Consulting and Advisory

Understanding Money Mules and Their Role in Exploiting the Financial System

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Money Mules and threats to the financial system

In today’s fast-paced digital world, financial crime is evolving, and one key player aiding criminal activities is the “money mule.” While the term might sound unfamiliar to many, money mules significantly threaten the global financial system.

These individuals, knowingly or unknowingly, enable criminals to launder money, bypassing anti-money laundering (AML) measures. Understanding how money mules operate and the damage they cause is crucial to mitigating financial crime.

Who is a Money Mule?

A money mule is an individual who transfers illegally acquired funds on behalf of others, often criminals, to obscure the origin of the money. They are either witting participants in fraud or duped into the role by being promised easy money for simple banking tasks. Money mules help facilitate money laundering and make it harder for authorities to track down the original source of criminal activity.

While some money mules know they are part of illegal operations, many are unwitting accomplices, often drawn in through fake job offers, romance scams, or promises of quick and easy financial gain.

How Money Mules Exploit the Financial System

Money mules exploit vulnerabilities in financial institutions and the naivety or desperation of individuals. Here are some common ways in which they manipulate the system:

1. Bypassing AML Controls

Financial institutions implement AML measures to detect and prevent the movement of illicit funds. However, criminals use money mules to break large sums of dirty money into smaller transactions, often referred to as “smurfing.” By spreading the transactions across multiple accounts, criminals can avoid detection from AML monitoring systems, which are designed to flag unusually large or suspicious transactions.

2. Cross-Border Transfers

Money mules are often used to transfer funds across borders. Criminals leverage mules to wire money to different countries, making it harder for law enforcement agencies to track the money trail. The international nature of these transfers complicates efforts to combat money laundering, as different countries have varying enforcement and regulatory compliance levels.

3. Disguising Illicit Origins

Money mules help disguise the source of illicit funds by moving money through seemingly legitimate accounts. This adds layers of complexity to the investigation process. Once the money has been transferred through a mule’s account, it becomes harder to trace back to its criminal origin.

4. Recruiting Vulnerable Individuals

Money mules are often recruited through various channels, such as online job advertisements, social media, or phishing emails. Criminals target individuals who may be facing financial hardship or lack awareness about the consequences of their actions. They may promise high-paying jobs that involve nothing more than transferring money between accounts, masking the true illegal purpose.

5. Exploiting Technology

Advancements in technology have made it easier for criminals to recruit and coordinate with money mules. The rise of online banking, mobile apps, and cryptocurrency transactions allows money mules to transfer funds quickly and anonymously, making it more difficult for authorities to detect and prevent these activities.

The Consequences of Money Mule Activity

The exploitation of money mules contributes to a wide range of criminal activities, including drug trafficking, human trafficking, and terrorism financing. The financial system, in turn, becomes more vulnerable to these activities, eroding trust in financial institutions and disrupting economic stability.

In addition to harming the financial system, money mule activity can have devastating consequences for the individuals involved. Those who knowingly or unknowingly participate in money mule schemes may face severe legal consequences, including fines, criminal charges, and a damaged financial reputation. Financial institutions also suffer reputational damage, financial losses, and regulatory penalties when they are inadequate in preventing mule activity.

How to Protect Against Money Mules

To combat money mule schemes and protect the integrity of the financial system, it is essential for both individuals and financial institutions to remain vigilant. The following measures will help:

1. Public Awareness

Raising awareness about money mule schemes is crucial to prevent people from becoming unwitting accomplices. Education campaigns can help individuals recognize fraudulent job offers or online scams that could turn them into money mules.

2. Strengthening AML Controls

Financial institutions must continue to strengthen their AML and know-your-customer (KYC) protocols to detect suspicious transactions and accounts. Enhanced monitoring systems can identify patterns associated with money mule activity, such as rapid money transfers between multiple accounts or unusual cross-border transactions.

3. Collaboration Between Financial Institutions and Law Enforcement

Collaboration between financial institutions, regulators, and law enforcement agencies is key to preventing and detecting money mule schemes. Sharing information about suspicious activity across borders and industries can help disrupt these schemes and bring those responsible to justice.

4. Reporting Suspicious Activity

Individuals who suspect they are being recruited as money mules should report suspicious offers to local authorities or their financial institution. Early detection and reporting can prevent further exploitation and aid law enforcement in tracking down criminal networks.

