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.

IS THERE A LINK BETWEEN A CORPORATE CULTURE BASED ON SHARED VISION AND VALUES AND ORGANISATIONAL PERFORMANCE?

I have been pondering over this question for many years and now believe that more and more companies are beginning to recognize the importance of strong corporate culture based on shared vision and values of all stakeholders (more importantly of their own employees) in achieving the bottom line.

Even though the idea of vision and values has been explored extensively by numerous academicians and business leaders, and the impact or consequences of developing effective values and vision are well documented, I am surprised to observe that many organisations fail to develop a vision and values that are lived and are resonated with everyone within an organisation.

Furthermore, in recent years, the question about increased investments in people processes has become topical and it is argued that building intellectual capital of employees based on the shared vision and value is connected to a better degree of employee’s alignment with their organisation, and hence is crucial to any organisation’s success story.

Most organizations, in response to the needs of the global competitive environment, require their managers and executives to deliver products and services that are in line with external or environmental requirements, stakeholder expectation and to be profitable while all the time working to appease a diverse community of consumers worldwide.

Many argue that the enhanced organisation’s performance can become a reality once the leader becomes a visionary leader and cultivates the strategic intent of the organizations. And for many businesses, leadership with vision as a core component is the answer or at least the most important piece of the Jigsaw puzzle.

However, in my opinion, for a vision and corporate values to have an impact on the organisation’s performance, having a visionary leader is just a starting point. The real impact should come once the corporate vision and values are fully integrated and shared among all employees of an organisation, which forms the basis of the organisation’s culture.

Similar to a shared vision, building a values-driven culture where employees find an alignment between their personal values and the organization’s values is the key to organizational success. In my opinion, employees should be included in the development process of core corporate vision and values. This will lead to improved internal communication, building a performance-enhancing corporate culture that facilitates leadership and employee’s alignment with the strategic goals of the organization and in the end the organisation’s bottom line.