Common Bookkeeping Errors In The UAE And How To Avoid Them

Delivering an accurate financial picture of a company is a big deal. Accountants get it done by carrying out tasks including collecting, recording, evaluating, and presenting the financial operations of the organization. This includes keeping track of information about purchases, sales, and all relevant receipts and supporting paperwork. Regardless of the type of business or the scale, this is a crucial practice that all businesses should follow. Although technology has advanced, bookkeeping errors can still occur and the company can incur losses. In this blog, we will be discussing the common bookkeeping errors in the UAE and how to avoid them.

Fail To Track Your Financial Statement

Sometimes, small entrepreneurs pay for business expenses out of their personal funds. A situation like this develops when these reimbursable expenses are not accounted for, and it leads to financial loss as well as lost tax deductions. It is advised to establish a procedure to track reimbursable expenses and keep the business continuously on track.

Using Improper Accounting Software

It doesn't matter how skilled an accountant you have if the business chooses to invest in software that doesn't meet its needs. Several software applications are available on the market, particularly cloud-based ones. There would be many benefits to businesses from spending some time researching and purchasing the right accounting software that would help them avoid issues of productivity and money loss in the future.

Poor Record Keeping

Often, the expenses that seem insignificant and that are not always included in the bookkeeping process go unnoticed, so it is easy to lose receipts or forget about these expenses altogether. Moreover, it can create legal problems for you, especially if your tax returns are unpaid or have not been filed on time and if the deductions you claimed are incorrect.

Error Of Omission

There are often transactions that have a non-cash effect that accountants do not record in small businesses. However, such a transaction could distort the profit figures.

Not Reconciling The Bank Account

Business owners will have a hard time as the end of the financial year approaches if personal and company transactions are not separated. Reconciliation is the process of verifying that the two records are in agreement. Reconciliation is required when the bank balance and the cash balance are out of balance.

Inefficient Backing Up Of Data

At every stage of bookkeeping in Dubai, it is important to back up data. This practice helps to obtain old data regarding purchases, sales, or any other relevant transactions made for the welfare of the organizations. In order to retrieve data as and when needed, it must be stored and backed up effectively and properly.

Fail To Hire A Professional Bookkeeper

It is important to hire a bookkeeper early so you can see where your money is going and what you can do to maximize your profits moving forward. Through a professional bookkeeper, companies can track expenses, regularly pay their vendors, balance their bank accounts, and keep track of their payroll.

It is important to note that bookkeeping mistakes will hamper business prospects and may even adversely affect a company's relationship with vendors and clients. Since businesses have a lot of functions to perform, it is advisable to outsource these services to the leading accounting and bookkeeping firms in the UAE, like Reyson Badger. The highly skilled professionals at Reyson Badger can provide you with high-quality bookkeeping services for your business.