Realising you are the new kid on the block in the UAE market, bustling with hundreds of thousands of similar big and small businesses, you are determined to prove yourself by running your business mindfully and successfully. And when it comes to running a startup in Dubai, the big enchilada is accounting. Because businesses need to make decisions which are based on truthfully presented financial data by the accountants. It won’t be an exaggeration if we say that accountants play a significant role in the success of any startup not just in the UAE but worldwide.
Significance of Accounting and Bookkeeping for startups
The simplest answer to “Why accounting is important for startups in UAE” lies in the fact that – the survival of any business, regardless of its type, size or location, depends on accurate bookkeeping and accounting. Startups in UAE must build a solid accounting foundation if they want to stay organised, boost efficiency, simplify financing, control expenses and determine possible risks and opportunities for the business. Also, being a startup company in UAE, a country that can’t stand any sort of non-compliance, you might want to steer clear of hefty fines or penalties and keep more records. But this is not it. There are many more reasons why you would want to keep the accounting and bookkeeping of your startup on a pedestal. Here’re the primary ones:
- First and foremost, the right accounting and bookkeeping practices help to ensure that a startup’s financial records are accurate and up to date.
- Accurate financial records are necessary for the startup to make informed business decisions.
- Proper financial records are essential for the startup to comply with legal and regulatory requirements.
- Transparent and simple-to-read financial records play a crucial role in attracting investors and partners, as they show a true picture of the startup’s financial health.
- Exact accounting and bookkeeping practices can also help a startup to manage its cash flow more effectively.
- By regularly tracking and managing its financial transactions, a startup can ensure that it has the resources it needs to meet its financial obligations and achieve its business goals.
Unquestionably accounting and bookkeeping are paramount functions for startups in Dubai. By devoting sufficient time and resources to these activities, startups can ensure that they have the information they need to make informed business decisions, adhere to legal and regulatory requirements, and manage their cash flow effectively.
Role of Accountants in Startup Success
To start a company in Dubai or anywhere else in the world you don’t have to have an accounting or bookkeeping background, but that doesn’t make accounting any less vital to your startup. The pulse of any business, accounting is an umbrella term covering all the financial aspects of the business including cash flow, expenses, income and budgeting that help the management know where they stand financially which is crucial for the success of a startup. It is accountants who help startups analyse their overall business and make better decisions to drive better results. Therefore, a startup company must ensure it has a team of proficient accountants and specific tools to track its financial health. If not for accountants, a startup will not be able to know where it stands or how healthy or unhealthy it is which can lead to failure.
Bookkeeping For Startups
The practice of recording a company’s financial transactions in organized books of accounts on a daily basis is termed bookkeeping. Further, the process of bookkeeping can be done in either of two ways – Single-entry bookkeeping and Double-entry bookkeeping. Click here to know the difference between the two. The specialist who performs this is called a bookkeeper who can be an accountant as well in small companies. The three most common reports bookkeepers generate on a monthly basis:
- Profit & Loss Statements
- Balance Sheet
- Cash Flow Statements
Accountants For Startups
The role of accountants for startups in Dubai is crucial for the success of the company. Here are some of the responsibilities that fall on accountants:
- Maintaining and organising financial records: This concerns keeping track of all financial transactions, including sales, purchases, and expenses.
- Preparation of financial statements: Financial statements such as income statements, balance sheets, and cash flow statements are provided by accountants only to give a snapshot of a startup’s financial health.
- Budgeting and forecasting: Accountants for startups create budget projections and forecast future financial performance to help them plan for the future.
- Tax compliance: Accountants ensure that a business is in compliance with all relevant tax laws and regulations, and they may also be responsible for preparing and filing tax returns.
- Auditing: Accountants may be involved in conducting internal audits to ensure that a company’s financial records are correct and up to the minute.
- Providing financial advice: Accountants may offer financial advice to their clients, helping them to make informed business decisions.
Overall, the role of an accountant is to provide financial information and support to a business, helping it to make informed decisions and achieve its financial goals.
Accounting & Bookkeeping for Startups: DIY or Outsource?
From obtaining and renewing a trade licence to renting a facility and equipping it with everything required to hiring and maintaining employees to conducting marketing and promotional activities, starting a new business in Dubai, whether it’s a small salon, a low-key cafeteria or a big real estate company, and running it efficiently can cost you the earth. It is natural to think of DIYing as many tasks as you can during the early stages of the business. And accounting and bookkeeping can be one of them. Being a small company, you might want to perform most of your accounting and bookkeeping activities by yourself but you can’t deny the fact that at times you stumble upon some crucial accounting functions such as ITR filing that require expert accountants in Dubai. And that’s where either you consider hiring some of the professional accountants for your startup or simply start searching best accountants near me or the best accounting firms in Dubai that can take care of all your accounting, auditing and taxation needs letting you forgo the need of maintaining an in-house finance department.
