Why Outsource Bookkeeping and Accounting Function?

Outsourced CFO Services Dubai
Every business is different and one business’ proven formula may not fit another’s. It is very important for a Company to maintain its financial discipline, irrespective of the nature or size of the business. Some of the key benefits of outsourcing finance operations are:
  1. Saves time – One of the most common and obvious advantages of outsourcing is the amount of time you save. It’s a simple concept: accounting and payroll take time. If you’re doing it yourself, then that’s time lost. There are a lot of different aspects to consider and it becomes a balancing act. By outsourcing your accounting and payroll services, you simply save time that’s better spent on core tasks.
  2. Reduced Overheads – By outsourcing accounting, a Company saves overheads like visa costs, perks, visa deposits, sick leaves, annual leaves etc.
  3. Faster decision making – Our reports are customizable and helps the management to make informed decisions at the right time, which is crucial for any business to grow exponentially. After all, if you’re paying money to work with the experts, they’ll have the information you need to see in a way that makes sense. This allows you to continue to make decisions to grow your business with peace of mind.
  4. Updated Big Picture – If you’re on the fence about outsourcing one service or another, an important thing to keep in mind is the amount of information and insight you might receive. Good quality accounting and payroll companies will have a “big picture” in mind after dealing with your company for a while. This information can be had at a moment’s notice, and advanced technologies can help you obtain personalized reports giving you the insight you need to further your company.
The types of Outsourced Accounting and Bookkeeping Services we offer are listed below:

Bookkeeping / Outsourced Accountant

A service which helps the Company maintain their set of books in complete order, compliant with local laws and reconciled with various statements. This is a basic feature and  the minimal requirement for any Company, whether it is a startup or a Multi-National entity. Our bookkeeper shall handle day-to-day data entry, either on a full-time deputation basis or through regular visits. Typical kinds of bookkeeping outsourcing could be on a Full time, Part Time or Project Basis.

Management accounting / Outsourced FM

Management accounting entails the management of business assets, internal business operations of clients, reports on profit and loss based on the company budget, reports on the fulfillment of key performance indicators or performance metrics that are uniquely adapted by the company, cash forecasts and revenue projection, among others. In managing this data, your provider must assume an eagle-eye approach with regard to how your company’s leadership realistically fulfills all its financial goals.

Financial controller services / Outsourced CFO

These services cover coordination with bookkeepers and business owners in the completion of monthly management reports. In the fulfillment of these services, your provider will handle financial data that is crucial to hiring, dealing with clients, and the like—an assessment of how healthy your business is at any given time. Financial analysis is a part of this service, which includes data that pertains to product cost calculation; profitability; reviewing of credits and rebills; and reviewing company sales contracts to determine impact on accounting policies, among others.

Payroll services

Another service that is available is the management of your company’s payroll. Our payroll services include the tallying of your company’s pay cycle, the accounting of on-demand services, end-of-month services, and end-of-year services. Your provider is obligated to learn the payroll management norms of your company, as well as what the just and timely standards are for your employees’ compensation, in order to ensure that they adhere to the same.

To know more details, please contact Nihar Kothari, Partner at Affiniax at nihar@affiniax.com

SUBMISSION OF CBCR NOTIFICATION TO MOFA

All multinational groups with Group Revenue equal to or exceeding 3.15 Billion AED must read this carefully. Otherwise, there is a risk of AED 1,000,000 penalty if the form is not submitted by 31 December 2019.

Ministry of Finance (MoF) has required all eligible entities to submit CbCR notifications before the 31 December 2019 deadline. The purpose of reporting is to eliminate gaps in information between taxpayers and tax administrators. Cabinet Resolution No. 32 on Country-by-Country Reporting regulation was issued in UAE on 30th April 2019 and requires those entities which are tax residents in the UAE and part of a multinational group; to file a notification to the Ministry of Finance in a specified format.

Applicability of Resolution:
Multinational groups with consolidated revenues of at least AED 3.15 billion (approximately USD 855 million) per annum and wherein,
  1. An Ultimate Parent Entity established in the UAE being tax resident (being parent company of a Multinational Group)
  2. A Constituent Entity, through ownership or control of a Multinational Group in UAE.
Compliance Requirements:CbCR Notification Notification must be submitted, on or before the last day* of the group’s financial year by the Constituent Entity of an MNE Group being Tax Resident of UAE.

