Accounting Technologies

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Accountants need to stay up to date with technological advances in order to respond to market conditions and their clients’ needs. Technological innovations have led the way, establishing how accounting is done nowadays. Digital resources and online tools help improve productivity and organization.

Now, we can find advanced technology to help streamline accounting processes and management of books of accounts.

How does technology impact accounting?

The biggest impact IT has made on accounting is enabling companies to develop and use computerized systems to track and record financial transactions. This system allows companies to create individual reports quickly and easily, enabling management to make decisions faster, using up-to-date information.

There are many applications of modern technology in accounting. Out of the many available options, in this blog we summarize the five types of accounting technologies that are currently transforming the accounting industry:

  1. Artificial Intelligence & Robotics

    In simple terms, Artificial intelligence (AI) is the ability of a computer or a robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence and discernment.

  2. Cloud Computing

    Cloud computing accounting software is accounting software that is hosted on remote servers. It provides accounting capabilities to businesses in a fashion similar to the SaaS (Software as a Service) business model. Data is sent into “the cloud“, where it is processed and returned to the user.

    A Simple Advantage
    This opens up a new way for accountants to work with their clients. Using cloud accounting, there is more time to engage with the client and focus on business strategy instead of getting burdened with detailed processes.

    Difference between Traditional Accounting and Cloud Computing?
    Traditional Accounting Software comes with initial infrastructure costs as well as maintenance costs of on-site software and hardware.

    Cloud computing, on the other hand, provides a software function without large upfront costs or licensing fees.

  3. Innovations in Tax Software

    An innovation is defined as the process of translating an idea or invention into a good or service that creates value or for which customers will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need.

    Tax preparation software is an online, automated system for preparing individual and business income taxes. It’s used by both tax preparation businesses, like CPA’s(Certified Public Accountant), and individual taxpayers who prefer to do their own returns. It eliminates the need for the taxpayer to complete his or her return using actual forms.

    The tax software of today has helped improve accuracy while reducing margins of error – something businesses want to embrace in order to avoid tax penalties and prevent issues with stakeholders. Better tax software also helps streamline audits by making them more efficient and effective.

  4. Mobile Accounting

    Mobile accounting is the ability to access and process accounting information, which could be data, applications, etc. over devices that are not restricted by physical locations.

    Mobile accounting could mean different things to different people and businesses, so the first step in a successful rollout is defining what it means to you and your company. For example, consider who the users will be and what they will be using it for. Think about the different functions you’d want your mobile accounting and financial solution to cover.”

  5. Social Media

    Social media has become an essential tool for firms wanting to engage with current and potential clients while expanding their brand reach. Social media is a tool that will continue to evolve and provide accountants with a valuable sales and marketing platform that can instantly connect firms to current and future clients.

    Most accounting firms understand the importance of implementing traditional marketing into their overall business development plans, but many firms may not realize the power of integrating social media marketing into their long-term marketing strategies.

    Social media should be a part of a firm’s overall business development strategy, and if done consistently, will help amplify the effectiveness of all other marketing and business development efforts.

DMCC Launches Employee Protection Scheme

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Dubai Multi Commodities Centre (DMCC), in collaboration with Dubai Insurance Company (DIC) have launched a new “Employee Protection Insurance (EPI) Programme” to provide more comprehensive benefits for all DMCC and member company employees. The said programme will offer increased protection for DMCC employees in the event their employers default on salaries, gratuity or repatriation cost.

Effective 19th May, 2020, Employee Insurance Scheme (EPI) programme will replace the bank guarantee requirements for every DMCC member’s employees during the submission of visa and permanent identity card related service request, with a certificate of insurance to be issued upon completion of the application.

To avail this benefit, as per DMCC notes:

  • All visa-related service requests saved as ‘Draft’ on the Member Portal will be cancelled on 19th May, 2020, therefore you will need to initiate a fresh service request
  • All visa-related service requests in progress on the Member Portal will go through the existing Bank Guarantee process
  • DMCC encourages you to renew your due employee visas to avail the benefits below:
    • The AED 3,000 bank guarantee will be refunded upon the renewal service request being approved and closed
    • The EPI for renewed employees will cover the following in case their employer defaults:
      • Unpaid salaries
      • Unpaid air ticket allowance
      • End of service payments.

