A large wave of change is spreading over the accounting sector, as it is in any other small businesses, in response to the challenges given by the post-pandemic environment. Despite the hurdles, accounting companies in Dubai have identified and empowered themselves to assist their customers in achieving their business goals. In 2021, accountants’ roles will have shifted from transactional accountants to holistic counselors, as small firms confront enormous problems that require actionable insights.
Businesses are opting to outsource accounting services in Dubai rather than relying on in-house personnel due to the need for comprehensive counsel. Outsourcing has shown to be the most successful option for dealing with the issues that organizations will encounter in 2021, such as cash flow, digital transformation, tax reforms, and new legislation, among others. If you’re an entrepreneur wanting to grow your firm, keep reading to learn about the top accounting problems for 2021.
1. Monitor Cash Flow for Small Businesses
Cash is always the king in any firm, and there is no better moment to realize this than in the post-pandemic era. In a recent article, we discussed how cash flow issues prompted two well-known corporations to file for bankruptcy in 2020. The story of e-commerce company Sprii and Gulf Greetings is a cautionary tale about credit control and cash flow management. Cash flow risk may be reduced by implementing rigorous payment terms, tighter credit control policies, accurate accounting, and timely invoice issuing, among other things.
2. Embrace Digital Transformation by Thinking Long-Term
Businesses in the UAE were obliged to adopt digital transformation in an ad hoc manner when the Coronavirus hit the world in 2020. While large corporations have been fairly successful in this endeavor, many small businesses continue to struggle. With the rise of Fintech and blockchain, the world of finance, particularly accounting, has seen an extraordinary digital revolution.
Deloitte forecasts that cloud-based Enterprise Resource Planning, automation, and cognitive innovation will gain traction in a recent article. It claims that blockchain will play a crucial role in this transformation. In the future years, keeping up with ever-changing technology will continue to be the most difficult task, which will be reflected in reporting, planning, budgeting, and forecasting, among other things. Businesses must collaborate with the top accounting companies in Dubai rather than a single accounting specialist to overcome digital problems.
3. Put disaster preparedness at the top of your priority list.
The Covid-19 outbreak exposed the flaws in most businesses throughout the world, especially in the United Arab Emirates. Because they were unprepared for such a disaster, many small and major businesses were destroyed by the outbreak. Many firms lacked a disaster management policy, which resulted in significant financial losses.
As new strains of the virus are identified in different regions of the world, business owners and their accountants should take steps to prepare for disasters. Setting up an emergency fund is a good concept that will help the business owners stay afloat in the event of a crisis. We no longer want any firms to be forced into early liquidation as a result of tragedies like a pandemic.
4. The Key to Success for Small Businesses is Efficient Tax Management
One significant benefit for UAE entrepreneurs is that they are exempt from both personal and corporate taxes. Small Businesses must, nevertheless, comply with tax duties such as VAT registration, VAT return filing, and VAT deregistration due to the presence of VAT at 5%. To effectively handle VAT duties for enterprises operating in the UAE, a robust accounting staff is required.
Entrepreneurs in a post-pandemic UAE should be particularly vigilant about maintaining tax compliance since failure to do so might result in substantial fines from the Federal Tax Authority (FTA). They should also be on the lookout for any tax innovations enacted by the government to assure compliance. For example, the government recently proposed changes to the Tax Procedure Law, which is seen to be a substantial revision of the UAE’s tax administrative penalty framework. Accounting services in Dubai can assist small businesses in dealing efficiently with such tax issues.
5. Comply with Regulations & Legal Obligations
The UAE economy has undergone significant regulatory reforms, beginning with VAT in 2018 and continuing with the Anti-Money Laundering and Counter-Terrorism Financing (AML / CFT) law. Economic Substance Regulation (ESR) and Ultimate Beneficial Ownership (UBO) regulations have been followed. To guarantee compliance, all of these requirements require firms to keep correct records and make reports/notifications.
A corporation that closes down must also verify that it complies with certain requirements. For example, a firm in liquidation is required to submit a Real Beneficiary Register (RBR) to the licensing authorities within 30 days after the liquidator’s appointment. In addition, the company’s administrators or liquidators are obligated to keep the registers for at least five years after the date of liquidation. Regulatory developments raise the compliance burden on entrepreneurs, and accountants are needed to help businesses overcome these obstacles.