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What is risk management and why is it important?
Auditing 2021-12-02 From: Mr. Abbas

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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Accounting Checklist For Startups In UAE.
Accounting 2021-11-27 From: Mr. Abbas

Every business small or big needs a bookkeeper/accountant who will manage its finances. Business owners today realize more than ever before that if they are not careful about their finances, they soon won’t be in business. It can be costlier for smaller businesses to appoint a full-time bookkeeper or accountant, outsourcing this function has become very attractive to business owners and a great opportunity for bookkeepers or accountants to start up their own bookkeeping or accounting business in Dubai.

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Bookkeeping and Accounting Checklist For Startups

Bookkeeping and accounting differ in the areas they cover, both of which are vital with regard to the company’s financial health status. Bookkeeping, as the name suggests, focuses on keeping the records of transactions and cash flow up to date. Accounting, on the other hand, tends to devote itself to interpreting the financial picture the bookkeepers create and shaping that into final representative documents like profit and loss statements and balance sheets, and year to year comparisons which provide the overall picture of where the company stands financially and can give an indication of its future outlook.

Daily:-

Accounting is not an activity which you can perform at the end of the month, and everything will be good. It requires regular attention and maintenance to avoid loss at the end of the month. Here are some important accounting activities you need to check on a daily basis.

a. Check Financial Data

b. Reconcile Cash against Receipts

c. Review and Reconcile All Transactions

d. Record All Received Payments

Weekly:- 

Take the recorded daily information a step further with more intensive reconciliations using the week’s cash sheets to refresh financial data, record payments received and categorize the expenses incurred, as well as keeping your inventory list up to date. It’s also time to deposit cash received, issue invoices, schedule any bills for payment and, if you are using accounting or bookkeeping software, to be sure to back up your data.

a. Manage Record of Transactions

b. Review Outstanding Bills

c. Prepare All the Invoices

d. Project your Cash Flow Analysis

Every 2 Weeks:-

Follow up on customer invoices that are unpaid, apply any deposits they have made to their invoices, and follow up on any proposals you have made which have not yet had a reaction. 

Monthly:- 

Not every day and week is the same for any business organization. Every day brings new challenges and opportunities specifically for startups. Therefore, you need to follow this monthly accounting checklist to track your performance.

a. Balance Your Business Checkbook

b. Analyze Past and Aged Receivables

c. Check Inventory Status

d. Review Profit and Loss Accounts

Quarterly:-

In addition to the daily, weekly, and fortnightly operations, the need for more comprehensive reports and records increases. These include income statements, balance sheets, and reports on accounts receivable and payable.

 

Benefits of Starting an Accounting & Bookkeeping Firm in Dubai.

If you have characteristics of outsourcing bookkeeping accounting in UAE, here are the benefits you must know.

  1. The start-up cost for Accounting and Bookkeeping business is minimal.
  2. You can become a specialist in one accounting application for increased marketability.
  3. Its consistent work that typically takes place on a regular schedule.
  4. You can also work virtually and broaden your target market.

 

Starting an Accounting & Bookkeeping Services in Dubai.

Accounting and Bookkeeping consulting firms are one of the most popular business services to start and they’re almost always in demand. The introduction of new levies and fine-tuning of the existing taxation systems has led to unprecedented demand for accounting firms, especially those that offer integrated solutions to their clients and the scope of accounting and bookkeeping business start-ups in Dubai is increasing with every passing day. Before getting into the procedure of registering your business with the authorities, here are a few things you need to know.

Requirements to Set Up an Accounting and Bookkeeping Firm in Dubai.

1.Degree in AccountingAs a consultant, you will be engaged in providing services for businesses rather than private individuals. As an entrepreneur/professional you need to possess a degree in accounting or a related area for business setup in Dubai. It also means that you need to have an authentic certificate that proves you are a veritable accountant. However, before opening an accounting firm in Dubai, entrepreneurs need to ascertain the legality of the degree they hold. You can also take local exams to enhance the chance of approval.

2. Professional LicenseTo start any business in Dubai, you will need a license. When it comes to starting an accounting firm, you must have a valid professional license which is typically issued by the Department of Economic Development (DED) in Dubai.

3.Office SpaceIn the UAE, it is mandatory to have office space while setting up a company. Also having an office in a commercial district helps fetch clients easily. A physical working space also generates lots of confidence amongst the clients as they feel assured and comfortable dealing with an accounting firm that boasts a team of dedicated CPA’s. As a bookkeeping business start-up in Dubai, you can rent a space of your choice.