Dubai South Announces Economic Stimulus Package

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To lighten the effects of the current situation in the United Arab Emirates (UAE) and the world due to the coronavirus, Dubai South Free Zone announced several economic stimulus incentives. The stimulus package is a part of the UAE Leadership’s vision to stimulate the economy and support different sectors of the business society so that Dubai will remain a sought-after business destination.

Dubai South joined other free zones and government departments in coming out with measures that will help individuals and companies during this challenging time and beyond. The stimulus package includes:

  • Flexible payment plans with easy instalment schemes
  • Waivers of penalties on late renewals and cancellation of contracts and licenses
  • 20% reduction on fees for license renewals [please confirm that this is what is meant by license fees renewals] for individuals and companies operating in Dubai South Free Zone
  • First year license fees for new customers in the aviation, logistics and E-commerce sectors and the Business Parks will be waived
  • Reduction of up to 25% on the renewal fees for Dubai South Business Centre customers renewing their contracts between now and October, 2020
  • Flexibility to settle annual rental fees in up to four instalments
  • Rental fees for individuals and companies looking to establish a new business will have a reduction of up to 25%
  • Opportunity to apply for a lease deferral request of up to six months for customers who operate in the Business Park Free Zone, which will be granted on a case-by-case basis.

The said incentive package complements the measures announced by the Government of Dubai and its ongoing efforts to reduce the cost of doing business in the Emirate and help the companies to maintain their resources and employees.

To know more about the Dubai South Free Zone stimulus package, please feel free to contact us at mail@affiniax.com.

E-commerce Business Setup in United Arab Emirates

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E-commerce means buying and selling of goods, products or services over the internet. E-commerce is also known as electronic commerce or internet commerce. These services are provided online over the internet. Transaction of money, funds and data are also considered to be E-commerce. While it is not new, this sector is growing rapidly across the world and creating new opportunities for businesses, particularly in the United Arab Emirates (UAE).

The current situation is further boosting the E-commerce sector in the UAE, as the behaviour of consumers is changing and social distancing is becoming the new norm, forcing businesses to transition to digital models in order to adapt. With the internet becoming an essential requirement of everyday life, many businesses are learning to take advantage of the numerous benefits of E-commerce, as it shifts from a luxury to a necessity.

Several Free Zones in the UAE offer E-commerce licenses with incredibly affordable options. However, there are several reasons aside from the cost to set up E-commerce operations in a UAE Free Zone. Some of them are:

  • Free Zones allow for 100% company ownership
  • Businesses can be started with relatively low capital investment
  • Free Zone businesses have no time barrier
  • No import duties on E-commerce license
  • 0% corporate and personal tax
  • Repatriation of capital and profits
  • Ease of opening bank accounts
  • Visa eligibility
  • Flexible office facility

E-commerce is a great way for businesses to interact with consumers internationally. It has become an important part of our society. It has also become more affordable for small businesses to use the world wide web to sell their products. E-commerce will continue to progress radically over the years as the number of internet users among businesses and consumers continues to grow.

E-commerce licenses can also be set-up with Dubai Economy- once you identify your requirements, you are good to go.

To know more about E-commerce license setup, please feel free to contact us at mail@affiniax.com.

GUIDELINES FOR DMCC MEMBER ENTITY OFFICES AS PER COMPANY REGULATIONS 2020

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In line with the new rules and regulations set out on 2nd January 2020, DMCC has introduced guidelines to define the roles and responsibilities of DMCC member entities, who are required to comply with the following changes.

Officer Designation Applicable Rules
Director
  • Appointment of Director is mandatory for all Companies except Branches entities.
  • There is no maximum limit to the number of Directors that a DMCC Company can appoint, but a minimum of one Director is required.
Manager
  • Appointment of Manager is mandatory for DMCC member entities
Secretary
  • Appointment of Secretary is now mandatory for all DMCC Member Entities except Branches. Branches have the option of appointing a Secretary if they wish to do so
  • Only one Secretary is allowed per DMCC Member entity.
Legal Representative
  • Appointment of Legal Representative is no longer allowed for any DMCC member entity, but an Authorised Representative of the Company can be appointed with duly issued Power of Attorney.