*Where financial reporting year of the Multinational group starts on 1st January 2019, the due date of first notifications must be on or before 31 December 2019

CbC Report Filing
The filing must be done within 12 months from the end of group financial year* by:
    1. Parent Company being Tax Resident in UAE
    2. Constituent Entity (being tax resident) on fulfilling certain conditions.
Penalties for Non- compliance:
Failure to keep the documents and information for a period of 5 years from the date of submitting CbCRAED 100,000
Failure to provide any information required in accordance with the CbCR and notificationAED 100,000
Failure to report or notify on or before the due dateAED 1,000,000 plusAED 10,000 per day subject to maximum AED 250,000
Failure to provide complete and accurate informationAED 50,000 – 500,000
 How Affiniax Partners can Help
  • Assessment of applicability of Regulation CBCR requirements
  • Assist in Notification Compliances
  • Assist in aggregating the data required under the CbC Reporting
  • Advisory services

ROLE OF AN ACCOUNTANT IN BUSINESS OPERATIONS

An accountant can be anything from a simple bookkeeper to a strategic advisor, interpreting financial information for senior decision-makers in the business.

Financial Data Management
The accounting structure of a company is an essential component of business operations. One of the primary roles of an accountant usually involves the collection and maintenance of financial data, as it relates to a company or firm. The accountant ensures that financial records are maintained in compliance with lawfully accepted procedures and policies on the corporate level. The financial information for any organization should be kept in a pristine manner because it is a key component used to operate and manage any business.

Managing the financial data of an organization can also include more sophisticated duties, such as developing, implementing and maintaining financial databases, as well as establishing and monitoring control procedures.

Analysis And Advice
As analysts, accountants may perform certain types of analysis using financial data that is used to assist in making business decisions. From deciding which kinds of supplies to order, payment of bills to payroll, the accountant handles many intricate financial details on a daily basis. Advising on business operations can include issues such as revenue and expenditure trends, financial commitments and future revenue expectations.

The accountant also analyzes financial data to resolve certain discrepancies and irregularities that may arise. Recommendations may also involve developing efficient resources and procedures while providing strategic recommendations for specific financial problems or situations.

Financial Report Preparation
Accountants typically prepare financial statements that may include monthly and annual accounts based upon the financial information that is compiled and analyzed. The preparation of financial management reports can include accurate quarterly and year-end closing documents. Reports compiled may be used in connection with the continual support and management of budgetary forecast activities.

The financial reports may be used by a financial director or officer for the development, implementation, and operation of a company’s financial software and systems, such as Hyperion, Excel and CODA Financial Management.

Regulatory and Reporting Compliance
An accountant may also be responsible for ensuring that all financial reporting deadlines are met, internally and externally. For example, quarterly, semi-annual and annual reports all have specific deadlines, as well as some tax implications. Monitoring and supporting taxation issues and filings can also be included in the role of an accountant. The accountant also usually coordinates the audit process by assisting with financial data preparation.

External Business Affiliations
Often, accountants must work with financial professionals from the four major fields of the industry: public, management, internal auditing, and government accounting. Accountants may provide data to a public accountant, who acts as a consultant, auditor and tax service professional.

Corporations, nonprofits, organizations, and governments use management accountants to record and analyze the financial information of the businesses in which they are employed. They usually advise company executives, creditors, stockholders, regulatory agencies and tax personnel. Accountants may also work with government officials who are examining and maintaining the financial records of the private business for whom an accountant is employed, in connection with taxation and government regulations.

WHY BUDGETING IS CONSIDERED KEY TO BUSINESS FINANCIAL SUCCESS?

One of the most important tools an entrepreneur can develop for the financial success of a business  is a budget. Budgets allow a business owner to not only plan for expenses, but also analyze expenditures and make changes according to the needs of the enterprise.

A business that doesn’t budget sets itself up for a host of financial problems down the road. This is true for businesses of all ages and sizes. Conversely, a business that develops short- and long-term business objectives by creating a detailed business plan can create a road map for financial success and opportunities to expand.