 

What Bookkeeping and Accounting Services Can Do?

Depending on whether or not you choose to outsource only the accounting, or bookkeeping services in Dubai, or choose to enlist help in both areas with the same or two different companies, these professionals can take some or all of the weight off your shoulders when it comes to keeping track of your finances.

 

However, choosing the right professionals to handle these pivotal areas of your business is vital. Before making a choice, careful research and investigation are needed to determine that you are hiring the right person to take care of your finances and maintain regular contact with them throughout your contract so you don’t become disconnected from that sector of your startup.

 

 

 

 

 

 

 

 

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How to Register VAT for a Freelancer in the UAE.
Taxation 2021-11-22 From: Mr. Abbas

It has been a few months since the introduction of VAT in the UAE, and businesses are settling well into the VAT regime. Initial apprehensions of compliance and regulation are giving way to confidence in the system. Businesses due to their size and expertise have understood the rules and adapted well. There is increased VAT compliance by the individuals who have to follow some processes in order to remain in business. Unlike in other countries, freelancers from the UAE are now encouraged to properly create and manage their financial records for the purpose of taxing. After a freelancing business has been registered with the government, the individual is given a TRN number which they ought to mention on every invoice. For transparency purposes, freelancers from the UAE are now required by law to provide VAT invoices to their clients. These invoices should have their serial numbers and be in their sequence, mention the TRN number, and must have the total service cost and the VAT stated separately.

Understanding the Eligibility of Registering for VAT

Freelancers are divided into three categories for the purpose of VAT, and they are:

  1. If the revenue is more than AED 375,000, then the freelancer has to register for VAT.
  2. If the revenue is between AED 187,500 and AED 375,000, then it is optional for the freelancer to register.
  3. If the revenue is less than AED 187,500, then the freelancer cannot register.

Revenue, in this case, includes reverse charge supplies, imports, exports i.e. the zero rated supplies, and the taxable supplies. It is also important for the freelancer to secure an income of over AED 187,500 in the past twelve months.

Steps To Register For VAT In UAE

If you are eligible to register for VAT in UAE, you will have to follow the steps given below:

1. Confirm whether you are eligible for VAT or notAs indicated earlier, freelancers are divided into three categories for the purposes of taxation. Check which bracket you fall into as per your income, whether you are eligible for a VAT or not. If yes, proceed to the next steps.

2.Acquiring a licenseA freelancer can only register for VAT after he has acquired a license. The freelancer has to get his employer’s permission to get a license, and then apply for one. There are multiple free zones in the UAE that offer freelancing licenses for a price. You will have to find out more about the free zones and their respective costs before getting licensed under one.

3.Register Yourself OnlineThe procedure of VAT registration is online based. After obtaining the required license, the freelancer must go to the portal of the Federal Tax Authority and create an account. After logging in, they need to register for VAT. They should keep the necessary documents handy while registering for VAT.

A list of all the documents required for VAT registration is given below:

  1. Certificate of Incorporation
  2. Trade license
  3. The Memorandum of Association (MOA) or The Articles of Association (AOA)
  4. Description of Business Activity
  5. Projected Future Revenues
  6. Freelancer Passport and a copy of the Emirates ID
  7. Bank Account Details
  8. Revenues Details for the last 12 months
  9. The Agreement by the Sponsor and the Custom Details will only be required if the freelancer deals in such kind of business.

After submitting all the documents mentioned above, the registration will be approved by the concerned Ministry, and the freelancer would be assigned a Tax Registration Number also known as TRN.

4. Maintaining financial recordsThis is an important step for you, even if you are not eligible to be registered for VAT. After all, you might not be eligible for VAT registrations, but your customers might be. So, they might need you to draft the invoices in a certain format or manner. Thus, you will have to keep your books updated and check all the financial records regularly.

VAT compliance also involves abiding by the following guidelines:

  1. Mentioning the TRN on each invoice drafted by you
  2. Keeping invoices numbered in a sequence
  3.  
  4. Disclosing the additional VAT and the total cost separately

5.File your tax returnsFreelancers have to file their tax returns quarterly without fail. Furthermore, ensure that your records are right as errors and discrepancies can lead to heavy penalties.