DMCC Companies registered and licensed prior to the introduction of Company Regulations 2020, which has appointed a Legal Representative and has not appointed a Company Secretary will have a maximum of twenty-four months to comply with the new rules.

The registered Legal Representative will have to resign, and if the Company wishes, it can issue a Power of Attorney to the Legal Representatives in order to make him/her an Authorized Representative. A Company Secretary must be appointed in line with the new rules.

Branches established prior to the introduction of the new Company Regulations 2020, which have appointed a Director and Legal Representatives, will have to arrange for the removal of such Directors and Legal Representatives.

To know more about this, feel free to get in touch with one of our team members at mail@affiniax.com or call us on +971 4 425 6616.

Economic Substance Regulations – Deadlines Announced so far

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The UAE Economic Substance Regulations (ES Regulations) require all UAE entities that fall within the scope of the regulations by carrying on a “relevant activity” as defined by the ES Regulations to comply with annual reporting obligations.

Due to the current pandemic and subsequent lockdown, several Free Zone Regulatory Authorities have extended the last date for making filings in compliance with the ES Regulations. The Free Zone Regulatory authorities that have extended the filing dates are as follows:

  • Abu Dhabi Global Market (ADGM) : The 31 March 2020 notification deadline is no longer applicable and a new deadline has not been announced yet. Guidance on the filing process is available on the ADGM website
  • Dubai Airport Freezone Authority (DAFZA) : The notification deadline is 3 May 2020. Guidance on the filing process has been shared with DAFZA licensees via email
  • Dubai International Financial Centre (DIFC) : The 31 March 2020 notification deadline is no longer applicable. A new deadline has not been announced yet; however, the DIFC stated that the notification must be filed during the second quarter of 2020 (i.e., at the latest by 30 June 2020). Guidance on the filing process is available on the DIFC website
  • Dubai Multi Commodities Centre (DMCC) : The notification deadline is 30 June 2020. Guidance on the filing process is expected during April 2020, but general ES guidance is available on the DMCC website
  • Dubai Silicon Oasis Authority (DSOA) : The notification deadline was 31 March 2020. Guidance on the filing process has been shared with DSOA licensees via email
  • Ras Al Khaimah International Corporate Centre (RAKICC) : The notification deadline is 30 June 2020. Guidance on the filing process has been shared with RAKICC licensees via email
  • Hamriyah Free Zone Authority (HFZA) : Entities that are governed by the Regulations will need to submit a notification by 30 June 2020, and where required prepare and submit to HFZA an economic substance declaration within 12 months from the end of their financial year (e.g. 31 December 2020 for entities with a financial year ending 31 December 2019.)
  • Sharjah International Airport Free Zone (SAIF): Entities incorporated under the jurisdiction of the SAIF ZONE Authority will need to submit a notification by 30 June 2020

In case you have any questions regarding your organisation’s reporting obligations or the deadline for your organisation, please contact us at mail@affiniax.com.

DMCC and DED announce 2 new Services

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Introducing New Services from DMCC in Partnership with DED

Last year, Dubai Multi Commodities Centre Authority (DMCC) – the world’s flagship Free Zone and the Department of Economic Development (DED), the entity of the Government of Dubai that regulates the economic activity of all onshore companies, signed a strategic agreement to collaborate on the licensing of companies in Dubai allowing them to operate within the Free Zone and onshore mainland.

In line with the partnership, DMCC has finally introduced the two new services that will further facilitate trade and boost economic activity in the emirate.

