Year end is a busy time for businesses and accountants alike. It is that crucial period during which a company compiles a detailed report of their ledgers and accounts for the whole year. Expenses, income, audit plans, investments, salaries, each and every detail of the company is reviewed and compiled, down to the last penny. This process is complicated, lengthy, and overwhelming. However, by keeping some points in mind and making checklists, chartered accounting firms in Dubai can not only make the process hassle-free but can seamlessly submit their annual VAT returns and other accounts without any glitches.
There are 5 points which should be kept in mind while preparing the annual accounts. BS Auditing discusses how the accounting firms in Dubai can make the most of their accounting practices and annual tax-filings by maintaining a checklist, and which points the checklist should include.
1. Gathering and Analysis of Data
The first step to preparing an account by charted accounting firm in Dubai is to gather all the necessary financial data from all sources. The financial data helps analyze the overall health of a business. All financial transactions, receipts and other details help to assess how the year has been, where the expenditures were made and how they can be improved in the future. Not only this, but a well-maintained financial data also helps organize annual tax returns too.
There are three types of financial data that are important in this respect:
Balance Sheet: A balance sheet is an overview of the company’s assets, its liabilities, and equity. Usually, accountants consult the balance sheet as the key determinant of overall business performance and analysis of any possible loopholes or discrepancies.
Profit-Loss Statement: Also known as the income statement, this statement is a summary of all expenses and revenues generated. A regular profit-loss statement includes:
- Taxes
- Revenues
- Sales
- Operational costs
- Depreciation
And more.
Cash Flow: a cash flow tells where and when the money went, and where it came from. A cash flow statement is a useful insight into business operations. More expenses would mean the business is not generating as much revenues as it is having to spend. A positive statement will indicate more revenues as compared to expenses. Thus, a cash flow statement is a short but quick analysis of how a company has been doing in terms of monetary transactions.
2. Collecting Pending Dues
Before wrapping up the year-end balance sheet, it is a good idea to first clear any pending dues and collect any that the client yet has to pay. Collecting pending dues can be quite a task. Some clients need just a polite reminder, others need repetitive reminders. Then there are some who are a hard nut to crack. However, even in such situations, the truly professional chartered accounting firms in Dubai do not lose their cool. It is important to be polite. Sometimes, clients cannot pay the entire amount in whole. It is a good idea to offer practical and doable installment plans. Understanding the client’s concerns is the key. Chartered accounting firms in Dubai make their next move by understanding the true intentions and circumstances of their clients.
In case the clients refuse to cooperate, some external sources such as debt collection agencies are contacted, and their help is sought. However, this is not a common practice as accountants usually succeed in creating a middle ground that works for both parties.
3. Inventory Checks
For businesses that have an inventory, such as businesses that have a sales-based setup, inventory check is crucial. It is important for chartered accounting firms in Dubai to always look deeply into the inventory and tally items to sales. If there are any mismatches, they should be addressed. Not doing so or skipping this step can cause substantial loss to the business. It can result in lags in updating the inventory, or expired products, etc.
4. Organizing Receipts
This is something that should be done since day one of the business operations. Haphazard receipts, unorganized transaction bills can end up being a headache, not to mention the discrepancies they cause in composing final balance sheets. Accountants must remember to organize all receipts in a chronological order or according to the type of receipt. Receipts data should be entered in computers too.
Nowadays, AI tools and software have made this process a lot easier. Users simply enter the data, and the software reads, analyze and organizes it into respective order on its own. While it takes a professional to get the hang of these tools, once understood, they are not only easy to use, but make business a lot smoother.
5. Bank Reconciliation
Bank reconciliation is the process in which the accountants contact the banks and tally transactions receipt with bank records. Bank reconciliation must be an important point in the checklist of all chartered accounting firms in Dubai. This is because most of financial transactions occur via banks as they usually involve large sums of money. By comparing bank receipts to accounts ledger, accountants can identify any loopholes and then investigate the matter.
Conclusion
Chartered accountants are entrusted with the important task of compiling yearly accounts reports, bank reconciliations and file annual tax returns. These processes can be lengthy and overwhelming, and there are always chances of missing out key points. This can consequently make the process difficult and long. A prepared checklist is the ultimate savior as it prevents anything from being missed out both by the business and by the accountant. Checklists such as these prepared well in advance also make the process smooth and easy.
BS Auditing of Accounts has skilled professional team of chartered accountants who excel in their fields. Although these people need no checklists, they can help you make yours, which can come in handy in the future too.
Feel free to contact us:
• Office # 0641, Tamani Arts Offices, Business Bay, P.O. Box 111390, Dubai, UAE
• +971 4 570 7357
• +971 58 108 5690
