out best the one's humans who're registered as tax sellers with the FTA. The FTA has hooked up a sign-up for tax sellers with a committed document for every tax agent. The document includes the records associated with the expert behavior of every tax agent. Article thirteen of the Tax Procedures Law states that best the ones humans indexed withinside the Register and authorized with the aid of using the Ministry of Economy are accredited to exercise as a tax agent withinside the UAE.

Qualities & Qualifications of Best Tax Agents withinside the UAE

Before appointing a tax agent, you have to recognize the easy functions and qualifications the person is wanted to keep. Article 10 of Cabinet Decision No. (36) of 2017 at the Executive Regulation of Federal Law No. (7) of 2017 states that a tax agent needs to personal the following functions and qualifications to be listed withinside the FTA Register:

  1. Tax sellers withinside the UAE need to be of genuine conduct & behavior, have not to be convicted of any crime
  2. Must keep at least a licensed Bachelor or Master's degree in tax, accounting, or law from a stated educational institution (a bachelor’s degree plus a tax certification issued with the resource of the usage of an across the world seemed tax institute is also accepted)
  3. At least three years enjoy as a tax professional / an authorized legal professional or an accountant
  4. Written and oral conversation competencies in every Arabic and English
  5. Must have exceeded any test to satisfy the qualification necessities mandated with the resource of the usage of the FTA
  6. Medically in shape to perform the obligations as a tax agent withinside the UAE
  7. Must have professional indemnity insurance or be protected with the resource of the usage of one

Tax Agency Requirement

Usually, taxable males and females interact with tax sellers through tax companies in Dubai, UAE with which the agent is associated with providing tax-related services. A tax commercial enterprise organization is defined as a crook entity licensed to carry out as a tax commercial enterprise organization withinside the UAE and it needs to be registered with the FTA.  An FTA-registered tax commercial enterprise organization can carry out withinside the UAE supplied it has at least one registered tax agent associated with it.

Role & Responsibilities of UAE Tax Agents

Tax sellers within the UAE are answerable for supporting their customers in assembly their tax-associated obligations and supporting them satisfy all of the tax-associated necessities stipulated within the VAT law.  A tax agent can offer you with right recommendation and interpretation of the UAE VAT Law and the assistance you've got had been given were given a test the tax procedures.  Some pinnacle obligations of tax sellers within the UAE are shown below:

  1. Helping the corporations to carry out VAT registration within the UAE
  2. Prepare and positioned up VAT returns to the FTA on behalf of the corporations
  3. Maintain tax-associated statistics and/or statistics
  4. Enquiring approximately tax-associated subjects with the FTA
  5. Submitting requests for reconsideration of options issued with the useful beneficial useful resource of the usage of the FTA
  6. Help the corporations put together for a tax audit
  7. Assist the economic agency company to use for VAT Deregistration within the UAE
  8. Appeal to the FTA in case the purchaser incurs tax-associated penalties

Why Hire Tax Agents in Dubai, UAE?

Hire the best FTA-Approved Tax Agent. As a taxable entity doing agency company within the UAE, you could need to make sure that your verbal exchange with the FTA is right and effective.  A tax agent within the UAE is the jailed individual who can communicate properly away with the FTA on your behalf. Since they'll be registered with and regular with the useful beneficial useful resource of the usage of the FTA, tax sellers have the authority to symbolize you earlier than the Authority.  Tax sellers within the UAE can constitute you earlier than the FTA each time the Authority makes any inquiries otherwise you need to elevate any problem to the Authority.   Since a tax agent is well-versed in tax prison guidelines and the Arabic language, the FTA can without trouble recognize rapid remedy your tax-associated troubles.

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There are some Different Types of Accounting Practices in the UAE?
  • Accounting
  • 2022-03-09

Accounting is a central function of every firm by ignoring its size, nature, and type. Accounting is an unavoidable part of a business organization and it looks like looking myself into the mirror daily in order to make sure that you are ready and searching perfect for an event. In a similar manner accounting also helps a business to make sure whether it is ready for any kind of upcoming events such as spread and if it is ready to face any unexpected events.

Accounting allows you to know your business's current stage and the profits and the loss gained by the business.

Even though accounting plays a vital character in the business, many are unaware of it and they don't provide sufficient focus to such a function which in the future opens the way for high-level probability and must be given sentences including losses. 

There are many times, the businessman or control and management of a business don't know or are confused regarding different types of accounting practices in the UAE.

Being a ruling financial office providing accounting services in UAE, we could share a few important details regarding different types of accounting practices in the UAE.

  1. Financial Accounting Financial Accounting is a type of accounting improvement which involves tracking all the financial transactions of a business, it is regarded as a traditional practice in which all the accountants are looking forward to performing accounting, a financial accountant by following overall world and locally must be agreed accounting standard provides a financial report which contains a summary of all the financial transaction of a business, by tracing the financial advantage based on cash inflow and outflow, as well as the advantage of benefit and accountability the financial accountants try to provide reports regarding the publication of funds in the organization, the financial statements to get ready, may include profit and loss account, balance sheet, available funds, statement of change in equity, etc, which may be used parties like investors and shareowner, every business firm may maintain it's myself accounting plan of action and software.
  2. Forensic Accounting - forensic accounting acts as a financial operative as it is conducted to detect any trickery and fraud or malpractices performed in the business and to find proof of such activities, the main target of conducting such accounting is to provide evidence or proof in the high court of the law regarding and embezzlement and accounting report is handed over to the high court by the accountants who exposed whether the firm is prone to such activity task or not.

