The margin of error for a well-established company in the UAE might be far off. But then the risk of being profitable or suffer a loss of such companies are close. Hence, there are accounting and bookkeeping requirements that are to be undertaken by every company. Even startups as well, because they are continually going through losses and profitability, and all this needs to be tabulated.
The startup's industry in the UAE is harsh, as several well-established companies in the region make it impossible for them to survive. Taking the help of VAT accounting UAE can be of some help if the startup companies are trying to have an actual income and expenditure profile. But understanding the basics of bookkeeping for these startup companies is necessary.
- Basics of bookkeeping.
- Debt to be paid record.
- Journal entry.
- Management of payroll.
- Up to date record of all the entries of accounts that are payable and receivable.
- Inventory country.
- Purchase orders and sales entries.
Especially if you are a new company that has just begun operations, then you could take VAT accounting services to keep a detailed track of bookkeeping. But why do that when the necessary aspects of bookkeeping are as follows:
- Gross margin calculation.
- Accounting software.
- Expense tracking.
- Tax obligations and receiving payment determination.
- Opening of business account.
- Payroll system, and much more.
The necessary financial records that a startup company has to maintain are as follows:
- Sales and invoice reports, along with payroll.
- Cash receipt book.
- Credit and debit record.
- Purchase and sales records.
Hence, for all the checklists that one might have to follow, which even VAT accounting UAE companies follow are:
- VAT/TAX returns.
- Financial report analysis.
- Maintaining invoice.
- Record of customer payment and billing information.
- Payroll updating.
- Vendor bills and payment.
- Inventory analysis.
Thus, now that we have covered all the aspects of bookkeeping, not let’s move ahead with accounting requirements that a startup in UAE must follow.
- The balance sheet of the current financial scenario of the company.
- Net profit margin.
- Cash flow is negative or positive.
- Profit or loss statement of the company.
VAT consultancy services often provide different accounting services. Each of them can be availed base don your preference. All of which are given below:
- Accrual method
The method follows a pattern where income and expense are recorded at the time of transaction.
- Hybrid method
It is the method that follows bother accrual and cash-based methods in accounting.
- Cash basis method
The method follows a pattern where income is recorded where this is income and expenses are recorded when they are paid.
Thus, every startup in the UAE must have accounting and bookkeeping services as they are essential in knowing the growth of the company and also ensuring that they aren’t undergoing losses. In this manner, startups can determine whether they are cash flow positive or negative. Many times, startups avoid keeping any accounts to reduce cost, but having accounting services does help by manifolds in determining the company’s profit margin and other financial factors.