Just like a household, a business has certain debt obligations and expenditures it is responsible for. Imagine the potential implications if a business is unable to meet even one financial obligation, because of poor budgeting. Being unable to meet payroll means employees will leave the company; not carrying insurance leaves the company open to liability; failure to pay rent means eviction; and not paying statutory taxes on time leads to fines.

Developing an accurate budget is a critical component of financial success; that being said, a budget is a living tool that should change according to the needs of your business. When developing an initial budget, try best to accurately estimate income and expenses, but know that the figures will change as expenditures rise and fall. For example, if you overspend on office supplies but overestimate the cost of your utilities, feel free to adjust the numbers in the budget accordingly for that month – you didn’t do anything wrong! Budgeting is a trial-and-error process, and the accuracy of your estimations will improve as you continue to follow the budgeting model.

After the budget has been developed, it’s important to analyze actual results at the end of each month. Compare expenditures and income to the budget planned, and try to develop a sense of how you performed in relation to your budget goals.

Benefits of Budgeting:
A carefully constructed budget allows a business to continually track where they are financially. This allows for strategic, long-term planning for everything from current operating costs to potential expansion. Other benefits include:
  • The ability to set sales goals
  • The chance to open lines of credit
  • The ability to make decisions about salaries, bonuses, benefits and overhead operating expenses
  • Easier tax preparation (VAT)
  • Plan and predict cash flows

To ensure budgeting is done accurately, it may be worthwhile to hire an outside accountant, or a business manager who has expertise in business finance. We can help you establish an accounting system, track expenditures and produce reports that will help you make calculated and informed decisions about business operations. Please click here to get details as to what we have to offer.

To sum up, it is very well said by Joe Biden that “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”

HOW CLOUD-BASED ACCOUNTING CAN BENEFIT YOUR BUSINESS

Would you have been interested in a “cloud based” accounting application only a few years ago? Probably not. Majority of small business owners are still trying to wrap their heads around the traditional accounting system wherein you hire an accountant on a payroll rather than a scary thought of outsourcing the accounting and trusting someone with your most critical financial data outside the company.

“Consistency requires you to be as ignorant today as you were a year ago.”- Bernard Berenson

The very fact that you’re reading this article marks a milestone. Cloud Accountants have been at the forefront of this change for years now and here at Affiniax Partners, we get it!

Cloud accounting services are software stored and accessed online, making them an attractive option for small business owners. Many small business owners are taking notice, particularly because of their benefits.

The benefits are many, including:
  • Access from anywhere;
  • Integration with other popular third party cloud applications and banking software;
  • Better backup, quicker bug fixes, immediate access to upgrades;
  • And, let’s face it: better security. But with so many threats today, many business owners are reluctantly agreeing that their financial data is probably better secured by a cloud provider whose business model is reliant on security than on their own server that’s looked after maybe once a month by their local IT guy.
Various cloud accounting softwares that we work on include QuickBooks, Online, Xero, Cheqbook, Kashoo, Wave, Zoho Books, and FreshBooks.

We live for the online world and by using current software in the cloud we can provide efficient advice to you. We can advise on these systems to create efficiencies in your business too. We assist businesses from the start up stage right through to more established business looking at more regular advice and strategic planning.

We have found that our clients who have regular contact with the team through reporting and analysis, are giving themselves a better chance to grow and are receiving great results.

Get in touch with us to see how we can help!

THE BENEFITS OF MOVING TO A CLOUD ACCOUNTING PLATFORM IN THE UAE

The benefits of moving to a cloud accounting platform in the UAE

The world we live in is rapidly moving towards digital for all aspects of business, one of the most aggressive moves is that of the accounting world. With your company’s financials at stake, what are the real benefits of moving to a cloud accounting platform? Here are the top reasons you should be considering a move to cloud based accounting.

Reduced Capital Expenditure

The move to cloud not only offers an operational cost option for the software. It also reduces the need for infrastructure to support it. Costly hardware and backup solutions are not required as they are now provided as a part of the software as a service offering. The scale of the infrastructures offered by the service providers will generally far exceed an in-house operation, so it will also increase your business’ accounting security and availability.

Reduced Total Cost

Not only does your online accounting system reduce your capital expenditure, it actually reduces the overall cost. Cloud accounting solutions can enter the market on a freemium model (base levels of the software are offered free with the choice to upgrade for more advanced features) and can be up-scaled on users and requirements as necessary.

