Auditing service accounts
Accounting policies in Dubai
Every business operating in Dubai must adhere to certain accounting policies regulated by the UAE federal laws.There are different accounting standards and laws that apply to businesses in Dubai, depending on their legal structure, size and activities. Some of the common ones are:
GAAP (Generally Accepted Accounting Principles) which are the basic rules and principles for corporate accounting.
IFRS (International Financial Reporting Standards) which are the global standards for preparing financial statements.
UAE VAT law which is the tax law that regulates the value-added tax in the UAE.
Federal Law No 2 of 2015 on Commercial Companies which is the main law that governs the formation and operation of companies in the UAE.
Free zone laws which are the specific laws that apply to companies registered in free zones in Dubai, such as DIFC or DMCC.
Some of the factors that affect the choice and application of accounting policies are:
The legal structure of your business, whether it is a sole proprietorship, a partnership, a limited liability company or a branch of a foreign company.
The location of your business, whether it is in the mainland or in a free zone. Different free zones have different regulations and requirements for accounting and auditing.
The industry and activity of your business, whether it is in manufacturing, trading, services, or finance. Different industries have different accounting standards and practices.
The size and complexity of your business, whether it has multiple branches, subsidiaries, or affiliates. Larger and more complex businesses may need more detailed and comprehensive accounting policies.
The record keeping policy as well as cash receipts, bank transactions, etc.in Dubai is regulated by the UAE Federal Law:
Record keeping policy
The record-keeping policy mandates businesses to retain their books for a period of at least 5 years. This duration extends to 15 years for real estate businesses.
Cash receipts
All cash receipts, whether received through cash, checks or electronic transfers, must be recorded and maintained meticulously.
Bank transactions
Any bank transactions, including deposits, withdrawals and fund transfers, should be correctly recorded. The relevant bank statements must be kept on file.
VAT returns and return filing
Businesses must file VAT returns and maintain a record of these filings. All VAT-related documents (e.g. tax invoices, tax credit notes and adjustment notes) must also be kept.
Other supporting documents
Other documents that may need to be recorded include wage and salary records, plus customs records and inventory records.
How to keep your business accounting records in order in Dubai
Maintaining organized and efficient accounting records can be achieved by hiring accounting staff or outsourcing accounting services.
Hiring accounting staff
Employing an in-house team of accountants can ensure personalized and prompt services.
Outsourcing accounting services
However, outsourcing can provide specialized services while saving costs and efforts. Services typically outsourced are:
Payroll
A professional service can efficiently manage payroll ensuring timely payment as well as accurate records.
Accounts payable
Managing debts and payments can be outsourced once your goal is to maintain liquidity and financial stability.
Accounts receivable
Professional services can ensure prompt payments, thus reducing the financial burden.
Bookkeeping
Outsourced bookkeeping can ensure accuracy, timeliness and compliance with relevant laws.
Budgeting
Professional budgeting can help control costs and optimize profit.
Tax accounting
Expert tax accounting services can minimize liability and at the same time ensure compliance with the tax laws.
Setting up/reviewing of books of account
Accounting services can set up new books or review existing ones for accuracy and completeness.
Monthly management reports
These reports, prepared by outsourced services, provide valuable insights into the financial health of the business.
General advice regarding accounts & finance-related matters
Professional advice is helpful while making informed financial decisions.