Like any other country, in the UAE it is essential to abide by the law to avoid heavy fines. In the past, companies that failed to abide by the law have received heavy penalties and even lost their license. It is advised that before you start working in the UAE, you must be well-versed with the laws in the UAE. You can get in touch with the relevant authorities if you have any questions. There are many government websites to assist you as well.

 

Get The VAT Service in Dubai From Expert

Risians Accounting is a leading accounting firm in Dubai. We have a special team who are experts in VAT Taxation or we can say master in this. They have 30+ years of working in taxation. They know well how to register, how to fill, how to claim for VAT return, etc. Our team knows the hundreds of ways that how we can save money on VAT without getting any plenty and legal action by FTA. We always say publicly we are the best UAE VAT service provider because of our team. If you have concerns related to taxation, accounting, auditing, etc feel free to contact us and get a free consultation. 

 

 

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VAT Refund Guide for EXPO 2020 Participants & Tourists
Taxation 2021-11-13 From: Mr. Abbas

What Is A VAT Refund?

A VAT tax refund is the reimbursement of Value Added Tax paid on certain purchases. VAT is charged in many countries throughout the world. Non-resident tourists and companies located outside those countries are often eligible for VAT tax refunds for goods and services purchased for export or business purposes. There are certain restrictions and requirements that must be followed to be eligible for a VAT tax refund.

VAT Refund Expo 2020:

The UAE government has recently introduced Cabinet Decision No. 1 of 2020 on the “Refund of VAT paid on Goods and Services connected with the Expo 2020 Dubai”. Offices of the Official Participants will be able to claim a refund on the VAT incurred by them on the import or supply of certain goods and services which will be mentioned below.

Offices of the Official Participants are the representative offices of the Official Participants for the whole period of preparation, operation, dismantlement of the pavilion and execution of all necessary operations and various other activities for participation in the Expo 2020 Dubai.

 

Refund Application Process:

VAT registered participants can claim their Expo 2020 VAT refunds through normal.

For registrants in the FTA system:

  1. Log into the FTA account.
  2. Apply for refund as per the process available in the VAT refund user guide.
  3. The FTA will review and approve the request within 20 working days.

 

For Non-Registrants In The FTA System:

VAT Non-Registered applicants shall need to proceed with VAT refund application through a special VAT Refund request and must provide following information to the FTA.

  1. The official participant must provide the following documents to the EXPO 2020 office: (Submit the Special Refund sheet, Tax Invoices, Bank IBAN letter, EXPO license).
  2. The EXPO office will review the submitted documents and forward the request to the FTA through email to approve the refund amount claimed.
  3. The FTA will review and approve the refund requested and transfer the amount to the participant’s bank account.
  4. Reference number and date of the previous refund claim.
  5. Details of the supplies supported by original tax invoices / customs declarations.
  6. Description of the Goods and Services to demonstrate that they fall under the categories of eligible Goods and Services. 

In addition to the above following Supporting documents must also be provided:

  1. Copy of the Certificate of Entitlement issued to the Official Participant.
  2. Copies of the tax invoices, including simplified tax invoices. Only invoices issued
  3. to the eligible persons are allowed to be used to claim the refund.
  4. Copies of customs declarations issued in respect of imported Goods.
  5. -Copies of an employment ID that proves the employment of the personnel in
  6. respect of whom the VAT is being reclaimed.

 

What Type of VAT can be Reclaimed?

In normal scenarios, only VAT incurred in UAE for Goods and Services where they are connected or intended for making taxable supplies is refundable, however, if it’s not connected or intended for making taxable supplies, then it’s not refundable.

 

  1. However, with the introduction Cabinet Decision No. 1 of 2020 for the duration for Expo 2020, Offices of the Official Participants can claim VAT incurred on the following five categories without the need to use them for taxable supplies;
  2. VAT incurred by the Official Participant on Goods and Services in direct connection with the construction, installation, alteration, decoration, and dismantlement of their exhibition space.
  3. VAT incurred by the Official Participant on Goods and Services in direct connection with the works and activities of organizing and operating the Official Participant’s exhibition space and any presentations and events within the Expo 2020 site.
  4. VAT incurred by the Official Participant on Goods and Services relating to the actual operations of the Official Participant, provided that the value of each Good or Service for which the Office of the Official Participant makes a claim is not less than AED 200.
  5. VAT incurred by the Official Participant in connection with all operations, services and activities provided for the purpose of participation in Expo 2020 Dubai, whether located within or outside the boundaries of the Expo 2020 Dubai site.
  6. VAT incurred on import of Goods for personal use of the Official Participant’s Section Commissioner-General, Section Staff and the Beneficiaries.

