Accounting plays a significant role in small businesses. Small business owners in Dubai are jam-packed with responsibilities of managing and maintaining day to day activities. However, accounting should never be considered as an afterthought. Accounting helps to achieve financial forecasts and the right insight could save your business at tough times.
Have a look at the top seven accounting tips for small business,
Manage your cash flow
When it comes to small businesses in UAE, it’s important to keep a pulse on your cash flow. While performing weekly or monthly financial reviews, consider having a cash flow statement. These statements give you a broader understanding of the cash movement within your company. Monitor the income direction and visualize payment cycles as well as seasonal expenses.
Log expense receipts
Maintaining expense reports is one of the important accounting tips for small businesses. Dubai has huge small enterprises and most of the companies come up with effective record keeping. Saving receipts of every purchase makes record keeping easier and avoids future cash flow issues.
Have an accounting software
Most of the UAE small businesses use effective accounting software to manage all the accounts, sales and marketing concepts. Bookkeepers usually have experience and knowledge of working on your books. Accounting software makes sure you aren’t racking up the errors.
Hire professionals to handle taxes
Entrepreneurs in Dubai try saving money by accomplishing their taxes themselves. But, not having access to accounting expertise may cost your business a lot of money down the road. While doing it on your own, you could miss a deduction you qualify for or underpaying your bill may lead to penalties. Professionals utilize several unique accounting tips to put you in the best financial situation. So, it’s essential to hire a tax professional with up-to-date knowledge of ever-changing tax laws.
Chart your accounts
Several small businesses in UAE chart their accounts for a well-rounded picture. Each key aspect of your business should have space for logging its transactions and balance of accounts should be adjusted accordingly.
Keep track of details like accounts receivable, accounts payable, sales, purchases, payroll expenses, owners’ equity, and retained earnings. Make it more detail-oriented for better results.
Double-entry bookkeeping is an effective accounting tip for small businesses. Most of the businesses in Dubai use accounting software rather than physical books. Whenever you make a purchase, record not only the expense but also what you have gained from the transaction. This style of bookkeeping is the best way to represent where your money is spent. This allows you to make the best decisions for your business.
Know the difference between invoices and receipts
Mixing up invoices and receipts is common for business owners to mess up their books. Simple piece of accounting advice is to know the difference between these two. Invoice is a bill sent to customers after they’ve received your services. Invoices remind customers that they owe you money. Receipt is proof that a transaction is complete. Managing your invoices and receipts will balance your account books!
Most of the small businesses in Dubai and UAE follow effective accounting tips and come up with excellent ROI every year. Use these accounting tips, look into the future and effectively utilize existing assets. Forecast by analyzing your financial data, also data-backed analysis ensures smart investment moves. Accounting turns as a significant milestone in your business evolution!