Combating Financial Crime: The Urgent Need for Collective Vigilance

Money mules play a critical role in the laundering of illicit funds and the exploitation of the financial system. Their activities help criminals evade detection, making it harder for authorities to trace illegal money flows. By raising awareness, improving AML practices, and fostering collaboration between financial institutions and law enforcement, we can minimize the impact of money mules and better protect the financial system from abuse.

Individuals must also stay alert to the dangers of becoming money mules, recognizing that participation, even unknowingly, can lead to severe legal and personal consequences. Ultimately, stopping the spread of these schemes is a collective responsibility that will help reduce the global impact of financial crime.

For more information, please contact us at mail@affiniax.com.

Dubai’s Economic Ascent: A Beacon for Global Investment

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The expert team at Affiniax Partners, ready to assist businesses in Dubai.

Dubai’s economy is a testament to visionary leadership and strategic diversification. In the first quarter of 2024, the emirate’s GDP soared to an impressive AED 115 billion, marking a robust growth of 3.2% compared to the same period in the previous year.

This economic surge results from concerted efforts across various sectors, with transportation and storage and financial and insurance activities, leading the charge with identical growth rates of 5.6%.

The city’s economic narrative is one of relentless ambition and unwavering progress. Dubai’s comprehensive development plans, including the Dubai Economic Agenda and Dubai Social Agenda 2033, are pivotal in enhancing the quality of life and consolidating Dubai’s stature as a global economic capital.

The emirate’s success is not just in numbers but also in creating a dynamic business ecosystem that continues attracting foreign investments.

Affiniax Partners: Your Gateway to Business in Dubai

For entrepreneurs and businesses looking to capitalize on Dubai’s flourishing economy, Affiniax Partners stands as a beacon of expertise. Whether you aim to establish a presence on the mainland or navigate the advantages of Free Zones, Affiniax Partners offers comprehensive services to ease your journey.

From obtaining the necessary trade licenses to advising on company structures, our team of seasoned professionals ensures a seamless setup process. With a deep understanding of the local business landscape, we are adept at guiding companies of all sizes through the intricacies of establishing and growing their business in the UAE. Our services extend beyond Company Formation to include Visa assistance, including applications for Golden visas, Tax Residency Certificates, and Intellectual Property Registration, ensuring that your business is established and primed for success.

In a city that’s synonymous with innovation and opportunity, Affiniax Partners is your trusted ally, helping you unlock the potential of Dubai’s dynamic market. With our support, your business can thrive in an environment that’s conducive to growth and excellence.

Contact Us

Please contact us for any queries on Company formation, Tax Advisory, Accounting and Auditing needs, HR Recruitment Services at mail@affiniax.com or call +971 58-5620168.

A Guide to Voluntary Liquidation in the UAE

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Business liquidation in UAE process overview

Let’s face it, running a business in the UAE is exciting, but sometimes even the most thrilling ventures need to close their curtains. Voluntary liquidation could be your ticket to a smooth goodbye if you’re contemplating an exit strategy.

What is Voluntary Liquidation?

Think of it as an organised way to shut down your company. Unlike a forced closure, you, the shareholder, are in control. You can decide when to pack up, sell your assets, and settle your dues.

Why Choose Voluntary Liquidation?

  • Avoid the Drama: Dodge the stress of a court-ordered closure and potential personal liability for directors.
  • Do it Right: Ensure a clean exit by following a legal framework that protects your interests.
  • Leave a Legacy: Maintain a positive business reputation compared to a forced shutdown.

The Process of Voluntary Liquidation in the UAE

The following are the key steps in a voluntary liquidation process for businesses in the UAE:

  1. Shareholder Resolution:

    Shareholders convene a formal meeting to discuss and vote on the company’s dissolution. A notarised resolution is drafted to document the decision and appoint a qualified liquidator.

  2. Liquidator Appointment:

    Selecting a competent liquidator is crucial. They will assume control of the company, overseeing the sale of assets, settlement of debts, and ensuring compliance with regulations.

  3. Notification & Clearances:

    The appointed liquidator notifies relevant authorities, such as the Department of Economic Development, of the liquidation. Additionally, clearances are obtained from entities like utility providers, landlords, and government departments.