 

How Can We Help You?

Our VAT experts can offer guidance in connection with your activities related to EXPO 2020. The list includes license, registration with FTA, eligibility of input tax recovery, VAT returns and submission of VAT refund application. We support participants through administrative tasks to ensure full compliance with the VAT laws and allow them to recover VAT expenses incurred in the UAE.

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What Are The Duties of An Auditor Under UAE-AML?
Auditing 2021-11-09 From: Mr. Abbas

What is an Audit?

An audit is an impartial examination and evaluation of the accounting records of a company by a statutory auditor. The purpose of the audit is to verify that the records are an accurate and fair  representation of the company’s transactions, and involves obtaining evidence about the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.

This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. 

What Is an Auditor?

An auditor is a person authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws. They protect businesses from fraud, point out discrepancies in accounting methods and, on occasion, work on a consultancy basis, helping organizations to spot ways to boost operational efficiency. Auditors work in various capacities within different industries.

Hire the top Dubai auditors team and to easily accomplish your company auditing goal. Our auditors in Dubai have 20+ years of working experience in auditing, by using their experience they perform auditing activity effectively and smoothly and deliver the high informative and useful auditing reports that help the business organization.

Key Points:-

  • The main duty of an auditor is to determine whether financial statements follow generally accepted accounting principles (GAAP).

  • The Securities and Exchange Commission (SEC) requires all public companies to conduct regular reviews by external auditors, in compliance with official auditing procedures.

  • There are several different types of auditors, including those hired to work in-house for companies and those who work for an outside audit firm.

  • The final judgment of an audit report can be either qualified or unqualified.

 

Types of Auditors:

  • Internal auditors are hired by organizations to provide in-house, independent, and objective evaluations of financial and operational business activities, including corporate governance. They report their findings, including tips on how to better run the business, back to senior management.

  • External auditors usually work in conjunction with government agencies. They are tasked with providing an objective, public opinion concerning the organization's financial statements and whether they fairly and accurately represent the organization's financial position.

  • Government auditors maintain and examine records of government agencies and of private businesses or individuals performing activities subject to government regulations or taxation. Auditors employed through the government ensure revenues are received and spent according to laws and regulations. They detect embezzlement and fraud, analyze agency accounting controls, and evaluate risk management.

  • Forensic auditors specialize in crime and are used by law enforcement organizations.

The purpose of an audit for your business in Dubai:

The general reason for an audit is to create an independent and impartial view on the information offered in the financial statements, whether that information reveals the true and fair interpretation of the operations of that business or not. For example, the auditors will prove and give their opinion on whether the reported incomes, payments, profit/loss, possessions, obligations, and equity are specified at their true and fair standards or if there is any material misstatement.

Audit requirements for listed companies in Dubai:

In the UAE, the following types of companies must have an audit at any time in the financial year if they are:  

  •  joint-stock companies;
  •  limited liability companies; 
  •  affiliations or partnerships limited by shares;
  •  any other business which is mandatory by any other law. 

Small companies in Dubai are audited when they are required to do so by any supervisory unit or financial institution or to meet any other special condition.

 

Power and Duties of an Auditor:

  • The auditor has a right to receive information and explanation regarding the matters which are necessary for the performance of his duties. He needs to know whether:

  • The company makes loans and advances against proper security and the terms of these are prejudicial to the interests of the company.

  • Transactions that merely represent a book entry are prejudicial to the interests of the company.

  • In the case of a company that is not an investment or banking company, it sells the assets. They are in the form of shares, debentures, and other securities at a price less than their purchase price.

  • The company shows the loans and advances that it makes as deposits.

  • It charges personal expenses to the revenue account.

  • Every auditor has a right of access to the books of account and vouchers of the company at all times, whether they are at the registered office of the company or at any other place.

  • The auditor of a holding company also has a right of access to the records of the subsidiary company if they are necessary for the purposes of the consolidation.

  • An auditor also has a right to receive notice of any general meeting. He may attend it himself or through his authorized representative who is also qualified to be an auditor. He also has a right to be heard on any part of the business which concerns him.

 

 

 

 

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