  3. Cost Accounting - cost accounting deals with the investigation of all any cost to suffer in producing by complete goods by a firm, it mainly involves arranged costs, variable cost or input costs, etc analysis of this cost will help a firm to make choice regarding spending, inventory, supply, pricing, etc this accounting operation involves exploring variations between the valuate costs and the genuine costs suffer in order to examine the different, this information can be used by the firm remedial actions if there are any be in service variations.

  4. Tax Accounting - it is troubled with the process of resolving the tax liabilities of a firm, in the example of the UAE, the only tax which is relevant is VAT, and under this accounting practice, the accountants must be guarantee whether the firm complies with all the tax laws and they help the firm pay the respected tax on time without being late delay, they must secure and protect the firms from fines, penalty, and punishment due to delay or non-payment of tax.

  5. Chartered Accounting - the chartered accountant is a part of an employee of well-experienced accounting skills, the experienced accountants in Dubai are skilled lots enough to manage in a number of areas including management to auditing. they likely focus in any condition specialization within the accounting fields.

Best Accounting Firm For Outsourcing.

Risians Accounting can help allocate the accounting needs to the accounting firms in Dubai is the best course in order to lower down of cost to available skillful services, course cost by bringing down and to avail professionalized services, getting a plan of different types of accounting practices in the UAE will help businesspersons to choose the most suitable accounting practice which they are in require of, exceptional service is at all every time ready to provide all kind of accounting services to client, buyers or customers, providing by making own custom-tailored services to the clients has created Risians Accounting one of the keeps understand and known accounting auditing firms in Dubai.

keeping an understanding about different types of accounting practices will give more power to your journey as a businessperson in Dubai, whatever and businessperson require to focus more on his central competencies, which means accounting will get less consideration, not needed to hurry.

 

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Why Accounting And Bookkeeping Are Important For Your Business?
  • Accounting
  • 2022-02-11

Your business employer agency targets powerful manipulation of finances, it in fact is why you would love to understand the importance of clerking associated accounting offerings. Previously, each of those responsibilities have confirmed yourself as a problem for masses groups to guide inputs.

However, with scientific useful beneficial aid and what is greater the transport of several accounting software, groups are having it smooth. The question that stays is but can accounting and bookkeeping facilitate shielding topics inexperienced to your business employer agency?  Let’s take an in-intensity check this:

Get the best Accounting & Bookkeeping service.

Accounting And Accountancy Made Public

 

In smooth words, accounting and bookkeeping will allow you to keep track of your finances. From coins in/ outflows to taxes, costs to profits, it tackles and statistics all monetary transactions taking the region to your business employer agency and to those on the manner to be associated on the downside of your business employer agency.

Why is it essential?

several perks produce accounting and clerking offerings essential for inexperienced business employer agency proceedings. Here are some:

Accuracy in Transactions

One extra than one of the maximum essential perks of getting accounting and bookkeeping offerings is the accuracy of monetary transactions associated with statistics. You’re tuned in to some unspecified time in the future that your coins are getting back from and within the route of which it’s going.

In specific words, you’re aware of your profits streams and costs, which offers you belief in the monetary tendency of your business employer agency or business employer agency.  Not great this, however, what is greater gets obvious discrepancies among personnel and business employer agency companions concerning finances, growing topics streamlined.

Better Expense Management

You need a non-public and eager eye at the price variety to confirm that your corporation is developing the right shape of costs. That is what accounting and accountancy offerings in the town deliver; monetary literacy. Since its miles already maintain statistics for all of the transactions, you'll at the same time as now not have trouble discovering statistics related to your costs.

This aids in developing higher price manipulation at the same time as making you knowledgeable nearly greater or lots of good buy tons much less essential options. you will have a visual, numerical, and graphical example of that costs and paying off.

Ultimately, you could check which services and products are paying off, transferring costs to those which can be generating earnings and returns. This may even be a useful beneficial aid in minimizing greater costs as well.

Better Tax Management

Tax manipulation is a few notable most essential phases of taking walks in a corporation. It's one of the discouraging responsibilities that, if not finished right now, will result in havoc. Therefore, you need to celebrate the importance of accountancy in the corporation because it permits manipulation of your taxes.

With accounting and bookkeeping UAE, you've been given and have been given the whole lot taken care of and organized beforehand. With prepared statistics, you'll at the same time as now not have trouble generating invoices that will help you record your taxes within the given tax period.

Moreover, submitting your taxes well can save you from laying waste compliance requirements. As speedy as auditing the government does business employer agency leader audits, taking walks regularly with compliance can deliver your business employer agency associate edge.

Ensures Peace of Mind

One in no manner stops demanding nearly greater or lots of good buy tons much less taking walks through a business employer agency successfully. However, having accounting and accountancy offerings through the manner of your aspect will reduce your strain through a way of manifolds. If you’re having organized books and aren't able to look at your price variety correctly, then you’re most in all likelihood doomed and in all likelihood aiming to stand outcomes in Smooth unspecified time in the future of audits.

However, with accounting and bookkeeping, your price variety and business employer agency leader books are often prepared. Being the boss, you’ll go through the monetary development of the monetary business employer agency, costs made, profits generated, profits created, earnings incomes opportunities, and a whole lot greater.

This now not great offers you peace of thoughts manners to the reality you’re aware of however topics are going but what is greater offers you the information to form sound options.  Moreover, it furthermore motivates you to conversant regarding the method and you’re capable of learning.