The Process of Setting Up a Startup’s Bookkeeping & Accounting System
Placing a bookkeeping and accounting system for your startup is an important step in ensuring the financial health of your business. Here are some steps you can take to get your system up and running:
- Choose a bookkeeping method: You can choose between using a manual system or using a computerized system. Manual systems involve keeping physical records, while computerized systems involve using software such as QuickBooks or Xero.
- Set up a chart of accounts: This is a list of all the accounts in your system and their corresponding account numbers. It should include all the different categories of income, expenses, assets, liabilities, and equity.
- Gather all your financial documents: This includes receipts, invoices, bank statements, and any other documents related to your financial transactions.
- Enter your transactions: Start entering your financial transactions into your bookkeeping system. This may involve creating entries for each transaction, such as recording the date, amount, and type of transaction.
- Reconcile your accounts: Make sure the balances in your bookkeeping system match your bank and credit card statements. This process is known as reconciling your accounts.
- Review your financial statements: Your bookkeeping system should generate financial statements such as a profit and loss statement and a balance sheet. Review these statements regularly to get a sense of the financial health of your business.
- Stay fully informed: It’s important to stay on top of your bookkeeping and accounting by consistently entering transactions and reconciling your accounts. This will ensure that your financial records are right and updated.
Functions of Accounting for Startups in Dubai That Can Be Outsourced
From a single basic function such as bookkeeping to the entire department’s complex operations to anything in between, a Dubai-based startup business owner could outsource anything. They can also consider partial outsourcing to get the required support from professional accountants and expand their in-house capabilities. Here is a list of some of the standard finance and accounting tasks that you can outsource to third-party one-stop-shop accounting firms in Dubai, UAE such as Adam Global Auditing & Accounting.
- Accounts receivable/accounts payable management
- Transaction management
- Bookkeeping services
- Drafting financial statements/reports
- Financial reporting
- Controller services
- Financial planning and analysis
- Cost accounting
- Fraud or forensic accounting
- Tax reporting and filing
- Accounting and financial compliance
Need of Accounting Software for Startups
Accounting software have simply put a new spin on the old methods. Having advanced accounting software such as QuickBooks, Zoho Books and Tally ERP 9, can help startup owners process and track their accounts while improving financial performance. The best part is accounting tools can be tasked with multiple duties at a time, unlike humans. What’s more? These software also provide integrations that are exceptionally helpful for payroll services, CRMs, etc. However, if you think that your small business can do without expensive accounting software then we must say nothing could be further from the truth. Whether you choose to hire accountants for startup to deal with the accounting processes or carry them out under your own steam, accounting software is essential as it not only saves you valuable resources by helping you manage multiple projects effortlessly and efficiently but also keeps you on the ball with readily available information as and when you need it. You should consider implementing one that squarely fits your business needs or simply work with a third-party accountant for startup business. Top accounting & auditing firms in Dubai like Adam Global ensure that they have all the latest accounting software no matter how pricey it is as their priority is client satisfaction in the competitive era.
Outsourced Accountants for Startup Businesses in Dubai, UAE
Accountants are important for startups in Dubai for a number of reasons. First and foremost, an accountant can help a startup to properly manage its financial resources. This includes creating a budget, tracking expenses, and forecasting future financial needs. In addition, an accountant can help a startup to create and maintain financial records, which are necessary for tax purposes and for obtaining financing. An accountant can also provide advice on financial matters, such as how to invest surplus funds or how to structure the startup’s finances to minimize tax liability. Finally, an accountant can help a startup to comply with financial regulations and laws, which is particularly important in Dubai given the city’s status as a major financial hub.
Benefits of Outsourcing Accounting & Bookkeeping Services in Dubai, UAE
Financially tight, most startups in Dubai usually consider outsourcing as an unnecessary cost to their small business. However, it is not the right perception. In fact, it is the opposite. For instance, Startup owners can enjoy the myriad perks of outsourcing their accounting tasks to expert accountants for startups. For instance,
Cost-Saving Accounting & Bookkeeping Services in Dubai: By outsourcing your startup accounting & bookkeeping functions to external accountants or specialised firms, you don’t have to hire and maintain an internal department of accounting specialists which simply means you can save a fortune as you don’t have to splurge towards your full-time or part-time employees’ visa sponsorship, salaries, taxes, accounting software, office supplies, benefits, etc. With their tailor-made service packages, you only pay for the services you need on an ad hoc basis. There is no loss in productivity costs that come along with hiring full-time accountants for startups in Dubai.
Elimination of Time, Costs & Hassles of Hiring Processes: In general, new companies don’t pay heed to the time and costs involved in the process of hiring Accountants for startups in the UAE. The recruitment process is time-consuming and eats up your important business time which is equally correlated with money. The process also incurs costs that can simply be avoided by outsourcing the accounting tasks to external accountants for startup businesses.
Time saving: As your startup grows, you will find yourself spending more time managing your money and less time scaling the business. Therefore, outsourcing administrative tasks like bookkeeping and accounting help you to divert your time, energy and resources on making business strategies. It will be bringing more revenue, as well as networking and building relationships with your customers.