  4. Asset Sale & Debt Settlement:

    The liquidator identifies and values the company’s assets (property, inventory, receivables). A strategic sale of these assets is conducted to generate maximum cash flow. The proceeds are then used to settle outstanding debts according to a specific order, prioritising secured creditors.

  5. Final Accounts & Distribution:

    The liquidator prepares final accounts, outlining the company’s financial position at the time of closure. After settling all debts and liabilities, any remaining funds are distributed to shareholders based on their ownership stake.

  6. Company Deregistration:

    Following the fulfilment of all obligations, the liquidator files for company deregistration. This results in the cancellation of the business license and the company’s removal from the commercial registry.

We Can Help with Voluntary Liquidation in the UAE

Voluntary liquidation can be a complex undertaking. Our team at Affiniax Partners possesses extensive experience in navigating this process efficiently and effectively. Contact us for a consultation and ensure a compliant and successful closure of your business. Please get in touch with Nihar Kothari at nihar@affiniax.com for more details.

Streamlining Contract Management in the UAE for SMEs: The Power of Automation

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What is Contract Management – Introduction

In the dynamic landscape of modern business, Small and Medium Enterprises (SMEs) play a pivotal role, often navigating tight budgets and resource limitations. Among the challenges these enterprises face, contract management is a critical process that requires meticulous attention.

With the advent of technology, automation has emerged as a transformative solution, offering SMEs the means to efficiently manage their contracts without needing costly contract lifecycle management software.

This blog explores the profound benefits of automating contract lifecycle management for SMEs, shedding light on how automation can revolutionise their operations and foster growth.

Key Benefits of Automating Contract Management:

  1. Efficiency and Time Savings

    • Automation eliminates manual data entry and repetitive tasks.
    • Contracts are processed faster, leading to improved operational efficiency.

  2. Error & Risk Mitigation

    • Automated workflows reduce the risk of human errors in data entry and calculations.
    • Contracts are accurately managed, minimising potential legal or financial issues.

  3. Centralised Repository

    • Contracts are stored in a centralised digital repository, easily accessible to authorised personnel.
    • No more hunting for physical documents or searching through scattered files.

  4. Customisable Workflows

    • Create tailored workflows that align with SMEs’ specific contract management processes.
    • Workflow automation ensures consistent adherence to company policies.

  5. Automated Reminders and Alerts

    • Set up automated reminders for contract renewal dates, ensuring timely action.
    • Instant alerts notify stakeholders of any contract changes or updates.

  6. Enhanced Visibility

    • Automated tracking provides real-time visibility into the status of contracts.
    • Monitoring contract lifecycles becomes more manageable, enabling proactive decision-making.

  7. Cost Savings

    • By avoiding costly manual errors and delays, SMEs can save on potential legal disputes or missed opportunities.
    • Automation reduces the need for extensive manual labour, reducing operational costs.

  8. Data-Driven Insights

    • Automation generates data that can be extracted into Excel files for analysis.
    • Insights into contract trends and performance can inform strategic decisions.

  9. Scalability

    • As SMEs grow, automated contract management scales easily to accommodate increased contract volumes.

  10. Compliance and Security

    • Automation ensures compliance with regulatory requirements throughout the contract lifecycle.
    • Digital security measures protect sensitive contract information.

Conclusion:

In the realm of SMEs, efficiency and effective resource utilisation are paramount. The benefits of automating contract management can significantly contribute to these goals, empowering SMEs to navigate the complexities of contract lifecycles with confidence. As we’ve explored, the advantages span from minimising errors and costs to optimising workflows and bolstering security. By embracing automation, SMEs can enhance their contract management processes and position themselves for sustained growth in a competitive business landscape. Through automation, SMEs can unlock a new era of streamlined, effective, and forward-looking contract management.

If you are looking for a solution to your contract management, please get in touch with Mr Nihar Kothari, Co-founder and Partner at Affiniax, at nihar@affiniax.com.

Awarded as best CA & auditors at the IRECMS Dubai awards 2022

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It is a great pleasure for us to announce that we have been awarded again as the best CA & Auditors at the IRECMS Dubai Awards 2022.

Obtaining this recognition two years in a row shows us that we are continuing on the right path, and encourages us to continue improving and growing to offer our clients the best possible service.