Planning, Analysis & coverage created smooth

One of the most appealing perks for having business employer agency answers is that you have a better hazard of planning your form development. Moreover, you're obtaining a higher hazard of analyzing the state of affairs of your business employer agency.

Having unique analytics can provide you with a head bounce to your decision-making processes. You’ll be capable of delivering collectively knowledgeable alternatives with the analytics record through the manner of your aspect. Speaking of the record, your clients are often trying opinions at the event of the monetary business employer agency.

With the right accounting and accountancy answers, you’ll be capable of providing associate-in-intensity analytics records with no troubles. Furthermore, you'll advise answers or lead new duties through the way of protrusive your thoughts through the opinions acquired with a genuinely superior record.

In super words, accounting and accountancy offerings deliver collectively topics a whole ton of considerable good buy tons much less complex for developing plans furthermore to important the marketplace with aggressive strategies.  It furthermore makes it a whole lot of masses , lots of good buy tons much less complicated for your leader corporation to diploma on the pinnacle and maintain from dangers that might damage or end up a hurdle in its development.

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Signs that you need an accountant for your business in Dubai
  • Accounting
  • 2022-01-08

In the early stages of a company’s lifecycle, the key members within the organization, particularly the owner, may have to wear several different hats. On any given day, you might play the role of CEO, secretary, salesman, accountant, or even intern… depending on what the business requires. 

While this juggling act may work initially, as the company scales, the trick becomes unsustainable. For instance, taxes and financial planning become exponentially nuanced and time-consuming, especially if you operate within an industry with stringent regulatory or compliance standards. 

To that end, every growing business reaches the stage where having an accountant becomes a matter of necessity. But how do you know when it is the right time to hire an accountant? By paying attention to the signs.

1. You Don’t Know How to Track Your Finances

The main purpose of any business is to make more money than is spends keeping up with expenses. Whether you’re using Wave vs QuickBooks or visa versa, if you’re not tracking your finances, you have no way of interpreting how well your business is doing.

If it’s an obligation you always put off or you simply don’t have the time or know-how, you need an accountant to maintain your bookkeeping. They’ll track every dollar coming in, as well as every expense. It’s just as important to know where your money is going rather than just how much is being spent.

2. You’re Scaling Your Business

Having a booming business is never a bad thing. If you can’t keep up, it just means you need to hire on a little more help, especially if you’re deciding to expand.

You may need an accountant to help you understand your best possible growth strategy (new locations, new hires, better marketing, new products, etc.). They’ll be able to look at the numbers to determine what you can and can’t afford, as well as any risks involved.

3. It Seems Like Your Business is Spending Too Much Money

Business owners who are inexperienced with financial management may find themselves at a loss each month. Where did all their money go? Shouldn’t there be more left at the end of the month?

If you find yourself in this position, always seeming to have spent more money than you should have, you probably need an accountant to help you get your budget in order.

4.You Have Problems With Payroll Each Month

If your business has any employees (other than you), you need a reliable and consistent payroll system to make sure you’re taking care of your staff. However, payroll can be difficult to manage, especially for busy or inexperienced business owners. You may need an accountant to help you set up a payroll system and ensure everyone’s getting accurately compensated.

5. You Need Help With Forms

When you’re a business owner with employees, there are a number of forms you need to file with federal, state, or local tax agencies in addition to your business tax return. You must file tax forms (e.g., Form 941) showing how much you paid employees and withheld in taxes.

To help you with this responsibility, you could also sign up for full-service payroll software. Full-service payroll files federal, state, and local payroll taxes on your behalf. 

Did you take out a Paycheck Protection Program loan? An accountant can help you navigate the intricacies of applying for loan forgiveness on Form 3508.

6. You Get Audited

An audit can be a nerve-racking ordeal for business owners. During an audit, the IRS analyzes and exposes your financial history to find discrepancies. 

Accountants can review your records and make sure they are accurate. They can reconcile accounts, check for missing information, and run reports to help you avoid tripping IRS audit triggers and keep your books up-to-date, clear, and accurate. 

7. Your Business Is Growing

Did your sales explode overnight? Steadily rise? Either way, an accountant can help as you grow. A bigger business means more profits—and more spending. But if you fly too close to the sun, you could be hurting your business’s future.  

An accountant has the expertise to project how successful your investments will be so you can confidently spend your revenue—without overspending. They can caution you about harmful business purchases and suggest smart investments. 

Accountants play a leading role in year-end tax planning for business owners and can help you prevent overspending or under-spending.  Their reports could prevent you from making a regrettable investment.

And if you’re experiencing business growth, you might need to update your business plan. A business plan is an ever-changing document that should evolve as your business does. You might talk with an accountant about making key business plan updates.  

8. You Don’t Understand Business Taxes

Taxes can be confusing, especially if you’re filing your first business tax return. Make a mistake, and you could wind up with IRS penalties. Not to mention, you could miss out on opportunities to lower your tax bill through tax deductions and credits. 

Not sure where to start with your tax return? An accountant can help you make sense of it by:

  1. Letting you know which tax return form you need to file for your business structure
  2. Notifying you of filing deadlines
  3. Finding tax credits and deductions
  4. Helping you understand your accounting records

You may want to hire an accountant for taxes when you’re just starting your business (or at any stage in business ownership) to help ensure you fill out the forms correctly. 

9. Turnover has increased but profits haven’t.

More money coming in must mean more profit right? Not necessarily! This is a good time to have an accountant review your books and identify areas where your expenses can be improved to make a significant difference to the bottom line.

