Top Best Accounting Firms in Dubai, Abu Dhabi, Sharjah, UAE
Every business needs a proper record of the transactions to get a clear picture of its operations and make correct decisions. As per the classical definition, accounting refers to recording, organizing, analyzing, and interpreting a company’s financial transactions. But, it is a very narrow definition.
With new research and advancement in business processes, accounting has been introduced to all types of operations. This blog explains all types of accounting, their importance, and how hiring expert accounting service consultants in the UAE can help your business grow.
Types of Accounting & Their Uses
The accounting that most people understand is financial accounting. It involves the preparation of quarterly and annual financial statements of a company by following International Accounting Standards. Popularly, financial accounting helps businesses to prepare reports like Balance Sheets, Statements of Profit & Loss, Cash Flow statements, Ratio Analysis, etc.
By studying these statements, a business can understand its fiscal health and performance. As per the law, Public companies must get their interim and annual financial statements audited. These statements and audit reports need to be presented to all the stakeholders. You can easily hire accounting service consultants in Dubai to prepare the financial statements of your business.
While financial accounting helps you prepare the financial statements of the business, these cannot be used to make managerial decisions. For this, the management requires in-depth reports that involve budgets, forecasts, projections, financial analysis tools, etc.
These reports help the management to make strategic and performance-based decisions while managing the risk. Accounting Service Consultants in Abu Dhabi can prepare these statements to aid your business.
A business needs to identify and understand all the cost components. The components can be grouped into variable and fixed costs or direct & indirect costs. Cost Accounting involves using the best cost strategies to manage the profit margins of the business. Some of the most popular cost accounting methods are ABC or Activity Based Costing and self-sufficient Cost Centers.
Cost Accounting helps you to arrive at the cost per unit of production. With this data, the management can try to reduce the per-unit cost and maximize the profits. Accounting Service Consultants in Sharjah are amply experienced to prepare cost accounting records.
Tax Planning is a skillful practice where a business can plan and save its taxes while abiding by all the tax laws of the land. Tax accounting and planning help a business avoid lapses in tax compliance and saves it from penalties. Hiring experienced Accounting Service Consultants in Sharjah can help you claim deductions for all business expenses. As a result, you will be required to pay lower taxes.
Importance of Accounting
Evaluate the Business Performance
Recording business transactions helps a company to prepare financial statements that provide insights into the performance of a business. Reports like the Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, etc. provide a detailed view of the business activity. The management can compare the reports from past performance with the current period and arrive at fruitful strategies to improve future performance.
Make Informed Management Decisions
By hiring the best accounting firms in UAE, the management can be assured of correct data that aid effective decision-making. The key business reports and audit reports prepared by the accounting firm provide insights into past performance on which the management can build a win-win strategy.
Relay Information to the Stakeholders
Accounting forms help companies get true and correct information about their financial situation. It also provides various financial reports that can be used to relay relevant information to the stakeholders and help them make informed decisions.
File Statutory Reports and Returns
Irrespective of the size and nature, every business is required to file tax returns and furnish financial reports from time to time. Doing all this can be complicated and time-consuming. Hiring an accounting service consultant in Sharjah will help you file the statutory reports and returns on time and avoid penalties.
Budget Expenses and Create Accurate Projections
Financial reports are an important pre-requisite for any business while making an important decision. Accounting firms record financial transactions and provide reports like cash flow, profit and loss, and ratio analysis. You can use these reports to identify past trends, make budgets and make accurate predictions for the future.
Basic Principles of Accounting in Dubai, Abu Dhabi, Sharjah, UAE
Companies should follow certain rules and guidelines while recording financial transactions. Accounting principles are a set of rules and regulations issued by the GAAP and IFRS. These principles help present a true and fair view of the financial statements. Listed below are the 6 basic accounting principles.
The accrual concept states that all transactions should be recorded on an accrual basis. In other words, the accounting transactions should be recorded as and when they take place, even if there is no cash flow. For example, if you sell goods on the credit of 60 days, the revenue should be recorded today and not on the date of receiving cash. This helps present the true picture of the financial statements at all times.
The company should choose a method of accounting at the beginning and stick to it until something better is found. Having consistency in the methods of accounting and recording of transactions also helps you evaluate the business growth and improves the quality of financial reporting. It also makes decision-making easier for investors and other stakeholders.
As per the conservatism principle, all the gains should be recorded if their occurrence is certain. But, a loss should be recorded even if there is very less possibility of its occurrence. In other words, any company should always follow a conservative or prudent approach while recording assets and revenues. It helps the company in making necessary provisions while recording estimate-based transactions.
Going Concern Principle
The going concern principle is based on the assumption that the business/company will continue to operate in the future and is stable enough to fulfill its obligations and operate its business. Based on this assumption, the company can defer some of its expenses until future years. Prepaid expenses, depreciation, and other expenses can be deferred. This ensures that the company makes efficient utilization of its resources.
The matching Principle states that if a company records the revenue earned and the assets, it should also record the costs and liabilities associated with it. It is similar to the accrual concept as it also states that all transactions should be recorded within the period of their occurrence. For example, if you record revenue from sales, you should also record the cost of goods sold and other expenses associated with it.
As per the full disclosure principle, the companies are required to fully disclose all the financial information in their financial statements and make sure it is valid. The full disclosure principle helps ensure that the investors have all the necessary information to analyze the company’s financial health and make the correct decisions.
Why Should you Look for Accounting Firms in Dubai, Abu Dhabi, and Sharjah, UAE?
While you can manage your accounts yourself, it can be too complicated and time-consuming. The best way is to hire an accounting service consultant in UAE. Here are the reasons why you should look for accounting firms.
Reduces Your Workload
As your business grows the number of transactions increases and accounting becomes more complex. Managing accounts on your own increases your workload and leaves you no time to focus on business operations and growth. Therefore, you should hire firms that provide accounting services in UAE.
Helps you with taxes
Tax-related matters can be complicated and tiresome for someone who is not well-versed with the laws and provisions. Filing tax returns on your own can also result in errors and legal issues. Hiring an accounting service consultant in Dubai ensures that you never have to deal with any tax difficulties or penalties.
Being the owner of a company, you must already have a lot of things to focus on. Managing accounts on your own can be time-consuming, especially if you are not an expert in it. Outsourcing accounting to the best accounting firms in UAE is a great way to save time and focus more on your core business.
Sometimes, a small mistake can cost you a lot and lead to huge losses. Accounting firms handle multiple clients and hence are aware of the common mistakes that can result in losses. Hiring an accounting service firm in UAE can help you prevent potential losses.
Saves you from legal complications
There are various standards, rules, and regulations that you need to follow while accounting for your business. If you do not have knowledge of all the rules, it can result in penalties and fees. Therefore, hiring an accounting service consultant in Dubai is the best way to avoid legal complications and penalties.
Help with business expansion
Accounting firms help facilitate business expansion by maintaining a record of your financial transactions. This helps you properly analyze your financial situation and make the right investment decisions. You can also make decisions to expand your business based on the financial reports.
Why Aviaan Accounting?
We at Aviaan Accounting are committed to delivering excellence in our services. Customer satisfaction is our primary objective and our highly experienced team is always on its toes to deliver the best quality services. Having a team of financial experts and qualified chartered accountants, we have assisted several organizations in managing their accounting and financial management. Aviaan Accounting is one of the best accounting firms in Dubai, Abu Dhabi, and Sharjah, UAE. If you are struggling with maintaining your accounts and are on the lookout for top accounting service consultants in Dubai, Abu Dhabi, and Sharjah, UAE, you can contact us.
Visit Aviaan Accounting and get your accounting services now!