Thank you all so much for this opportunity and for the fantastic experience!

New Criteria for Tax Residency Certificate (TRC) In the UAE

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New Criteria for Tax Residency Certificate (TRC) In the UAE

Overview:

The government of UAE, through its Cabinet Decision No. 85 of 2022 for the determination of tax residency, issued a guideline on 2nd September 2022 to determine the tax residency for a natural and legal person.

The new rules broaden the criteria of UAE tax residency as this embarks another step taken by UAE in strengthening its position in global tax compliance and provides much-needed clarity with regard to the statutory definition of UAE tax residency.

Brief:

Prior to the issuance of this decision, the UAE did not have a statutory definition for ‘tax residency.’ Previously, the Federal Tax Authority (FTA) determined the tax residency for natural persons primarily based on the number of days spent in UAE (at least 180 days in a relevant year) supported with certain documentary requirements, and for legal persons, it must have been established for a period of at least one year supported with certain documentary requirements.

Significant changes pursuant to the issuance of the decision for the determination of new tax residency:

For Legal Persons:

As per Article 3 of the Cabinet Resolution, a legal person (i.e., the company or entity) shall be considered a tax resident of UAE in either of the following cases:

  • If it was incorporated, formed, or recognized in accordance with the legislation in force in the State, and that does not include the branch that is registered by a foreign juridical person in the State; or
  • It is considered a Tax Resident in accordance with the Tax Law in force in the State.

For Natural Persons:

As per Article 4 of the Cabinet Resolution, a natural person (i.e., an individual) shall be considered a tax resident of UAE, whereby any of the following conditions are satisfied:

  • If his usual or primary place of residence and the center of his financial and personal interests are in the State, or he meets the conditions and criteria determined by a decision from the Minister; or
  • If he has been physically present in the State for a period of 183 days or more, within the relevant (12) twelve consecutive months; or
  • If he has been physically present in the State for a period of 90 days or more, within the relevant (12) twelve consecutive months, and he is a UAE national, holds a valid Residence Permit in the State, or holds the nationality of any member state of the Gulf Cooperation Council, and meets any of the following:
  • He has a Permanent Place of Residence in the State; or
  • He carries on employment or Business in the State.

However, as per Article 6 of the Cabinet Resolutions, if any International Agreement sets out certain conditions for determining tax residency, the provisions of that International Agreement on determining the tax residency shall apply for the purposes of this International Agreement.

The Minister shall issue a decision specifying the form and manner of issuing certificates for determining the tax residency for the purposes of the International Agreement.

Effective Date of this Decision

This decision shall be effective from 1st March 2023.

Application for Tax Residency Certificate (TRC)

The legal or natural persons who satisfy the aforementioned conditions shall submit a request to apply for a TRC, which shall be approved as per the requirements of the FTA. The FTA may further ask for more relevant documents to satisfy itself to issue TRC as and when required.

Role of “Affiniax Partners” in TRC Application?

The “Affiniax Partners,” with its team of experts, shall guide you (all natural and legal persons) in determining eligibility and application for TRC.

Please feel free to get in touch with our team of experts.

Written by Ms. Neha Upadhyay.

New E-Invoicing Requirements in the Kingdom of Saudi Arabia

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E-Invoicing requirements in Saudi Arabia

With Saudi Arabia mandating e-invoicing to increase transparency and compliance with tax regulations, ZATCA (Zakat, Tax, and Customers Authority), formerly known as GAZT, has issued new regulations for controls, requirements, and technical specifications.

The Generation stage commences on 4th December 2021, and businesses are required to generate, issue, and store electronic invoices and notes and should notify the Authority if any technical error arises. The second phase, Integration commences 1st June 2022, by which time taxpayers must mandatorily integrate their systems with ZATCA’s (the Authority) systems by using an Application Programming Interface (API).

In accordance with ZATCA’s regulations, all the transactions that earlier required tax invoices to be issued must comply with and follow e-invoicing requirements:

  • Supplies of goods and services that are either subject to the standard VAT rate or zero rates;
  • Export of goods and services from the Kingdom;
  • Intra-GCC supplies in accordance with the Agreement, VAT law, and it’s Implementing Regulation;
  • Nominal supplies by the taxpayer in accordance with the Agreement, VAT, and Implementing Regulation; and
  • Any payments related to the supply of goods or services and received by the taxpayer before the actual supply.