10. GST

This might seem simple, especially if you have invested in a software package such as Xero. This makes it feel as though managing GST is easy. However, there are a few pitfalls that new businesses can get trapped in when it comes to GST. If you are registered for GST then it is best to get some advice from an accountant.

11. Feeling overwhelmed

When you first started your business the invoices were pretty simple. You had a few customers and you collected the money and gave them a receipt. But as the business has grown you might be experience more complicated scenarios. When it starts to get tricky, it's time to call your accountant.

12. You have better things to do

Once business is going well you will be too busy working on more technical areas of your business. This is where you are going to get the most return is if you focus on the things that you are good at. 

13. Thinking of selling or expanding the business.

When selling, expanding, taking on a partner, each scenario has a number of potential tax implications. It could cost you thousands of dollars if you don’t seek professional advice. A professional accountant can ensure that you have the correct structure to maximize your profits and minimize your liabilities when making big changes in your business.

14. Buying or selling property

Buying and selling property within a business structure can be tricky and there are many things that need to be considered. An accountant can walk you through all the scenarios to ensure that you choose the best outcome. You need to get this advice prior to making any purchases as once you have signed a contract it may be too late.

15. You’ve realized how little you know about accounting!

You might have done an accounting subject at high school or uni, but times have changed and tax laws change constantly. It is best to get advice from someone who knows the current laws and how to maximize the opportunities.

16. Unexpected circumstances

Sometimes, personal affairs can impact the future of your business. For instance, if a business partner were to leave or if the company is considered a marital asset in the case of a divorce, either could change a business’ course. An accountant can help advise proper actions about taxes, business structures, estimate the business value, or produce financial statements for the company’s sale.

17. Taking out a business loan

An accountant can help you determine if taking out a loan aligns with your business plans. If so, they can recommend the best loan structure, size, and payment structure while preparing the necessary financial statements. 

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What Information Must be Included in Your Tax Invoice In UAE?
  • Taxation
  • 2022-01-05

Since the commencement of value-added tax (VAT) from January 1st, 2018, the format of the invoices or bills that usually exchange hands between seller and buyer will change and it is not limited to the inclusion of VAT at five percent on the invoice alone but many other elements also need to be incorporated in invoices in line with Article 59 of Executive Regulations of the VAT Law.

As per the law, invoices should not display "invoice" or "bill"; rather, "tax invoice" should be clearly displayed on it. Also, the tax registration number (TRN) issued to the supplier or seller should also find a place on invoices along with addresses.

The FTA said that four items on the receipt should be clearly marked:

  • Tax receipt displayed
  • Tax registration number
  • Price that includes VAT
  • Amount of VAT added

In a brief statement, the FTA called on consumers "to review tax invoices as businesses can’t charge VAT if they were not registered".

For issuing a tax invoice the following conditions must be met:

  • A consecutive serial number not exceeding 16 characters, in one or multiple series, containing letters or numerals or special characters (hyphen or dash and slash symbolized as “-” and “/” respectively) and any combination thereof, unique for a financial year.
  • Address and name of the recipient and the address of delivery, along with the name of state and its code, if such recipient is unregistered and where the value of taxable supply is Rs 50,000 or more.
  • Quantity, in case of goods and unit or Unique Quantity Code thereof.
  • Total value of supply of goods or services or both.
  • Taxable value of supply of goods or services or both, taking into account discount or abatement, if any.
  • Rate of tax (central tax, state tax, integrated tax, union territory tax, or CESS).
  • Amount of tax charged in respect of taxable goods or services (central tax, state tax, integrated tax, union territory tax or CESS).
  • Place of supply along with the name of the state, in case of a supply in the course of inter-state trade or commerce.

According to the guidelines issued by the Federal Tax Authority (FTA) in relation to the contents of the UAE VAT Tax Invoice, there are two types of Tax Invoice:

Simple VAT Invoice will be for supply less than the specified amount. It is issued in the case when the customers are retail consumers and don’t need to provide a VAT number. This type of invoice is for supermarkets and other retail industries.

Detailed VAT Invoice will be for supply more than the specified amount. It is issued in the case when registered business supplies to another registered user. This type of invoice is for wholesalers and traders dealing in bigger quantities.

 

What are the key contents of a Tax Invoice?

Contents of tax invoices are classified on the basis of simplified and detailed tax invoices as follows:

1. Simple VAT Invoice

  • A simple VAT Invoice must the word “Tax Invoice” at a prominent place.
  • It must consist the details of the supplier. Name, Address and Tax Registration Number (VAT Number).
  • In addition to the above, it must contain, Date of issue of the tax invoice.
  • The complete description of goods supplied must be included.
  • Apart from that, the most important thing a simple VAT invoice must have is the Total Amount Payable and Total VAT Chargeable.

2. Detailed VAT Invoice

In addition to the above details that are in simple tax invoice, a detailed VAT Invoice will consist of the following details:

  1. Name, address, and TRN of the recipient.
  2. A unique invoice number
  3. Date of Supply, if it is different from the date of issue.
  4. Price per unit, the supplied quantity/volume, rate of tax and the payable amount in AED.
  5. Discount, if applicable.
  6. Payable Gross value of Invoice in AED.
  7. Payable Tax Amount in AED.
  8. Statement relating to Reverse Charge, if applicable.

How can a business entity avoid errors in a Tax Invoice?

