Accurate bookkeeping and timely audits help companies organise and save on penalties and fines
Bookkeeping is the process of recording a company’s financial transactions, and is the first step towards a systematic accounting process within your organization. Businesses tend to grow when classification, reporting and analysis of financial data takes place consistently, and this cannot happen without frequent, organised and accurate bookkeeping. Poor bookkeeping can also lead to government fines and penalties.
The importance of undertaking regular accounting and bookkeeping services cannot be emphasised enough. A few reasons for this are:
So, what does getting expert accounting and bookkeeping services in Dubai look like?
The business landscape in the UAE has undergone a recent change with the introduction of the Value Added Tax (VAT) on 1 January 2018. The 5% tax on the consumption or use of goods and services, is levied at each point of sale. A business must register for VAT if its taxable supplies and imports exceed AED 375,000 per annum, while it’s optional to register for businesses whose supplies and imports exceed AED 187,500 per annum.
Taxation, Penalties and Fines
Under the Federal Tax Authority and Cabinet Resolution No. 40 of 2017, penalties between AED3,000 to AED50,000, may be levied on organisations or individuals, according to the intensity of the violation relating to company accounts. Under the Federal New Commercial Company Law No.2 of 2015, Article 26 requires every business organisation to keep accounting records for a period of five years from the end of each financial year of the company. Equally, Article 348 levies a fine of between AED50,000 to AED500,000 for failure to keep accounting records explaining business transactions. Under Article 349, a company may also be fined between AED20,000 to AED200,000 for failure to submit the tax-related data, records and documents in Arabic to the authorities, when requested. Individuals or the company are also liable to additional first- and second-instance fines and penalties for failure to declare their accounting records and books on time.
Benefits of outsourcing
While every company conducts some manner of internal auditing, hiring outside expert accounting and bookkeeping services has its merits. Internal auditing employs the company’s own people to look over its books. These results may be biased or provide an inaccurate account of finances because of vested interests. Outsourcing accounting and bookkeeping services also lower costs, decreases the workload on the employee pool, as well as provides expertise from people trained to undertake the job.
Maitha Alzaabi Auditing's tax professionals are trained to not only help companies manage and maintain their accounts, but also helps organizations determine if the business is required to register for VAT. They also help navigate the paperwork and certificates required for the process.