The services are as follows:

  • DED NOC to Operate Onshore
    DMCC member companies with specific service licence activities are now permitted to offer their services outside the Free Zone without having to incorporate another Company, provided that they obtain a no-objection certificate from DMCC first. Currently, there are more than 30 eligible service activities that would be permitted to conduct business outside its zone.
    The eligible DMCC companies can apply online for a No-Objection-Certificate (NOC) from DMCC to obtain the permit from DED. This NOC will be required to obtain the Commercial Permit to operate onshore/mainland, from DED.The NOC will be valid for 90 days from the date of issuance.
  • Dual Licence Office Permit
    DMCC member companies who wish to have their DED branch/Subsidiary or a DED Company with Common shareholder operate from the same JLT office address they occupy, can now apply for Dual Licence Office Permit subject to meeting the eligibility criteria.Eligibility criteria are as follows:

    1. Branches of DMCC Companies:
      A DMCC licensed Company occupying an office in DMCC Free Zone and having a branch in DED can apply for this permit in order to share the same unit (office) address with DED Company.
    2. Subsidiaries of DMCC Companies and Companies with Common Individual Shareholders:
      The Company may share the same unit (office) address, provided 25% common ownership is continually maintained.

The validity of the permit is one year, which will help save the cost of leasing another office for the DED licence. Leased/purchased property type must be office as per the title deed of the Unit. Sharing on any other property types such as “workshop, shop/retail, land, flat etc.” is not allowed.

Also, units within Business Centres, co-working spaces and Incubation Centres are not eligible for Dual Licence Office Permit as each Company must be allocated to a dedicated area within the unit with the minimum area size for DMCC Company being 300 sq. ft.

Retail and industrial activities are also not eligible for Dual Licence Office Permit.

To know more about the partnership and services, feel free to get in touch with one of our team members at mail@affiniax.com or call us on +971 4 425 6616.

RAS AL KHAIMAH ECONOMIC ZONE (RAKEZ) BUSINESS SECURE PACKAGE

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As part of RAKEZ’s commitment to offer a cost effective and world class economic zone, RAKEZ has introduced a Business Secure package that would help support individuals in the UAE to start afresh, embark on their entrepreneurial journey and turn the current challenges into an opportunity.

The Business Secure Package Includes:

  • 1-year license and establishment card
  • 3-year UAE visa and status change
  • Medical and Emirates ID

Plus, additional Incentives such as:

  • 25% discount on full dependent visa packages
  • 50% down payment, 50% after 6 months
  • Same renewal rate guaranteed rate for life

You can now start up your own business for as little as AED 11,535/-*.

Other business / office spring packages have been rolled out by RAKEZ as well for SME’s, entrepreneurs and startups keen to explore the market. These packages provide a choice for a shared workstation, serviced office, private office or customizable office situated in RAKEZ’s premier business zone without putting a high cost.

To know more about RAKEZ offers, please feel free to contact us at mail@affiniax.com.

*Terms and Conditions Apply!

Business Continuity

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The current global scenario has hampered the growth of the economy and stability with almost all sectors facing a decline as a result of Covid 19. Although this has only started to emerge, the extent of this will be noticed in the upcoming months. The spread of the virus is causing different impacts in each country and governments are quickly backing up to protect its citizens and limit the damage.
The decline experienced by the global financial markets indicate that the world economy could take much longer to recover and return to normalcy. The pathway to growth and the degree to which the demand will be delayed can be explained in three scenarios – described as V-U-L.

V – SHAPED

Equivalent to the classic real economy, where the shift and decline in output eventually rebounds back. In this scenario, the annual growth rate might completely absorb the shock.

U – SHAPED

Under this scenario, the shock persists and there is permanent loss of output, with initial growth resuming and having a slower rebound.

L – SHAPED

A more downbeat scenario where one would have to assume that Covid-19 has led to significant structural damage to the economy’s supply such as labor market, productivity or capital formation. This would have a larger impact on the economic growth, triggering a global recession.

In order for businesses to survive, companies will have to be resilient and take necessary precautions to navigate past the changing times.

