A company operating in the UAE needs to focus on financial and accounting records to avoid future uncertainties. This is the key to a successful company to always keep up to date and comply with changing regulations. Every company must update its accounts for past-due periods as required.
Bestax Chartered Accountants offers professional accounting services in Dubai, Sharjah, Abu Dhabi, Ajman, and the other UAE Emirates. We provide superior quality services with 100% guaranteed results to all our local and international clients. Understand the importance and what we offer in terms of backlog updating.
Backlog accounting is the practice of recording all transactions from the first day of a company’s incorporation. Financial and accounting records must be kept and updated at the initial stages in accordance with regulatory guidance. The opening balance records show exactly where the company stands. In many cases, companies were not competent at the time of incorporation to continue to meet the backlog. Therefore, you should prepare in advance in case a stakeholder, business partner, or federal authorities ask you about your accounting history.
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According to the UAE Companies Law, a registered entity must maintain and update all books and accounts since the company’s incorporation. Companies are required to keep records from the date of incorporation up to the current date. Compliance with the terms and conditions of the FTA is also essential to avoid penalties. Updating accounting records is a complex process that requires accounting expertise. Companies should look for a reputable accounting firm in the UAE to prepare their accounts.
The preparation of accounts receivable is very important for start-ups as well as SMEs in the UAE. It is more difficult for start-ups to comply with the requirements regarding backlog accounting, which may result in fines and penalties imposed by the authorities. The history of records helps management and strategists in making calculative decisions. It increases a company’s profit by calculating costs and reducing overheads. A company can remain competitive by updating non-performance records to avoid problems and sanctions from the authorities. Accountants should implement accounting software to update the accounts in the best way. Therefore, technological advancement helps business owners to analyze data as well as keep pace with the industrial revolution.
There are several reasons why organizations fail to maintain backlog reports in line with regulatory guidelines.
When preparing accounting records, outsourced accountants are required to produce reports to provide insight into business performance. These statements are mandatory for every company operating in the UAE in order to forecast its future financial position. The key statements that need to be updated after the cumulative underperformance accounts are listed below:
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Outsourced bookkeeping services in the UAE benefit many small and medium-sized businesses by allowing them to settle their accounts. Some of these are described below:
Firstly, accounting information helps the business owner to keep track of the financial situation. Once chartered accountants maintain a history of the backlog of transactions, they can assess the contribution of each department to profit generation. The department with the lowest productivity is reported and attention is turned to the next department. This helps the management team to identify market trends and investment opportunities for the coming years. This calculated information benefits the organization as a whole.
Backlog accounting saves the operator a lot of time and money. Proper bookkeeping helps a lot when an accountant wants to access an old file. The documents and information recorded in the accounting software are available at any time and are easy to retrieve. These old accounting documents are important for future development plans and growth opportunities. Updated accounting records also protect businesses from penalties during FTA inspections and secure your revenue.
A clear picture of a company’s cash flow management is provided by the records of outstanding transactions. A thorough review of incoming and outgoing cash helps to forecast the financial position of the company. If the accounting records are properly updated, this will allow management to make better use of resources than in the past. Our accountants understand the importance of managing funds and other financial transactions.
The accounts that are prepared after the accounts have been finalized support the management team in decision-making in particular. Information on previous deadlines helps senior management to decide whether it is profitable to work on a new project or not. They can make strategic decisions and action plans to improve the performance of each division or unit.
Maintaining and updating the backlog is most useful during FTA tax audits. The authorities check your financial records only 5 days in advance, so it is impossible to have the annual information ready in just a few days. Proper maintenance of backlog records is essential during an audit to avoid penalties and fines for non-compliance.
Contact our chartered accountants to update your backlog accounts in the best possible way