There is now no need to invest in an all-encompassing system of which you will use a minor selection of the functions.

Scalability

A cloud-based system scales to fit your company. Entrepreneurs have a very cheap but limited system, this can grow to add users and functionalities as per the requirements of your business and team. The system will grow alongside your company and it will allow for the addition of functions and resources as required.

Staffing efficiency

With the use of technology, manual tasks can almost be eliminated. This opens a business’ options to allow outsourcing of technical and operational functions. Functions such as the capture of expenses receipts can now be eliminated by using application based functions on one’s phone. A simple photo is taken and it is assigned to the correct account. This means that no longer are you counting through endless receipts at the end of the month and you can easily ascertain the cost and value of each client’s activities.

Real-time information updating

From your accountants to your C suite, the information is available as live. The system will allow you to build dashboards and reports which are tailored to the person using it. A C-level may want to see more of an overview whilst an accountant may need more transactional level information. With the connection of bank accounts to the systems you achieve real-time, live accurate data.

Access from anywhere

Part of the success of cloud computing is the ability to access information from practically anywhere. The rise of smartphone adoption has allowed business officials access to key company information as long as they have a form of Wi-Fi connection.

Security

Cloud solutions often face the issue of security and people often think that because a system is out of the office it is less secure. However, exactly the opposite is the truth. The following shows just a few of the key security enhancements that migration to cloud-based accounting will offer:

  • User authentication – two-step authentication for logins and transactions ensure that with the use of 2 personal devices only can you access the account.
  • Data encryption – industry-level encryption services ensure that information is delivered and translated to correct areas only.
  • Network security and data center – economies of scale allow a much higher level of infrastructure and the security that runs within it. This can offer governmental levels of security at a fraction of the price.

Immediate Fixes

Most softwares offer an uptime guarantee of >99%. Their vast teams ensure that updates, patches and fixes are completed before issues occur. They are also often very responsive to system improvements and thrive on critical feedback. The systems can literally change and improve in front of your eyes.

Data Backup and Restoration

One of the largest investments in accounting is the backup of the data. If you do not have a backup of your software offsite you run the risk of losing your data. It is said that 60% of companies that complete data loss will be shut down within 6 months. With cloud accounting, you have servers based in environmentally perfect surroundings, these will be replicated in similar environments, often in other countries. Only severe disasters could disrupt these types of systems, and at this point, we probably wouldn’t be worried about our accounting.

There are many benefits to promote the adoption of a cloud-based accounting system in the UAE and beyond. It is vital that you choose the right team to help you set up or migrate the services, and to see if it is a viable option in the first instance. Speak to one of our team to understand the benefits to you and your business and grow with the best.

9 KEY POINTS TO BECOMING A PROACTIVE ACCOUNTANT

As a business owner we often feel if we had that something extra, something better and something clearer to take an informed decision. And that ‘SOMETHING’ often depends on the proactive approach from your Accountant. As a business owner and as a Chartered Accountant, I understand the limitations that we come across at both ends.

Our profession advocates a constant training to be provided not only for technical aspects but also for strong interpersonal skills, organisational competence and intellectual ability. So what are these characteristics? What makes someone stand out?

Here are 9 points that I think is important to understand the responsibility of a Proactive Accountant:

1. Stay updated all the time

Accountants must constantly stay up to date with the profession. Attending refreshers, going to conferences/ seminars and in house training is a must. Technological advancements are also evolving at a furious pace, so these also must be kept up with. Continual personal development is a must, not an option!


2. Story behind the numbers : The Bigger Picture

Providing a data generated report is easy. Staying on top of all the figures and paperwork is more important. At the very least, they need to understand where these numbers are coming from and what does it mean for the business. Good accountants will have a much shorter list of targeted questions that are developed specifically to aid their understanding which allows them to focus on the big picture.


3. Importance of Time

Every business needs management reports at regular intervals if not at real time. If these reports come after 2 months, it is like a post mortem report – you can read through it but cannot change anything.