According to the law of VAT, all registrants should offer sufficient details in the tax invoice in UAE, this should not be incomplete or contain any wrong details otherwise the registrant would be responsible to make payment of administrative penalty. The right method to make sure that the invoice contains all the necessary details according to the law is to utilize software that will notify the user if any kind of detail isn’t involved and this will also help in making changes to the invoice according to the updates brought in the laws. Utilizing such software would save the registrant from making payment of a penalty and issue the invoice to the recipient in a timely manner.

 

Hire the Best Tax Agents in Dubai, UAE

Failing to comply with the requirements of tax invoice under VAT in the UAE will lead to hefty penalties which call for the need to hire the best Tax Agent in Dubai. Our company is well-known for providing specialized tax services such as UAE VAT registration, VAT deregistration, VAT compliance / VAT Return, excise tax services, and services related to VAT reconsideration etc. We ensure that businesses get efficient services through a dedicated team of VAT specialists and approved tax agents in Dubai, UAE. With our efficient VAT services in Dubai, UAE and a registered Tax Agent in Dubai, UAE the businesses ensure compliance with all the existing laws.

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Penalties For Violation of TAX
  • Taxation
  • 2021-12-29

In a statement, the FTA said 16 types of administrative penalties have either been reduced or had the method of calculation amended under the latest initiative in line with Cabinet Decision No. 49 of 2021 about amending some provisions of the Administrative Penalties for Violation of Tax Laws in the UAE, is designed to support tax registrants and help them fulfil their tax obligations.

Khalid Ali Al Bustani, director-general of the Federal Tax Authority, said the new amendment will become effective on June 28, 2021, and will reduce many administrative penalties imposed for violating tax laws. He said late payment penalty will not be imposed on voluntary disclosures if payment is settled within 20 business days of submitting the voluntary disclosure.

“This comes as part of the wise leadership’s directives to implement the tax system according to the best standards that ensure further growth for the national economy and help achieve transparency and economic momentum, providing an ideal and resilient tax legislative environment that encourages self-compliance and keeps pace with change through constant issuance of decisions in accordance with phased requirements,” Al Bustani said in a statement to Khaleej Times on Saturday.

Atik Munshi, managing partner at Enterprise House, said the relief announced by FTA on various penalties and their calculation is a positive step from the authority which will certainly be well received by the business community.

“This will also provide a proper direction on how to interpret the various articles thus a further clarity is now known. Such positive action from FTA will boost the business confidence. It remains to be seen on what shall be the outcome of the assesses who have filed and paid their penalties as per previous interpretation,” Munshi told Khaleej Times on Saturday.

 

To keep your business away and safe from the tax Penalties Get our Taxation Service.

1. Amendment of administrative penalties 

The new resolution amends the administrative penalties listed in Table No.(1), Table No.(2) and Table No. (3) of Cabinet Decision No. 40/2017. 

Some of the key amendments to the administrative penalties listed in the new resolution are as follows (non-exhaustive list):

  1. AED 20,000 reduced to AED 10,000 for failure of the taxable person to submit a registration application within the timeframe specified in the Tax Law. 
  2. AED 10,000 reduced to AED 1,000 monthly (not exceeding AED 10,000) for failure of the registrant to submit a deregistration application within the timeframe specified in the Tax Law.
  3. AED 15,000 reduced to AED 5,000 for failure by the taxable person to display prices inclusive of VAT.
  4. AED 5,000 (for each tax invoice) reduced to AED 2,500 (for each instance discovered) for failure by the taxable person to issue a tax invoice / tax credit note or an alternative document when making any supply.
  5. AED 5,000 (for each tax invoice) reduced to AED 2,500 (for each instance discovered) for failure by the taxable person to comply with the conditions and procedures regarding the issuance of electronic tax invoices and electronic tax credit notes.

Moreover, the percentage-based penalties applicable to the late payment of the tax due - in the tax return or in the voluntary disclosure or in the tax assessment - are reduced and the 1% daily penalty previously imposed is eliminated. 

The new late payment penalty is now calculated as follows (the 300% cap still applies):

  1. 2% of the unpaid tax due on the day following the payment due date, 
  2. 4% monthly penalty due after one (1) month from the payment due date, and on the same date every month thereafter, on the amount of tax that has not been paid to date.

The voluntary disclosure penalties that are applicable to the difference between the tax declared and the tax due are now linked to the period during which the taxpayers amend the previously submitted VAT returns and range between 5% (in case the voluntary disclosure was submitted within 1 year from the due date of tax return or tax assessment or refund application) and 40% (in case the voluntary disclosure was submitted after the 4th year). 

Please refer to the Cabinet Resolution No.49/2021 for a comprehensive list of the amended administrative penalties for violations of tax laws in the UAE.

2. Calculation of penalties

The new resolution stipulates that the payment due date for the purposes of calculating the late payment penalty shall be as follows:

  1. 20 business days as of the date of submission of voluntary disclosure.
  2. 20 business days as of the date of receipt of a tax assessment.

The above overrides the application of late payment penalties retrospectively from the due date of filing of the tax return subject to amendment or assessment. 

3. Discounts for previously imposed penalties 

Administrative penalties - that have not been paid - imposed before the effective date of the new resolution will be reduced to 30% of total unpaid penalties if all of the following conditions are met:

  1. The penalties were applied under the previous Cabinet Resolution No. 40/2017; 
  2. The registrant has paid all taxes due by 31 December 2021; and
  3. By 31 December 2021, the registrant has paid 30% of the total administrative penalties due and unpaid by the effective date of the new resolution (i.e. 60 days as of 28 April 2021).