The transactions for which notes are issued as per Article 40 and 54 of the VAT Implementing Regulation shall also have to comply with the latest regulation in the following instances:

  • Cancellation or suspension of the supplies after their occurrence, either wholly or partially
  • In case of essential change or amendment in the supply, which leads to the change of the VAT due; and
  • Amendment of the supply value, which is pre-agreed upon between the supplier and consumer, in case of goods or services refund.

Transactions that are not required to follow the regulations are:

  • Transactions with Exempted Supplies;
  • Any payments related to exempted supplies received by a taxpayer;
  • Supplies subject to VAT pursuant to Reverse Charge Mechanism; and
  • Import of goods to the Kingdom.

What changes should businesses observe from 4th December 2021?

During the transition phase, businesses will be required to adjust their accounting systems and internal processes to meet the e-invoicing requirements through an ‘e-invoice generation solution’. The ‘e-invoice generation solution’ will be considered as compliant after prior verification of its conformity to all specifications and requirements by the Authority, third party, or self-certified by the person subject to e-invoicing regulations.

Business entities and banks must ensure that their accounting system has enhanced capabilities both for VAT compliance and e-invoicing solution:

  • The compliant solution should be able to connect to an internet connection and integrate with external systems by using an Application Programming Interface (API). Taxpayers will be required to work with their IT team to ensure that technical requirements are met.
  • The e-invoices and associated notes must contain mandated fields as specified by ZATCA, which will help with integration.
  • Business entities should be able to generate e-invoices in XML format or PDF/A-3 format (with embedded XML) and share the same with customers.
  • The Authority shall create a Cryptographic stamp (an electronic stamp created via cryptographic algorithms to ensure the authenticity of origin and integrity of content) after receiving the e-invoices and electronic notes pursuant to the integration procedures starting from the date determined by the authority.
  • Businesses need to prepare themselves to share tax invoices or their associated notes that have been generated electronically in XML format or PDF/A-3 format (with embedded XML) in the same format of such invoice or note with customers.
  • Businesses should be able to export generated invoices and associated notes into an external archival system.

What should the compliant e-invoice generation solution be able to do?

  • The compliant solution must be able to generate invoices and their associated notes in the XML format or PDF/A-3 format (with embedded XML) as per the requirements of electronic invoice formats.
  • The compliant solution must be tamper-resistant and include a mechanism that prevents tampering and should reveal any tampering attempts that might occur by the user or any third party in accordance with the specifications and requirements specified by the Authority. The Authority has the power to verify the e-invoicing generation solution to the specifications and requirements.
  • The compliant solution must be able to protect the generated electronic invoices and electronic notes from any alteration or undetected deletion and contain some functionalities which enable the person subject to e-invoicing regulation to save electronic invoices and electronic notes and archive them in XML format without an Internet connection.
  • The compliant e-invoice generation solution must be able to generate a Universally Unique Identifier (UUID) in addition to the invoice sequential number, which identifies and distinguish each VAT Tax Invoice, Simplified Tax Invoice, and their associated notes in accordance with the specifications, requirements, and timelines. This shall be for each electronic invoice or electronic ote as per the requirements and timelines. UUID is a 128-bit number generated by an algorithm chosen to make it unlikely that the same identifier will be generated by anyone else.
  • The compliant solution, which is used for generating Simplified Tax Invoices and their associated notes, must be able to generate a Cryptographic Stamp for each electronic invoice or electronic note. Such cryptographic stamps must have an identifier as per the requirements and timelines.
  • The compliant solution must be able to generate a hash (an enciphered text obtained by applying a one-way algorithm upon data which prevents the return to the original data or amending or tampering with it) for each generated electronic invoice or electronic note within the sequence of the electronic invoices and electronic notes. The hash of the invoice is then embedded in the next invoice in the sequence. This hash is used to protect the sequence of Invoices from tampering, whether by deletion or replacement.
  • The compliant solution must be able to generate a QR code which is a type of matrix barcode, with a pattern of black and white squares that is machine readable by a QR code scanner or the camera of smart devices in order to enable basic validation of electronic invoices and electronic notes.
  • The compliant solution must have a tamper-resistant invoice counter that cannot be reset. The counter must increment for each generated invoice or associated note, and the compliant solution must record the value of this counter in each invoice or associated note. This counter is used to ensure that invoices cannot be deleted from the end of the invoice sequence without detection.