  1. Establish the facts
    It becomes essential for all businesses to outline the current business scenario and its impact in the short, medium and long term, keeping in mind the present-day situation. This involves running different scenarios, revisiting key business decisions for immediate recovery to alleviate business disruptions and potential revenue loss.
  2. Employee Involvement
    Employees, being a key part of any business, should be well informed with the transformational changes taking place. With each business and industry having different requirements, the employees should be made aware of the current situation and what is expected of them. Companies should support employees and communicate clearly about adaptation to digital workplace to ensure seamless continuity.
    It is also important to utilize collaborative tools across the departments to ensure communication and quality of work or service provided to clients is not hampered/ compromised in any manner.
  3. Cloud Based Solutions
    With social distancing being practiced by most companies, it is necessary for employees to adapt to cloud based applications and storage for easy access of data and documents by all the employees.
    Working on cloud technology provides real time data, thereby resulting in transparency and deeper engagements with clients.
  4. Dedicated Crisis Management Team
    A crisis like Covid 19 is having an impact on every part of the business. During a time of complexity and uncertainty, teams should be able to adapt and proactively coordinate in an effective way. Led by the CEO, a core team should take charge, with members from different teams and functions defining key specific goals to be achieved by the organization, focusing largely on the output to be achieved.
  5. Stress Testing
    Stress testing helps in identifying vulnerabilities in the current business model and can be useful in managing risk, strategy, risk appetite and capital decisions. Internal stress testing should be conducted to identify gaps and work towards recovery planning. Businesses need to focus on key trigger areas, revenue and variables that will directly impact their revenue and cost.
  6. Managing the Funds flow
    Growth objectives are key to every organization to maximize value and preserve the continuity of funds. During such times, it is important to identify areas of surplus and deficit funds and engage surplus to cover any deficits.
  7. Support clients
    During such times, it is equally important to work closely and maintain personal relationships with customers and clients by communicating clearly to identify key areas to focus on and offer assistance beyond the areas of regular service offered.

1. Business Continuity

  • Providing your team regular updates on the current situation in the region on key labor, fiscal and monetary measures taken by the Government.

2 Cloud Based Solutions

  • Keeping in mind the safety of employees, we can analyze the current system and processes in place and provide support towards digital transformation to cloud services to ease access across the business.
  • Affiniax Partners can help identify and maintain flexibility and synchronization between the business processes, applications and IT infrastructure.
  • This can be conducted through evaluating, planning, designing, implementing and testing of cloud-based solutions for companies.

3 Cross Functional Response Team

  • Setting up cross-functional teams for key workstreams – Employees welfare and ability to perform tasks, financial stress testing of the business, evaluation of budgets and closely monitor supply chain and other areas important to businesses.

4 Stress Testing

  • Define risk factors and run business-wide stress testing using various platforms across the organization, supported by technology to enable reviews.
  • Conduct sensitivity analysis and run scenarios on the viability and financial implications of business decisions. Review of potential opportunities to grow revenues within designated risk tolerance level.
  • Scenario analysis on the variables affecting revenues and cost and identifying input variables that could affect liquidity position of the business.
  • Running different scenarios of financial models (Cash flows, Balance sheets and P&L) to measure and identify potential liquidity and optimization techniques.
  • Scrutiny of budgets (revenue, sales, marketing, inventory, investment capacity) on pricing changes and discounts and optimization of supply chain (inventory levels, after sales stock, delivery capacity and capability).
  • Implement appropriate stabilization techniques for optimizing costs and supply chain.

5 Practice with Top Team

  • Analysis and scenarios will be discussed and reviewed with the top Management via reporting tools for deeper understanding of company risk profile.

To learn how we can help you, please contact us at mail@affiniax.com

DMCC Business Support Package

Dubai Business support package

Dubai Multi Commodities Center (DMCC), the world’s flagship Free Zone and Government of Dubai on commodities trade and enterprise has recently announced the roll out of a “Business Support Package”, to support and safeguard the business interests of its members during these difficult times.

Effective from 1st April to 30th June 2020, existing DMCC members can get exclusive support as such:

  • Waiver of late license renewal penalties
  • Waiver of office sharing permit fee
  • Waiver of all Flexi Desk and DMCC Business Centre Penalties
  • Discount on license renewal
  • 3 months’ rent holiday for Flexi Desk and DMCC Business Centre tenant’s renewal (this is applicable for those who are due for renewal during the offer period).

However, all existing offers will be discontinued during this period and for all businesses with activities suspended due to official UAE Government Policy on Covid 19. This offer is extended and valid until 30 September. Terms and conditions apply.

For any further enquiries and assistance, please feel free to contact our team at mail@affiniax.com.