4. Effective date of the new Cabinet Resolution 

The new resolution shall be effective after sixty (60) days from the date of its issuance on 28 April 2021, i.e. effective as from 28 June 2021.

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What is financial auditing and Why Are Audits Necessary?
  • Auditing
  • 2021-12-14

What Is Financial Auditing?

A financial statement audit involves performing a detailed evaluation of a company’s financial records. Regular financial statement audits are essential to every business – particularly those that are undergoing rapid growth – when it comes to tax planning, legal compliance, and the ability to develop an accurate budget. However, sifting through countless mountains of paperwork can undoubtedly put you behind schedule when you are trying to manage a business. While there are many reasons why your business may need a financial statement audit

During a financial audit, a company’s accounting records and financial statements are examined. In the process, any issues are uncovered and documented in a final report. Sometimes the audit is carried out by an external auditor and sometimes by a committee within the company itself. External specialists know how to conduct professional financial audits and understand what to focus on. Internal audits are usually held in regular intervals, such as yearly or quarterly.

What are the benefits of an audit?

Audits can be incredibly beneficial to the growth of your company. A successful report can even help improve your credit rating and make you more eligible for financial business loans. It may even lead to lower interest rates and determine eligibility for certain types of loans which may be more difficult to apply for.

You will also be able to prove to investors that your company is reliable and can be trusted. This is not only a benefit for potential shareholders but can also improve the image of your brand in general.

By conducting an audit, you are able to promote accountability which will help employees be more organized and work more efficiently. Additionally, it helps you gain perspective and insights into problems and areas that could be improved.

For businesses, it’s very important to be transparent and accountable. Financial audits are relevant to companies in all industries and can increase confidence and trust in your brand.

It can even make your accounting easier since you will be motivated to organize your process better and be highly detailed when keeping records.

 

Why Are Audits Necessary?

An audit is important because it provides credibility to financial statements in your company. The credibility provided by an audit goes a long way to save you from many hassles and delays in the business world. The purpose of audits is to ensure that a company or business keeps accurate records and follows proper accounting principles.

Audits assure shareholders that the accounting records presented in the financial statement are fair and accurate. In addition, with the help of audit reports, companies can improve their internal controls and systems. And, if your company is audited, it can increase your chances of improving cash flow through financing, investors, etc. (more on that later in the article).

 

Reasons to audit your financial statements:

Detecting and Neutralizing Fraudulent Activity:- Running a business and analyzing your finances can be an overwhelming task. Paying attention to every detail of your daily operations while sifting through hundreds of documents can affect your company negatively. With so many tasks at hand, discovering possible fraud – and neutralizing it swiftly – can be difficult for business owners.

A financial statement audit will allow you to have a detailed report on your finances. Having accurate information about every business decision over a set period places you in a better position for identifying whether fraud has occurred, and if so, when and to what extent. Tying into the point above, a financial statement audit can help you boost your credibility with stakeholders and investors, demonstrating that your company is managing its funds vigilantly and appropriately.

Expanding your Business:- Growth and profitability should be among the top focuses of any company. As your business expands and adds more branches or employees, so does the need for tight financial controls and efficient decision-making. A financial statement audit can help you determine the best courses of financial action to help your business continue its growth. If you are thinking about expanding your business, then you may need an audit that lets you know where your company stands financially – and where it can be improved.

Timely and Accurate Information:- Information is a powerful tool which can be used to drive the future success of the company. In saying this, the information must be both timely and accurate. If the information received to make decisions is accurate, but a year out, to what use is the information? Conversely, if the information is timely, but incorrect, a misstep is likely. Our firm works with a lot of small and medium sized companies and a common theme we find is that when management has no outside statutory requirements, the timely and accurate close of the books suffers in lieu of the day-to-day operations. We field calls all the time from companies looking for reviews or audits many months after the year-end because a requirement has suddenly come about. In many of these cases, the books are still not closed. Having an annual review or audit on the calendar each year sets a precedence for management to focus on annual closings. It now becomes a bit of an annual report card for your accounting team. Management now knows that there is an expectation for timely annual information which hopefully results in timely monthly information throughout the year.

Our firm also works with management to ensure financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  We find that many small to medium sized companies prepare their financial statements on a cash basis. Firstly, this is not in compliance with GAAP and secondly it does not provide ownership with the complete picture of what took place during the year and how it may compare with previous years. Also, many industry standards and ratios are based on GAAP reporting, therefore when ownership is comparing the results of its company to the industry, the results may be deceptive. A review or audit will take a look at the accrual-based accounting as well as provide footnotes to users that provide additional information about the financial health of the company.

As a business owner, you may be so focused on operations or may not be versed enough on GAAP reporting that you cannot properly assess the performance of your accounting team, which brings us to our second point.

Improving Your Operations:- Running and keeping a business afloat in today’s economy requires a high level of focus and control. While some business owners have a management background and experience with finances, many others might not have the same luck. If you don’t have enough financial expertise, or no experience at all, obtaining internal audit services is in your company’s best interests.

It’s understandable that business owners want their finances to be in top condition, to make new investments, and ultimately, make their business grow. However, business growth and development requires having funds – and further, having an accurate, comprehensive picture of how those funds are being allocated. A financial statement audit allows business owners to see the bigger picture. An accurate report will let you make better decisions for improving your business’ operations and future development.

