Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation. There are several standard methods of bookkeeping, including the single-entry and double-entry bookkeeping systems. While these may be viewed as “real” bookkeeping, any process for recording financial transactions is a bookkeeping process. Good bookkeeping plays a vital role in helping businesses compile accurate reports to meet these obligations, but it can also directly benefit a business’s bottom line. Here’s how.
Claim the right tax deductions
Good bookkeeping can step in to ensure business owners don’t overlook or disregard (and therefore pay tax on) allowable expenses.
By recording every payment ever made to suppliers, together with matching receipts or invoice numbers, good bookkeeping can help businesses make sure they never forget to claim a business expense that should have been tax deductible.
Improve your business’s level of working capital
Good bookkeeping can also help make businesses aware of past-due trade debtors, alerting the owner to which customers should be sent friendly reminders (or charged interest), to ensure invoices are paid quicker.
In this way a good bookkeeper can improve a business’s level of working capital, helping to bring cash into the business faster than it’s paid out to suppliers.
Don’t pay too much VAT
VAT-registered businesses have an obligation to keep records of all their sales and purchases, as well as file VAT Returns with FTA on a quarterly basis.
A good bookkeeper can obviously help a business keep track of the VAT it charges on every sale and the VAT it pays on every purchase. Plus, good bookkeeping can help ensure a business doesn’t pay too much VAT to FTA when filing VAT Returns.
Spot duplicate (or fraudulent) invoices
With research revealing that 1 in 30 UAE businesses have been duped by fake invoices, good bookkeeping can help businesses avoid invoice fraud.
Since a good bookkeeper will insist a small business always raises purchase orders and ensures an invoice is only paid after it has been matched with a corresponding order number, fraudulent invoices are more likely to be recognised and avoided.
Beyond fraud, a further 34% of SMEs in the UAE have mistakenly paid duplicate invoices, and good bookkeeping can help here too.
At Alya Al MArzooqi Auditing Chartered Accountants, our accountants are fluent in accounting and understand the value of good bookkeeping. Our services are specifically geared towards supporting the growth of UAE’s businesses.
Get in touch with us to discuss your requirements on Tel: +971 4 876 9377 Mob: +971 52 475 4007, +971 52 975 0690