Will there be any fines or penalties for non-compliance?

Yes, all provisions related to tax invoices in the VAT Law are applicable to electronic invoices, including fines and penalties.

Further regulations relating to the generation of e-invoices shall be made available by ZATCA in the coming months.

Affiniax has collaborated with Pagero, a digital solution provider, to ensure all our clients are compliant with the forthcoming E-invoice mandate.

Not sure if these requirements apply to you? Read our blog on applicability, as well as other commonly asked questions, to learn more.

If you would like to know more about the E-Invoicing Requirements, please feel free to approach our team.

New E-Invoicing Regulations in the Kingdom of Saudi Arabia

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Mandatory E-Invoice in Saudi Arabia

New regulations have recently been issued by Saudi Arabia to mandate electronic invoicing (e-invoice) effective from December 4, 2021, for all registered entities and businesses. The Zakat, Tax and Customers Authority (ZATCA), formerly known as the General Authority of Zakat and Tax (GAZT), has published a framework about the implementation which focuses on increasing transparency and compliance with tax obligations, which, in turn, leads to high consumer protection.

Who does it apply to?

The new invoicing regulations are applicable to all taxable persons (excluding non-resident taxable persons) who are a resident in KSA. Any customers or third parties that issue a tax invoice on behalf of a taxable person who is a resident of the Kingdom shall also be required to comply with this regulation. Taxpayers who are not residents of KSA are excluded from these regulations.

What is the KSA e-invoicing regulation all about?

Taxpayers under the KSA e-invoicing regulation are expected to issue invoices and amendments (such as debit and credit notes) electronically for all their purchase and sale transactions (including exports which may be zero rated).

The taxpayer residents and business entities will have to comply with a standard electronic format and be prepared to issue, receive and store e-invoices in a particular electronic format with predefined data fields.

But firstly what is an e-invoice and electronic notes, and what will be the content?

An e-invoice is simply a tax invoice that is issued in an electronic format. Electronic notes comprise of debit and credit notes which shall also be issued in an electronic format. A handwritten or scanned invoice will henceforth not be considered an electronic invoice, even if they are sent digitally. Only e-invoices generated in the specified format are acceptable.

The terms, requirements and conditions applicable to tax invoices as per Article (53) of VAT Implementing Regulation will be determined at a later stage by ZATCA for a smooth transition.

Can I issue scanned copies or PDF documents for invoices?

No, scanned and PDF invoices will not be considered as an e-invoice. Invoices that are handwritten, Microsoft Word invoices and any unstructured invoice on a webpage or email will not be accepted.

Should a taxable person generate the e-invoices for sales outside the Kingdom (exports)?

Yes, it is mandatory for all taxable persons to issue and store the e-invoices starting from December 4, 2021, for all taxable supplies, whether it is subject to standard rate or zero rate for resident and non-resident consumers.

When will this be implemented?

ZATCA will be implementing e-invoicing in two stages. ZATCA issued their first e-invoicing regulations on December 4, 2020, by giving a period of 12 calendar months from the date of publication for businesses to start generating invoices.

Hence, the first phase of Generation shall commence from December 4, 2021, and it will be mandatory for businesses and entities (excluding non-resident taxable persons) to generate, issue and store electronic invoices and electronic notes, related to their processing and record keeping as well as any other third party issuing tax invoices on behalf of a taxable supplier.

From June 1, 2022, all taxable persons must integrate their internal systems with ZATCA’s system through an API (Application Programing Interface). The timelines for integration with the system and phases are yet to be announced.

Affiniax Partners has collaborated with Pagero, a digital solution provider to ensure all our clients are compliant with the forthcoming E-invoice mandate.

In case you would like to learn more about the E-Invoicing requirements mandated under the regulation, read our blog on the subject.

If you would like to know more about the E-Invoicing Regulations, please feel free to get in touch with our team.

How to Achieve continuous growth and improvement

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Grow your company using ISO systems and checks

Within today’s Quality Management Systems, ‘Continuous Improvement’ is one of the most important principles, especially within the ISO 9001:2015 Quality Management System.