Audit Allows One:-

  1. To get a reliable idea of ??the adequacy of the reality of financial and accounting reporting
  2. Identify the facts of incompetence of employees and deliberate misrepresentation of accounts
  3. Comply with mandatory requirements of law, bank and counterparty
  4. Get an idea of ??the compliance of accounting and tax accounting with regulatory requirements
  5. Assess the system of internal control of the client for compliance with regulatory requirements, scale and nature of the activity
  6. To identify significant risks in the tax sphere and in relations with other enterprises and individuals
  7. To Identify and use all legitimate opportunities for tax optimization.

On the basis of the information received during the audit, develop proposals for the elimination of identified shortcomings, as well as control the results of their implementation.

Mandatory audit is conducted annuall:- Compulsory audit of the accounting (financial) statements of organizations whose securities are admitted to trading at stock exchanges and (or) other trade organizers on the securities market, other credit and insurance organizations, non-state pension funds, as well as consolidated reporting is conducted only by audit organizations. Thus, it is important to engage a professional that provides internal audit services for you.

 

 

 

 

 

 

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Various Ways To Improve Your Accounting Strategy During An Economic Downturn.
  • Accounting
  • 2021-12-05

During these difficult times of the Coronavirus pandemic, there has been a lot of discussion about the different government programs available to help small businesses weather the storm. However, there are several internal things that businesses can do to help them make it through an economic downturn. Below are the actions that all businesses should be doing during a downturn in the economy.

1. Adjust your strategy and long-term goals. - While focusing on putting out fires in the short term is important, your business plan should focus on long-term business continuity and profitability. Your accounting team is there to help you sort out your options.

Look at the profitability of each of your products and services. Is everything profitable? Are some products or clients more profitable than others? Have your accounting team do a thorough financial analysis, and use the results to build a new, more profitable business strategy.

 

2. Know where you’re making and losing moneyRevise your revenue forecast to factor in the current economic climate so you have real numbers in your budget for the rest of the year. Consider which of your products, services or clients are profitable.

For one of our clients, our accounting team assessed the profitability of each of its customers and products. Through this analysis, we suggested variable-based pricing and to shift its sales and marketing to its most profitable customers. In less than two months, it removed 20% percent of its customers so that it could focus on the more profitable ones.

At first, this might sound like a loss, but cutting the least profitable clients actually took this client out of the red, and its revenue didn’t drop at all. Once it had a clear picture of who its most profitable clients were, it narrowed the focus of its new client outreach. The result? Its compounded annual growth increased by 40% per year.

 

3.Get aggressive with collectionsAccording to the partner of a consulting firm, "when business is good, companies tend to become lazy about collecting on receivables. This can prove dangerous in a recession." Assume that the average collection period for your industry is 45 days, but your company is at 51 days. After bringing that collection period down to the industry average, keep working to get it down to 40 days. Being tough with customers may be unpleasant, but it's an important safeguard against the effects of a prolonged economic Downturn.

 

4. Ask yourself what your business truly needsThe Covid-19 pandemic has made us reflect on the merits of what we buy, asking ourselves, “Is this product really essential”? Ask yourself about your overall operating costs, especially those that are recurring month over month. Look at your credit card statement; for each item, ask yourself: Would I buy this again? If the answer is no, cut it. Cut recurring subscriptions you hardly use. Are there items that just keep hitting your credit card that you don’t really need? Do you know your margins? How can you maximize those margins? 

Do make sure not to cut the wrong things. To foster business growth, consider putting more into business development and marketing. Don’t cut anything that helps you minimize risk, such as insurance, which can be a lifesaver if the unexpected occurs.

5. Focus on QualityDon’t let being understaffed impact your level of service and quality of your product. Options include freelancers, consultants, and part-time employees. One advantage of a slowdown is that hiring gets easier because there are more candidates from which to choose due to layoffs and other cutbacks.

 

6. Manage Inventory BalancesTypically, during a slowdown, there is an imbalance between sales and overstocked inventories. One possibility is converting inventories into cash. Monitor the results, keeping an eye out for those products that can tolerate even leaner inventories or that should be eliminated from your stock. This way if sales drop significantly, less of your cash is locked into unproductive assets.

 

7. Analyze Your PricingA recession is the last time you want to increase your pricing, so understanding your cost structure is essential to drive down costs and optimize profits. If your cost analysis shows that your current pricing is not enough to cover costs and provide a reasonable profit, you must find ways to be more efficient rather than increasing your price.

 

8. Ask what you need right now and define your backup planHow and when are you receiving your cash, and when do you need it? Compare this to your revenue forecast. Where can you reinvest? If you see cash-flow issues, can you renegotiate payment dates with your vendors or offer to make payments in chunks? Your accounting team can help you get creative without burning bridges with your long-term business partners.

 

If cash is tight, what’s your backup plan? Maybe you can acquire a line of credit from a bank or gain family or friend funding, an SBA loan, or one of the government’s current programs, such as a Paycheck Protection Program or EIDL loan. For government programs, your accounting team needs to be well versed in the specifics so you don’t miss out on a loan because of a clerical error. Some outsourced accounting firms also have special relationships with banks and can help you access capital.

If you are looking for best accounting firm in dubai who have talented accounting team then risians accounting is the best UAE accounting firm

Leverage your accounting team and consider “zero-based budgeting,” which helps you to assess what’s essential and what’s not. With their help, you can create the foundation for a strategy that helps you get through this difficult time so you come out highly competitive and ready for growth. 