4. Inter-dependability and Accountability at each level

It is important to make every effort to do the right thing. Every process in an organisation is linked to Accounts Department somehow. Accountants need to have exceptionally well people skills as they typically work in coordination with different departments within an organisation. They have the opportunity to work with different types of professionals and personalities. Therefore, they are required to be
generous with what they know; sensitive to other’s needs and be supportive of their team’s goals. We all succeed when we work together as a Team.


5. Decision making, critical reasoning & analytical ability

Business owners want their accountants to be strong and helpful in decision making, however decision making can be hard. There is always a tendency to put off decisions by procrastinating and concluding that you need more information, only to later conclude that you need even more information. A good accountant should always determine what is relevant and what is not.


6. Trust factor

The information that accountants work with is highly confidential in nature. This is why trust and professionalism are important traits that they must always abide by. Not only is this the right and ethical way to go about their businesses but having a reputation for trustworthiness will win plaudits in the long run. I firmly believe that we trade on our knowledge and ability, but we only get these opportunities through
demonstrating our commitment to client confidentiality.


7. Solutions seeker, not fault finders

Great leaders have the desire to help others succeed. Don’t find faults in the system, find a solution that helps the organisation to overcome an obstacle. Leadership characteristics can be taught but leadership must be exhibited day in and day out.


8. Commitment

Companies are looking for motivated, dedicated individuals for long-term employment. There is no short-term solution, neither for business owners nor for an Accountant.


9. Enjoy what you do

This last one might appear strange, but I firmly believe that we all need to enjoy what we are doing. There is no fun in 9-6 job unless you have a good working environment, surrounded by people who are happy and joyful. Work takes up so much of our time and it is in my opinion that mere monetary rewards will not keep someone in a career they do not enjoy. Whilst no one should expect to be smiling all day, every day it is important we have some fun along the way.

The characteristics of a proactive accountant starts with the basics of sound technical ability and solid ethical foundation. These are considered as a baseline and the Accountant needs to grow beyond the “rules and regulations” mind-set of our profession. Attaining and maintaining the characteristics mentioned above require a personal commitment but are crucial to the accountant’s long-term success. Have you got what is takes to be a good accountant?

HOW MUCH DOES AN ACCOUNTANT COST IN DUBAI?

The recent changes in the business world in the UAE, particularly the introduction in VAT, has seen significantly increased demand for accountancy services. Until recently, many small and medium businesses may not have had their financial statements professionally compiled or audited whereas newer regulations have made this a necessity rather than something that was done for a secondary purpose (applying for financing for example).

This has, in turn lead to many more business owners and senior managers needing to ask how much these services will cost, and, as is often the case, there isn’t a simple answer.

Rather than try and pick an arbitrary number out of thin air, this article aims to highlight the factors that will impact the cost of accounting and bookkeeping services to help you when making the decision that fits your organisation.

The Scope of Work:
Perhaps the most obvious consideration relates to what type of accountancy you need to be taken care of. This might be registering your company with the FTA for VAT or filing a VAT return. It could be a far broader requirement such as accounting consultancy or even full time bookkeeping. This might be an in house dedicated service or, as is often more appropriate and financially viable, outsource bookkeeping. To make sure you get the quality of service you require, have a look at testimonials and client comments and consider who your competitors and clients are using for their accounting needs. Most importantly, check that the potential accounting service you are considering is experienced and qualified to handle the type of service you will be paying for.

The Scale of Work:
It goes without saying that handling the books of a multinational corporation is going to have a different cost associated than looking after the accounts of a sole proprietor. Also consider the complexity of the industry you are involved in. Large scale construction with multiple sub-contractors and projects spanning multiple financial years are going to have complicated requirements. They may have phased payments agreements and trigger milestones that will require extensive if not specific specialist skills and experience compared to a retail outlet for example. One may require a full time team of accountants whereas the other may need part time assistance for which the costs are going to be relative.

Sheer Numbers:
Should the gross turnover alone be a factor in determining the cost of accountancy services? This is an interesting question on the surface. It may appear that the amount of chargeable work is the same for an organisation turning over $100 million with 100 transactions compared to another turning over $1 million from 100 transactions. In reality, this is not usually the case and higher gross numbers, more often than not, will demand a higher fee. There will be different levels of responsibility and risk involved and making sure your chosen accounting professionals have the relevant experience and confidence with high value transactions is going to be vital for your own peace of mind.