Access to Expert Accountants & Bookkeepers: Outsourcing can connect you with a professional with a higher level of expertise at an affordable price. Outsourced bookkeeping and accounting service firms continuously have to improve their skills and qualifications to stay competitive in the market. Imagine, 50 people working in the same office. They can easily share new accounting trends, solutions and tools. To add more, great accounting companies have more extensive access to training, and courses, and they are participating continually. What’s more, outsourcing to an accounting firm is giving you access to the team of Accountants. By choosing the outsourcing company wisely, you can be sure that your accounting is in the reliable and knowledgeable company’s hands.
Scaling of Accounting Effortlessly: The accounting service providers have the amount of availability to scale your services significantly without any lag. For example, if your bookkeeping and accounting tasks exceed the number of functions for 1 employee, you can easily be enforced with the extra workforce. Without the need to go through a rigorous recruitment process. Not just that, accounting and bookkeeping service providers charge their fees on an hourly basis. It means you can scale up or scale down the hours without any interruption.
Automation technologies: Most businesses use accounting automation software to save time. It will save time, but importantly, it reduces risks. Automating accounting minimises human errors. Secondly, in automation software, accountants get real-time reports. They assist in catching potential problems and resolving them at an early stage. Thirdly, it will reduce the probability of internal fraud. Most of the accounting service providers are highly qualified in the automation tools such as Quickbooks, Sage, Visma, Xero, Microsoft Dynamics, SAP and more. If your accountants are still using only Excel sheets – you are wasting your time and money.
An accountant is your advisor: A good accountant will always provide advice on how to make accounting more efficient. Sometimes he might work with a couple of companies and propose an excellent experience from another client. Whether it is about taxation, accounting software or even providing financial advice.
Tips to Find the Right Accountants For Startup Businesses in UAE
Dubai brims with tons of finance experts including accountants for startups. Given that, finding the right accountants for startups can be tricky. Here are some tips that might help.
Determine your needs: Consider what accounting services you require, such as bookkeeping, tax preparation, and financial planning. This will help you find an accountant who specializes in the areas you need.
Research potential candidates: Look for accountants who have experience working with startups and are familiar with the unique financial challenges that startups face. You can ask for recommendations from other entrepreneurs or search online directories of accounting professionals.
Consider the accountant’s fees: Startups often have limited budgets, so it’s important to find an accountant who is cost-effective. Be sure to ask about hourly rates and any additional fees for specific services.
Check the accountant’s credentials: Make sure the accountant you are considering is licensed and has the necessary education and experience to provide the services you need.
Schedule a consultation: Before making a final decision, schedule a consultation with the accountant to discuss your needs and see if they are a good fit for your startup.
Shop around a little: It’s important to find an accountant who you can trust and work well with, so don’t be afraid to meet with multiple candidates before making a final decision.
No matter how small your business is, you have to wear multiple hats with so tons of tasks to do from client servicing to talent management. Being a startup owner you will always have something extra on your platter and you will end up doing just the chores. Conspicuously, this can put you into a condition of survival that limits your time to developing a consistent approach to accounting and gauging the startup’s financial performance. That’s where outsourcing comes in and makes the life of small or new businesses a lot easier and more efficient by significantly enhancing financial planning and keeping the finances of the business in fine fettle. To have accurate and detailed books, startup owners need to have that extensive experience and adequate time to maintain their financial records. Working with a team of professional accountants for startup businesses in the UAE can put your entrepreneurial journey on autopilot mode so you can focus on core functions with peace of mind that every breadth of your company’s financial requirements is expert hands from budgeting to tracking expenses, paying suppliers, managing inventories and categorising transactions.
Who we are and how we can help
As their small business grows, startup owners start seeking trained professionals, such as an entrepreneur accountant or an accounting firm, who can guide the company on a path toward financial success. We are the latter, your all-in-one finance solution with:
- Expert bookkeepers for startups, SMEs and large corporates
- Experienced accountants for startups, SMEs and large corporates
- Proficient auditors for startups, SMEs and large corporates
- Startup tax accountants in Dubai, UAE
- Seasoned tax advisors for startups, SMEs and large corporates
- CFOs for startups, SMEs and large corporates
We assist businesses of all types and sizes in getting their accounts as right as rain. Catering to all the corporate needs of every entity from startups to small & medium-sized enterprises to big companies all across the UAE for the last two decades, we can be your trusted partner whether you need bookkeepers/accountants for startups or corporate secretaries or tax advisors. In addition to accounting and bookkeeping services, you may also rely on our accountants for startups, CPAs, startup tax accountants and finance professionals with expertise in audit & assurance, payroll services, taxation assistance including VAT and corporate tax, corporate secretarial services and compliance services related to ESR, AML, liquidation and corporate restructuring for your small business in the UAE. Click here for a free consultation with our startup accounting experts in Dubai.