Accountants are available to help small businesses survive through these difficult times. If you can’t complete this process internally or don’t have qualified accountants on your team, consider outsourced accounting and HR services. Many companies hire outsourced back-end office teams because for the same cost as a full-time person, they can provide specialists who work with you to find more technical and nuanced solutions.

Regardless of your strategy, speak with your accounting team about these ideas, and find out what their plan of attack is. If they are not able to help you develop a business continuity strategy and future goals, then they may not be the right team to help you survive the current economic downturn.

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What is risk management and why is it important?
  • Auditing
  • 2021-12-02

Risk management activities are just as vital when it comes to personal finances. By definition, risk management is the process of understanding, analyzing and addressing potential risks to ensure objectives are achieved. Risk management is a process dedicated to identifying risks within a business and developing procedures to mitigate or eliminate those potential risks. An effective system helps maintain the safety of staff, whilst protecting business resources.

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Risk management has perhaps never been more important than it is now. The risks modern organizations face have grown more complex, fueled by the rapid pace of globalization. New risks are constantly emerging, often related to and generated by the now-pervasive use of digital technology. Climate change has been dubbed a "threat multiplier" by risk experts.

A recent external risk that manifested itself as a supply chain issue at many companies -- the coronavirus pandemic -- quickly evolved into an existential threat, affecting the health and safety of their employees, the means of doing business, the ability to interact with customers and corporate reputations.

Businesses made rapid adjustments to the threats posed by the pandemic. But, going forward they are grappling with novel risks, including how or whether to bring employees back to the office and what should be done to make their supply chains less vulnerable to crises.

 

What is Considered Risk Management?

We know based on the definition of risk management that it is the methodology used to mitigate adverse consequences that result from threats and uncertainties. Put simply, this means developing a strategy to avoid losing money when unexpected events occur.

In corporate finance, this could be a succession plan that would be put into effect when a key stakeholder of the company is no longer able to perform their duties. In personal finance, however, there are many different situations which could result in financial hardships that you will want to plan for. This planning process is risk management. The primary goal of personal risk management is to protect one’s goals, dreams, treasure and personal well-being from the “what ifs” in life.

 

Benefits of Risk Management For Businesses.

Risk management plans offer several benefits that make them a worthwhile endeavor for every business. For example, risk management plans help companies to identify the potential risks they may face. Being aware of these risks allows businesses to make plans to avoid specific risks or deal with them when they arise.

Effectively managing risks that could have a negative or positive impact on capital and earnings brings many benefits. It also presents challenges, even for companies with mature governance, risk and compliance strategies.

 

Benefits of risk management include the following:

  1. Increased awareness of risk across the organization;
  2. More confidence in organizational objectives and goals because risk is factored into strategy;
  3. Better and more efficient compliance with regulatory and internal compliance mandates because compliance is coordinated;
  4. Improved operational efficiency through more consistent application of risk processes and control;
  5. iIproved workplace safety and security for employees and customers; and
  6. A competitive differentiator in the marketplace. 

The following are some of the challenges risk management teams should expect to encounter: 

  1. Expenditures go up initially, as risk management programs can require expensive software and services.
  2. The increased emphasis on governance also requires business units to invest time and money to comply.
  3. Reaching consensus on the severity of risk and how to treat it can be a difficult and contentious exercise and sometimes lead to risk analysis paralysis.
  4. Demonstrating the value of risk management to executives without being able to give them hard numbers is difficult.

 

Risk Management Process.

There are different methods of risk management for the various types of risk; however, the process generally has three specific steps:

  1. Identify the cause and nature of the risk. To use one of our previous examples, your death would leave your family to cope with the lack of income to pay debts and living expenses.
  2. Determine how much risk you are willing to retain. This could be how much deductible you are willing to assume for an insurance policy. Or it could be your choice of a living location and the associated natural disasters of the area. Generally speaking, we all assume some sort of risk every day, it is unavoidable.
  3. Determine how to handle risk not retained.  An important risk management factor is the balancing of insurance expenditures against the risks which present the most significant negative impact on your individual personal financial plan. In theory, we could insure ourselves against almost any risk but go broke paying the premiums.

This process should be followed for any risk you want to plan for, and the list of possibilities is nearly endless. As a result, it is important to identify your priorities alongside the risks most likely to come to fruition. This means every individual’s risk management plan will be as unique as their fingerprint. It is also crucial to know that risk management is never a stagnant process, you can’t just set it and forget. You should be reviewing your risk management strategy regularly and assessing whether or not it still satisfies your current needs and objectives.

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My experience in working with this team is very much a positive one. Their professionalism is refreshing. Thank you for making the process a very pleasant experience.

Ms. Arshameh Parmoun Tag Properties

We have been working with RISIANS Chartered Accountants on a couple of assignments. At all times they are professional, organized with whatever assignments we have entrusted with them. Being a approved audit firm they are well aware with the regulations and compliances. I will recommend the team highly enough and shall certainly be engaging with them again and again in future assignments.

Moin Abbas Al Ajwad Auto Works

I would overall rate team RISIANS work as exceptional. The team was successful in delivering quality audit, irrespective of the tight deadline and it was way better than the predecessor. We can definitely build more knowledge for future.

Ajit G Vernekar AL SHAFAF REPACKING SERVICES

RISIANS proactiveness and precision towards managing our accounts and helping us constantly whenever we are in need of is a dynamic quality that makes us want to recommend to any company or an individual. Looking for a great accountants without any hesitation.

Aqeeb Aqeeb Internstional
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