After spending a lot of time on acquiring the various licenses and going through various hoops, you have finally set up a business in the United Arab Emirates. But do not take a sigh of relief just yet. You have only completed the first step, and now you have to run a company, and it is not easy. You constantly need to understand your business number and how they can help in making your business profitable.
The first and the most basic function that you can implement is to initiate bookkeeping and accounting in the business. These functions may be very mundane and repetitive, but these provide the basic data that help us understand our business’s progress. The importance of these functions can be understood by the fact that they are called the lifeblood of a business or the language of a business.
Importance of Accounting and Bookkeeping
Accounting and Bookkeeping services are required by every company, no matter the size or nature of the business organisation. There are many ways by which Accounting and Bookkeeping can help your business. Some of them are mentioned below:
1.Provide Raw Transactional Data and Analyse this Data
Bookkeeping is the function in which all the transactions are recorded. These transactions are then summarised, analysed, and then reported in a manner which can be understood by all and this data tells the complete history and the present of the company. A skilled analyst may also find certain aspects of the future of the business.
Both Bookkeeping and Accounting combine to provide a lot of data of the business, which can be then analysed to form strategies for the future and increase the business’s profitability.
- Helps in Preparing other important Documents and Filing taxes
The data acquired by Bookkeeping and Accounting Services helps in the preparation of various important financial documents of the business, namely:
- Journal Entry
- Profit and Loss Account (also known as the Income statement)
- Balance Sheet
The above-mentioned documents are further used in the preparation of other related documents or filing for Value Added Tax and other Tax-related documents.
- Keeps the track of all the Activities being performed
Bookkeeping and Accounting help keep track of all the business activities and also helps in avoiding any illegal or unethical practices. An accountant can study the numbers which are generated and find out where the illegal activity is being done. It is then reported to the management which takes the appropriate action.
- Understand the Future Trends in the field
One more benefit of acquiring so much data is that the future of the company, as well as the industry, can be estimated and accordingly the management can take steps and devise strategies which will ensure the growth of the business.
Understanding the future of the business will also help the management to make decisions regarding the expansion of the current business.
- Can help in Cost Cutting
The data, when analysed will tell the management of the resources are over utilized and which part of the business, is wasting the resources. Similarly, it also helps to understand which part of the business requires more attention to the management and which part of the business is already working at maximum capacity.
- Bookkeeping and Accounting have become Mandatory.
Seeing the importance of Bookkeeping and Accounting, the government of many jurisdictions have made it a requirement to implement both Bookkeeping and Accounting when they are conducting business. This step makes the work of the businesses, as well as the government easy as all the reports which are to be presented, are already prepared.
It is because of these benefits the Bookkeeping and Accounting services have become an indispensable part of the business. As the data from Bookkeeping and Accounting are further used to make audit report, it is suggested that you should take the assistance of a professional. If you are wondering which reputed Approved Auditor should you contact, then we have a suggestion.
JAXA Chartered Accountants comprise experts who first understand the business’s situation and accordingly provide a tailored solution to the management. With an experience of 13+ years in the field of Accounting and Bookkeeping, you can be assured that the solutions provided by JAXA will increase the profitability of your company. For more details on the services provided, Contact Us. We will be glad to assist you.