It plays an important part in keeping the organisation competitive, and must be a permanent objective within the organisation.

In reality, history shows that many organisations go out of business simply because they are not able to improve as quickly as their competitors!

So, what is Continuous Improvement? It is defined as “a recurring activity to increase the ability to fulfil requirements.”

Within ISO 9001:2015, its focus is on increasing the ability to fulfil quality requirements. Improvement activities are similar to problem solving activities. The big difference is that improvement activities are planned and usually organised as part of a larger program, whereas problem solving is usually more reactive and unplanned.

WHAT DRIVES CONTINUAL IMPROVEMENT?

Continual improvement is driven by the objectives set by the Senior Management Team.

As a minimum, quality objectives should address:

  1. The improvement of internal efficiency
  2. Individual customer requirements
  3. The level of performance that your market sector expects

There is no requirement that the organisation should set objectives for improvement of all its processes at any one time. It would be unrealistic to expect an organisation to make progress in all potential improvements simultaneously.

Each improvement will require the commitment of resources, which should be prioritised by top management, especially if investment is required.

HOW DO YOU IDENTIFY SOURCES OF IMPROVEMENT OPPORTUNITIES?

Inputs for improvement opportunities are obtained from the following sources:

  • Customer satisfaction
  • Customer complaints and feedback
  • Market research and analysis
  • Inputs from employees, suppliers, and other interested parties
  • Internal and external audits of the quality system
  • Records of product or process non-conformances
  • Data from process and product characteristics and their trends

Opportunities for improvement may also be identified on a special project basis. The following are examples of such projects:

  • Non-value-added use of floor space
  • Excessive inspection/testing
  • Excessive handling and storage
  • Excessive failures and costs to quality
  • Machine set-up changeover times

The majority of organisations with a Quality Management System use some form of the PDCA cycle.

Where:

P – Plan

  • Resolve a problem: define, analyse, and identify root cause
  • Improve a process: change to create improvement

D – Do

  • Resolve a problem: devise a solution
  • Improve a process: encourage changes on a small scale to induce improvement

C – Check (Monitor)

  • Resolve a problem: confirm outcome and identify deviations and issues
  • Improve a process: investigate selected processes to verify if changes are working

A – Act

  • Resolve a problem: standardise solution, review and define next issue
  • Improve a process: to secure the greatest benefit from change

The PDCA cycle is a repetitive four-stage model used in business for the control and continual improvement of processes and products. The PDCA model is also known as the Deming circle/ cycle/ wheel. The Deming cycle, or PDCA Cycle consists of a logical sequence of the following four repetitive steps for continuous improvement and learning: Plan – Do – Check (Monitor) – Act.

If you want to know how to drive continual improvement in your company, please  contact mail@affiniax.com or call 04 425 6616 and we will work with you to show you how!

The Importance of Correctly Managing Your Team

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How to manage employees effectively using ISO Management standards

Many businesses, no matter what the size, forget their most important asset. Their staff! It’s not easy when you, as a business owner, CEO, or General Manager, are constantly trying to balance profit and loss, fight suppliers, or chase debtors to remember that there is a team below you waiting for leadership, decisions, and support.

Communication, as we all know, is key in any business. However, it is all too often overlooked when it comes to internal communications. Business leaders need information to make good, solid business decisions. So, they need accurate, timely information from their Heads of Departments (HoDs). These HoDs need to collect and collate the information required from their teams. But if the teams don’t know what information, in what format, when, and why, that information will be slow, possibly incomplete, or inaccurate.

A team is created by working together towards a common objective, supporting each other, and providing clear and consistent input to the next in line’s process. This requires leadership, knowledge, and support. Every member of a team is important. Every member of a team needs to know why they are important and feel important. A team needs developing, which means that each team member needs developing, not just within the business, but within the person.

The 3 main ISO management systems, all now in a new and improved format, help place the individual staff member, no matter what role, within the system. It helps business leaders to put in place those processes and procedures that will enable staff to feel part of the team, support them, develop them, and, in doing so, provide consistent, high quality, and safe services and products to your customers in order to meet or, better still, exceed your expectations for them.

If you want to know more about how ISO management systems can improve your company, please contact mail@affiniax.com or call 04 425 6616.

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