For both start up’s and established businesses, it’s necessary to keep the financial records in order. For this purpose accounting and bookkeeping is used. Accurate accounting which is done clearly without any error is mandatory for legal requirements as well as for the sustainability of the company. An accurate booking will ensure you better control of cash flow, help in making decisions of expenditure, to plan on investments etc. Nobody wants an unexpected financial crisis which is a result of poor accounting and planning. We mentioned several times about accounting and bookkeeping which is not familiar terms for everyone. We will see in detail What is accounting and bookkeeping and the importance of both in a business.

Accounting

Accounting is referred to the process of tracking the financial transactions in a company or business. An accountant is the one who gives financial advice and makes plan about the company’s finance structure. Before all the companies used to keep paper records of all the transactions. It will be convenient in the beginning to keep the physical records but there is a chance of significant risk too, as there is a chance of loss and damage can occur to these. Also, manual recording consumes time and increased labour is required.

Accounting Software

Considering the efficiency and easiness, nowadays all Accounting Companies in Dubai and around the world switched to accounting software. Advantages of accounting software are:

• Less time
• Reduced labour requirement
• Easy preparation of invoices
• Easily you can control projects expenses and cost
• For financial analysis, reports can be generated
• Tax returns can be prepared easily
• You can link your account to bank and transactions can be recorded easily
• Easy management of cash flow

Accountant

Most of the companies hire accountants as they can help and assist you in preparation of tax by saving your time and money, whether by managing your company’s expenses or by avoiding the possible penalties by the negligence of some tax clauses. Moreover, they add value to the company. Duties of an accountant are:

• Managing data organized by bookkeeper
• Preparing reports of financial transactions
• Analysing financial reports and consultation

A qualified and experienced accountant knows the way to interpret the financial data of a corporation and advice helpful tips for growing the business and increase profit. As a startup expands and seeks out funding, it becomes essential to prove the corporate is financially sound. Well-prepared financial statements proofs that a company’s finances are so as which it can combat debt or equity.

Accounting requires a better level of study and expertise than many business owners have. For many companies, especially startups, hiring an accountant from accounting firms in Dubai may be a crucial a part of successfully managing and growing their business, and that they can quickly become a finance partner to a growing business.

Bookkeeping

Bookkeeping is just a process of recording all the financial transactions of a business on daily basis. Proper bookkeeping is recommended to track the cash flow of your business. Bookkeeping helps to stay informed about all the due bills or outstanding payments.

Bookkeeping is done on daily basis, that is, recording of monetary transactions like sales and purchases, in other words, daily income and expense, then storing the recorded information which is required at the time of auditing done by Audit Services in Dubai. Also, it is used by the accountants to make reports on financial statements and analyse the financial status of the company so that the company can plan a profitable future.

Bookkeeping and small businesses

A start-up owner or those who own small businesses may be able to do bookkeeping in the initial stage, by using an easy convenient software. There are many software and apps which can simplify bookkeeping and are an excellent time-saver for administrators. You can do the bookkeeping alone if you have the skill but it is challenging in the long run and difficult to handle bookkeeping along with handling the other aspects of businesses like purchases, marketing, sale etc. So it always better to hire an Audit firm in UAE

Importance of bookkeeping

A business must keep track of the profit they are making and spending. Without documenting this information, it is impossible to understand and analyze how well a business is doing or whether it’s meeting its financial goals. Furthermore, an accountant needs this data so as to make complete financial statements also to prepare for the taxation. Bookkeeping and accounting are two functions that are inevitable for any business, both small and large for profitable long run of business