Bookkeeping is a platform to keep accounting of finances and is an integral element in the process of accounting. The accounting process involves receipts, sales, purchases and the payment of either an individual or an organization. In the current era of business disruption, it is crucial to have a systematic system for bookkeeping. Beginning with recording and then analysis it is a method to benefit managers anticipate the business’s performance.
Without bookkeepers, businesses wouldn’t be informed of their current financial situation as well as the transactions happening within the company, and the liquidity of the business. For any business, one of the most important aspects to consider when starting and expanding a business is accounting and bookkeeping. Bookkeeping provides the results of the financials for your business as well as future to make it easier to understand. The bookkeeping process begins from the first day of the month until the day that ends the month and continues each month. The cycle lasts for 12 months, until the close of the financial year.
The bookkeeping helps the business owner make informed, smart business decisions. It is an ongoing procedure that is essential to be completed to reduce time and headaches that come with it. While conducting bookkeeping, there is an increased chance of errors. Sometimes, these errors can be avoided, but sometimes they are not. When a mistake is spotted it is rectified.
The bookkeeping services in Dubai are known to be the best services enabling the success of businesses. This blog will focus on accounting and bookkeeping services Dubai, and what are the major mistakes which can disrupt this process.
Bookkeeping services includes:
- Services for receivables.
- Cash transaction services for small amounts.
- Bank account reconciliation.
- Invoicing Processing Services.
- Assets / equipment ledger maintenance.
- Services for accounts payable.
- Manual Journal Entry Services.
- VAT returns.
- Inventory Management
- General ledger maintenance.
Common bookkeeping mistakes that could occur are as follows:
- You are not categorizing your expenses correctly: Incorrect categorizing of expenses can mean that mixing personal and business expenses. It’s more than just tax-time. Billing personal expenses into an account for business or in reverse could lead to inaccurate beliefs regarding the financial health of your company. An accurate monitoring of expenses and income in the correct categories guarantees an accurate measurement of profit.
- Not reconciling your bank account: In the absence of separate bank accounts to handle business and personal transactions can lead to a problem. It is the method that ensures both sets of records coincide with one another. Reconciliation is required only when the balance of cash and the bank balance do not agree.
- You aren’t tracking your financial statements: Small-scale business owners pay for the costs out of personal money. The reason for this is because of the inability to track these reimbursable expenses. This outcome in the loss of funds and tax deductions. Implementing a system to keep the organization always on the right track and record reimbursements can help.
- Bookkeepers who are not experienced: A bookkeeper who is hired early will provide you with a clear idea of the direction your money is heading as well as how you could tie unfinished business and increase earnings soon. Small businesses often search for bookkeepers while they are at the height of their need. A bookkeeper could benefit from managing the flow and outflow of money. If a company is unable to hire the right person, it can adversely impact the expansion of the business. If you keep all your information properly organized and documented your bookkeeper will prevent you from having to endure the stress of a CRA investigation, help you avoid penalties or deductions, and benefit you conserve your time.
- The absence of petty cash transactions and credit transactions: Petty cash is a tiny amount of money that is utilized to cover everyday expenses. Most transactions involving petty cash are done for the least expensive items. Inadvertently recording them in the general ledger could result in accounting errors in the future.
- Incorrect assignment of expenditures to the balance ledgers in the balance sheet: Sometimes, a misallocated allocation could cause huge problems, even throwing off the financials that are generated. It is difficult to gauge efficiency and to pay taxes if there are improper classes. It is imperative to keep track of every transaction in the business, even the smallest ones. Keep small expenditures in the appropriate accounts and save receipts to be used in the future.
How can ebs Chartered Accountants help?
ebs Chartered Accountants are one of the top firms providing Dubai accounting services and bookkeeping services. We are in partnership with many businesses in Dubai. We are known for our timely delivery of work with transparency. We will help you with your financial assistance with professionalism. Our experts are always being trained and are up-to-updated with the latest trends; this assures that your bookkeeping is done seamlessly. We recommend our services as per your personal needs. Book us today and let us handle your financial needs.
FAQs
What is one of the most common bookkeeping mistakes that business owners make?
While most expense categories are standard and straightforward, the mistake many business owners make when doing their own bookkeeping is creating duplicate categories or failing to enter expenses into the appropriate category.
What is the hardest part of bookkeeping?
They might be responsible for accounts payable and receivable, payroll processing, bank reconciliations, and generating financial reports all on top of handling client inquiries and staying updated on regulations. Time management becomes a critical skill.
Is bookkeeping a hard skill?
All bookkeepers must have certain hard and soft skills to succeed in their jobs. For example, they need to have a strong understanding of numbers and math, but they also must be good problem-solvers with strong ethics to ensure the company doesn’t run afoul of regulations.