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Outsourcing Accounting Services In UAE: Top Benefits

Calx Blog Covers
Calx Blog Covers

If you’re running a startup business in the UAE, you need to make sure to manage your finances accurately. This is not only a legal requirement but also ensures success and growth in your business. While many companies handle this situation by enabling in-house accounting, an increasing number of firms are looking for outsourcing accounting services. 

4 Advantages of Outsourcing Accounting Services in UAE

  1. Cost-Efficient

It may not seem like that but outsourcing an accountant can be cost-efficient than that of in-house accounting. This is because when you outsource them you don’t have to invest in the whole process of hiring, training, and retaining them. In fact, you can pay them for the particular task which is often more cost-effective and predictable for your budget. 

2. Giving Time To Core Competencies

You can shift your attention and resources to different aspects of your business by outsourcing accounting services. This will help your brand to expand and allocate more time to developing various marketing strategies. Moreover, you can also work on increasing your customer base, and improving overall operations.

3. Reduce Risk Factors

Financial mistakes can lead you to suffer from paying huge penalties to damage the company’s reputation. Therefore, you can outsource those people to handle accounting matters with better experience to avoid any risk. Furthermore, they are also committed to providing accurate and timely reports. 

4. Compliance with Laws

Establishing and maintaining a business in UAE is not soo easy as it seems. Therefore, to keep your financial records in compliance with tax regulations, outsource accounting professionals. Not only that, make sure that they have a core understanding of the other taxes of the UAE, such as excise, corporate VAT, etc. 

Final Thoughts

Outsourcing accounting services in UAE can provide you with multiple benefits helping your business to excel. From reducing the risk factors by managing your finances accurately to giving time to core competencies, all can done through it. Hence, it’s a strategic move that also lets your business stay in compliance with local regulations. 

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Inventory Accounting Valuation Methods

Inventory Accounting
Inventory Accounting

Inventory accounting is essential for ascertaining the sales of a business. Evaluating the inventory can play a significant role in your business as it maintains the cash flow, maximizes the profit, etc. Moreover, discover the accurate value of inventories with the help of inventories. Note that it also helps your business to reach proper conclusions. 

3 Different Inventory Accounting Valuation Methods

  1. Periodic Inventory Method 

It tracks the items in a business for resale. Rather than determining the value after every sale, it checks the periodic inventory counts after every year, three months, etc. Furthermore, implementing this accounting system is frequently simpler and more economical. Many small businesses which are having few employees can actively use this method of inventory valuation as they have moderate sales volumes. 

2. Cost of Goods Sold (COGS) Inventory Method

The cost of goods sold (COGS) method includes all those direct sales that businesses use in the production process. Remember that it does not include indirect expenses such as sales, marketing, etc. It generally has three components for calculating it which are:

  • Beginning inventory: This is the company’s starting inventory from the prior period. It can be the preceding quarter, month, year, etc.
  • Purchases: It represents the entire cost of all goods and services your business makes during that specific accounting period.
  • Ending Inventory: It indicates the inventory value that was left over at the end of that time period.

3. First In First Out (FIFO) Method

It works on the phenomenon of whichever goods are purchased or produced are sold first. This helps you to get rid of the old inventory by selling it out to the customers before the new stock arrives. Furthermore, it is the most suitable method for e-commerce brands selling time-constraint products. Due to this, you can record the most recent expenses on the balance sheet while deducting the oldest expenses. 

Final Thoughts

Using various inventory accounting methods may seem simpler but without understanding them you cannot excel at it. Whether you’re implementing a periodic, COGS, or FIFO method, select them effectively to plan future decisions. So, make the best of inventory valuation and meet your business growth goals. 

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Importance of Bookkeeping for Freelancers in the UAE

bookkeeping for freelancers in the uae
bookkeeping for freelancers in the uae

If you’re a freelancer working in the UAE, understanding the regulations and importance of bookkeeping is crucial. By creating a financial roadmap and maintaining accurate records, you can achieve your financial goals and ensure smooth operations. Hiring a professional bookkeeping and accounting firm is the best solution to simplify these tasks. They can handle your records, track expenses, invoices, purchases, payroll, and more.

With an accounting professional, you’ll minimize mistakes, track your financial health, and stay compliant with UAE regulations. It’s important to note that freelancers earning over Dh375,000 per year must apply for VAT, while those earning between Dh187,500 and Dh375,000 have the option to register. Freelancers earning less than Dh187,500 cannot register under current laws.

Although VAT registration may seem burdensome, it offers significant advantages. Many UAE businesses prefer to work with VAT-registered freelancers, and some may not collaborate with unregistered ones at all.

To streamline your accounting process, start early and seek advice from a certified bookkeeper. Using online/cloud-based accounting software makes data sharing efficient and secure from anywhere. Schedule regular time to reconcile your books, as falling behind can be challenging to catch up on. If necessary, consider hiring a suitable bookkeeper.

Maintain records of essential aspects of your business, such as hours spent working for each client, business expenses, payments made and received (including bank transfers), and other key elements. Modern accounting software uses this information to generate accurate invoices, income reports, and identify your best and worst clients.

By taking help from a professional and qualified accountant in the UAE, you can avoid common pitfalls and keep your company on track towards profitability and compliance.