Tips for developing and improving an accounting system for a new business in UAE
Why do you need a better accounting system?
A sound accounting system is an important factor for businesses of any size. It does not depend on how big or small a business is. What matters the most is what comes in and goes out of your business to keep a record of all your incomes and expenses. A business that neglects to maintain a good accounting system is one that may suffer huge losses in the future due to inefficiency. An accounting system helps the business owners and the managers to measure the growth of the business accurately. There is multiple accounting software available. A perfect accounting system starts and ends with an apt accounting software that is used in the business's bookkeeping process. An accounting system with better software is mandatory for any type of organization, whether it is a for-profit or non-profit organization. Certain software can also help you pay bills and send customer invoices. Using accounting software in a business organization has many advantages also.
What can you do to set a better accounting system?
Setting up an accounting software will improvise the time-consuming manual bookkeeping and accounting systems. Such platforms can give you your P&L statement, Balance sheet, and cash flow statement in a wink of an eye as they have built-in reports that are automatically updated. The combination of good accounting software and an efficient accounting system will help you to maintain a sync between all your financial data, that you will be able to extract such data within seconds so that you neither have to download financial information from each and every individual system nor have to spend time and money on entering the data to design complete financial record and statements. Accounting software will enable you to design a professional-looking financial statement. Accounting software provides standardized financial statements that are ready to download and that can be shared as per the requirement.
Read More: Accounting Software for SMEs in UAE
Here are some tips for developing and improving the accounting system in a new business.
- Build in a basic accounting system – At the initial stage of your business, you need a simple, low-cost accounting system. There are high-end options as well as lightweight options which are not "true accounting systems" but are great for tracking expenses such as Mint or InDinero.
- Be timely with reconciliation – Reconciling your accounts payable and accounts receivables to your statements of financial position and Balance sheet at the end of a fiscal year seems dreadful. It will be easier to do regularly to avoid burden in the end.
- Exploration can always come in handy - It seems quite difficult to sit down and read on the job. But reading and exploring are essential in accounting as laws and tax forms change. So always bring all the efforts together to increase your knowledge regarding the laws of the land and tax provisions etc. which affect the accounting systems.
- Open a bank account solely for business - A business bank account with online transactions will help you avoid needless manual processes and better manage your cash flow. Your bank account should automatically forward invoices to your customers and also help you eliminate cash leaks by collecting receivables and paying out expenses.
- Grab opportunity - The major mistake of an accounting department in a business organization is that they don't seize opportunities. The majority of the accounting department's work is predictable and it works on an existing path without ever challenging.
- Align reporting within the accounting - If you happen to be a part of an accounting department in any business organization, chances are that you need to produce reports for not only your department but also other individual departments and for using them for filing and tax preparation. So ensure that you accounting systems provide accurate report based on the accounting outcomes.
- Create your Chart of Accounts - Chart Of Accounts (COA) is essentially an accounting system, designed exclusively for your organization that keeps up with your financial structure and helps you to trace your income and expenses.
- Set apart personal and business expenses - Always make sure to keep your business expenses distinct from your personal ones, which may otherwise lead to confusion. If not kept distinct the company could end up paying additional taxes.
- Foresee expenses - You should record all of your expected expenses, to help you manage your cash burn. You need to move on to the next level of financial management and planning when you realize that you will run out of cash.
- Don't let clients get away with not paying their balances - A high number in the receivable's column is nice, but you can't invest in technologies with a promise. Stand firm and refuse future orders before clearing prior orders.
What can CDA do?
CDA provides you with the best accounting and auditing services in Dubai with its professionalized team of experts. You can outsource your accounting services to CDA for having a smooth and error-free accounting system in your firm. CDA provides its clients with several services under one roof in the most cost-efficient manner which reduces the client's burden to manage every aspect of the business such as accounting, filing of tax returns on time, payroll formation, etc. To know more about the services provided by CDA contact us soon.