How to Maintain Business Books (Accounting Records)?
29

Jul 2020

The business records are a vital element that plays a significant role in leveraging the growth opportunities for an entity. Proper tracking of business growth and to understand the profits and losses that occurred during a specific period of the business is the main goal behind maintaining business books. It is important to note that merely a recording of the business transactions won’t make sense until and unless it speaks a detailed version of the business proceedings.

The United Arab Emirates has been one of the prominent business investment ground that allows a wide range of business opportunities to the budding entrepreneurs and experienced business professionals. However, the field also mandates the business owners to maintain proper records of their business. This guide will help you to get clarity to keep your business records in the correct format. Before proceeding ahead towards the proceedings, let’s understand how business books help a business entity.

Why is Commercial Books Important for a Business?

The business entities need to record the business transactions from the first day of incorporation. There are several expenses that get occurred before the company setup process. Each of the expense needs to be recorded to identify the overall costs involved. Additionally, commercial books help a business entity in the following ways:

  • Keeps track of complete payments made and income gained
  • Helps to analyze and minimize the unwanted expenses
  • Turns out to be beneficial for budget planning
  • Helps to foresee the company’s future and understand the growth projections
  • Regular tracking helps to achieve the breakeven point

We can say that keeping track of the business transactions will help you to maintain a balance between the expenses occurred and income earned.

How to Maintain Business Books?

According to the stated proceedings, the accounting records and commercial books should include information regarding the following:

  • Records of payments and receipts
  • Purchases and Sales
  • Revenues and Expenditures
  • Balance Sheet and Profit and Loss Account
  • Records of Wages and Salaries
  • Records of Fixed Assets
  • Inventory Records and Statements

Rules to be Followed While Maintaining Business Books

Some of the rules that are to be strictly followed while maintaining business books are stated below:

  • Every person holding and maintaining any of the records shall keep the files in a manner that enables the Authority, or an officer authorized by the Authority to ascertain that person’s tax obligations, as follows:
    • For five (5) years after the end of the Tax Period, which they relate in the case of a Taxable Person.
    • For five (5) years from the end of the calendar year, in which the concerned document was created in the case of non-Taxable Persons.
    • For a period specified in the Tax Law for real estate records.
  • The Authority may, before the expiry of the period inform the Person to retain the records for a further period not exceeding (4) years, in cases where he is required to do so including the following:
    • If the taxable person’s tax obligations are subject to a dispute between him and the Authority.
    • If the person is subject to a Tax Audit and that Tax Audit has not yet been completed.
    • If the Authority has given notice to the person that it intends to conduct a Tax Audit before the expiry of the period.
  • If a person is no longer a Taxable Person, he shall be required to comply with the provisions necessary
  • Where a Person enters into bankruptcy proceedings, his Legal Representative is necessary to keep the records of that Person for 12 months from the date on which those proceedings have come to an end.

Apart from the points mentioned above, additional records might be required in the Tax Law and its Executive Regulation. The Authority might also serve as the business entity to submit relevant audit trails, liability to register, etc.

  • Tax Return, data, information, records, and other documents related to any Tax shall be submitted to the Authority in Arabic, as per the rule in the Tax Law.
  • As an exemption, the Authority might accept data, information, records, and other documents in English.
  • Whenever the data, information, records, and other documents related to Tax are issued in any foreign language other than English, a copy of the materials in Arabic needs to be submitted.
  • The person submitting any translation of information or data related to Tax to the Authority shall be liable for the accuracy and correctness of the translation and shall bear all associated costs.

With this, we can see that the business books help a business entity to eliminate unwanted expenses and make the best utilization of the revenue generated. At the same time, the books are organized that will help the user to understand the business scenario just by having a look at the numbers. Most of the business investors prefer to proceed ahead with the help of professional experts as that turns out to be more profitable. Wondering how? Here’s your answer.

How Can Professional Experts Help in Maintaining Business Books?

A professional accounting and bookkeeping expert can help you in the following areas:

  • Maintain error-free records
  • Specific deadline gets assigned with each task
  • Tasks are carried out in a professional manner
  • Figure out the existing errors
  • Provides relevant solutions to the errors

JAXA Chartered Accountants has been one of the top accounting consultants in UAE, who has been providing auditing  and accounting services to numerous clients across the UAE. Our business experts are well-versed with the accounting, audit, and taxation rules and can guide you at every step. Being industry experts, our advisors can help you to provide tailored solutions to suit your business needs. In case you hold any query, do contact us-we’d be glad to assist.