Employee or Outsource:
This is one area where you are likely to see significant variation in costs. Having an in-house accountant will incur a salary relative to the experience and skills of the employee. Add to that visa costs, medical insurance and holiday cover and you will have a fixed and determined cost. Outsourcing, provided you have selected the right partner, is likely to represent a lower overall cost almost by default. Consider also that you may well have a team working on your accounts with broader skillsets and combined experience. You could well be getting considerably more bang for your buck if paying for the time they are dedicated to your books rather than for a full working day, week, month or year.

So How Much?
When push comes to shove, you are going to get broadly what you pay for and cheap is rarely the best and the best is rarely cheap. The important thing to ensure is that you are getting great value and the best service for the cost.

Why not speak to the team at Affinax and let them guide you on what services they can provide and how much value they can deliver for you.

WHAT IS THE COST OF OUTSOURCING THE ACCOUNTING AND FINANCE FUNCTION / DEPARTMENT?

Understanding the cost of outsourcing can be confusing. In a field where there are so many options, it is difficult to determine the cost of the accounts and what actually defines this outgoing. Here are six factors that can help you determine the cost of an accountant and why.

1) TRANSACTIONS

On a pure labor cost basis, the number of transactions your business conducts will dictate a portion of the price with an accountancy firm. Quite simply, if your business conducts a few transactions throughout the year, it will cost less than a business that has thousands of transactions.

An important role of an accountant is to account for the business incomings and outgoings on an accrual basis. This shows you, and others, what financial transactions have occurred, how and where?

2) TOTAL REVENUES

Much like the number of transactions, the value of transactions and therefore revenue will have an impact on the cost. Large transactions can often be more complex but more importantly, they carry risk.

It is vital to ensure that if your business is conducting high value transactions, the outsourced accountancy firm has the capability and experience to align with your business. This can come with a price.

3) COMPLEXITY OF BUSINESS

An accountant’s cost is also affected by the complexity of your business. A single office in a single location will have a very different price to the one that is read across several jurisdictions for instance. The makeup of a business complexity can follow a few guidelines:-

  • Entities:
    • How many entities does your company have?
    • Is it a single company dealing only with customers or is it a holding company with many entities serving different functions below?
  • Jurisdictions:
    • Where are the business (es) based?
    • What activities are they carrying out?
    • Is your business based locally, regionally, globally or offshore?
  • Bank Accounts:
    • How many bank accounts are to be served?
    • The number and type of transactions will be monitored.
  • d) Business Model : Various businesses have inherent complications. A single owned proprietorship conducting consultancy services will be much simpler compared to a contracting business having continuous contracting services.
4) INTERNATIONAL ACCOUNTING STANDARDS

An accountant’s cost can also change based on their ability to conform with the International Best Practices. It is important here to align your business to your accountant. An accountancy firm is only as good as its employees and often they would have gained their certifications from abroad first. What is the make-up of the company and to what best practices do they adhere? A big four company will cost you more but has the strength to back and certify your accounts to global standards. Do you need the auditing power of a big four company or will a base level to international mid-tier group perform the task effectively?

5) ANALYTICAL AND MANAGEMENT SUPPORT

If you cannot measure something, how can you improve? It is very important to ensure that your accounting firm can give you the reports you need. These vary from business to business and from C-level to C-level. Everyone wants something different based on what is important to them.

The difference of cost can also change with this factor. Many low to mid-tier firms will not have the ability to customize report for your business. They will use accounting software and will pull out reports in that standard. The more effective firms will tailor it to exactly what you need.

However, the cost of getting the exact figured you need can be outweighed by its significance to your business. Getting improper or ineffective reports can affect your decision-making ability and the future of your business.

6) EXPERIENCE

When choosing an accounting firm in the UAE, you must understand the experience of that company. Aligning your company, its jurisdiction and activity to the skill set of the accountant is vital.

When evaluating the company, you can ask for references or details of the company that have similar stature and activities to yours. Most accountants will give you a list of the big companies that they have worked for or work with, but it is important with alignment to your business – the answer is no. Choose a company with experience in your field, your location(s) and with a proven track record of success.

The cost of experience can be high. For an accountant, landing a multinational can affect its own pricing model. Make sure you align your business with the correct skill set to attain the best results.