Running a small or medium-sized enterprise (SME) in the UAE can be an exciting and challenging endeavour. While SMEs play a crucial role in the country’s economy, they often face a unique set of financial challenges. One of the most significant hurdles is managing accounting and bookkeeping tasks while keeping up with the country’s legal and regulatory requirements. SMEs cannot afford to ignore the importance of financial record-keeping, as it can impact their growth and success in the long run. In this blog, we will explore the top 5 reasons why SMEs in the UAE should consider outsourcing their accounting services to expert professionals, helping them streamline their financial management and focus on their main business operations.

Businesses and Accounting in the UAE

The UAE’s favourable legal conditions, tax exemptions, abundant manpower, and flourishing economy have made it an attractive global investment hub, and business owners in the UAE will easily comprehend why. When it comes to a business’s structure, accounting is an essential department where cutting corners is not an option. In the UAE, renewing a business license requires high transparency and accuracy in financial records, which can be achieved by following UAE laws and maintaining up-to-date accounting records.

Small and medium-sized enterprises (SMEs) cannot afford to keep in-house accountants like larger corporations. To stay compliant while saving money, one of the simplest and most cost-effective solutions is to outsource accounting and bookkeeping services.

Reasons For SMEs to Outsource Accounting Services in the UAE

As an SME owner in the UAE, managing finances can be a daunting task, especially given the constantly evolving legal and regulatory environment. Accounting is an essential function of any business, and the accuracy and transparency of financial records are crucial for regulatory compliance and decision-making. As a result, SMEs need to have an efficient and effective accounting system in place. Outsourcing accounting services can offer several benefits to SMEs.

• • Ensure Tax Compliance

As an SME in the UAE, it’s essential to comply with tax laws to avoid hefty penalties. However, tax regulations are constantly changing, and it can be challenging to stay up-to-date. Outsourcing accounting services can help SMEs stay compliant with tax laws and avoid costly mistakes. With experts handling accounting tasks, SMEs can ensure accurate record-keeping, timely tax filings, and compliance with VAT and other tax regulations.

• • Plan for Business Growth

SMEs need to have a roadmap for business growth to remain competitive in the UAE market. Accounting plays a vital role in creating such a plan. By outsourcing accounting services, SMEs can get an accurate and complete financial picture of their business, including metrics such as costs, margins, and growth goals. With this information, SMEs can create a plan that outlines how to allocate resources, expand operations, and achieve growth targets.

• • Stay on Top of Credits and Debts

Managing cash flow is a crucial part of running any SME. Keeping track of expenses, payments, receipts, and incomes is essential to staying on top of credits and debts. With outsourcing accounting services, SMEs can maintain accurate and up-to-date accounts, helping them to gain a better understanding of their financial position. This information can be used to make informed decisions about investments, cash reserves, and other financial matters.

• • Attract Investors and Buyers

SMEs looking to attract investors or sell their business need to have accurate and transparent financial records. Outsourcing accounting services can help SMEs create a robust accounting system that can attract potential investors and buyers. By presenting clear and accurate financial information, SMEs can demonstrate their profitability and growth potential, increasing their chances of securing funding or selling their business at a higher value.

• • Maintain Regulatory Compliance

UAE regulations can be complex and ever-changing, making it challenging for SMEs to stay compliant with legal and regulatory requirements. By outsourcing accounting services, SMEs can ensure that their financial records adhere to UAE regulations, avoiding legal hassles or penalties. This can include complying with financial reporting requirements, adhering to accounting standards, and staying up-to-date with regulatory changes.

More Benefits of Outsourced Accounting

Businesses typically allocate a significant portion of their revenue, ranging from 1.5% to 3%, for managing their accounting departments. This cost can be a significant burden for small and medium-sized enterprises (SMEs). However, outsourcing accounting services in the UAE can help businesses save a considerable amount of money by providing access to a team of accounting experts at a fixed cost.

One of the most significant advantages of outsourcing accounting services is the reduced probability of errors and miscalculations. This is because outsourcing firms specialize in providing accounting services and have a team of trained professionals dedicated to ensuring accurate financial reporting.

In addition, outsourcing accounting services can help SMEs reduce their non-revenue-generating tasks by freeing up their manpower. This allows them to focus on core business activities that generate revenue and enhance their growth. Another benefit of outsourcing accounting services is that businesses do not have to purchase accounting software or invest in other infrastructure. The accounting firm will provide all the necessary tools and software, saving businesses money on equipment and software costs.

Overall, outsourcing accounting services in the UAE is a smart decision for SMEs looking to cut costs and streamline their accounting processes. With a team of experts handling their finances, businesses can focus on growing their business and achieving their goals.

Why Outsourcing is Better than In-house Accounting?

Below are some reasons why SMEs should consider outsourcing their accounting needs instead of relying on in-house specialists:

• In-house accounting is a task that requires a lot of time and effort, and it is prone to errors. Outsourcing allows businesses to access a team of experts who can handle their accounting needs with care and expertise, freeing up time for other important tasks.
• Compliance with tax laws is critical for businesses, and failure to comply can result in hefty penalties. Outsourcing accounting services ensures that the business remains compliant, as the accounting firm will have up-to-date knowledge of tax laws and regulations.
• The cost of hiring and training in-house accounting specialists can be significant for SMEs, as it requires both time and resources. Outsourcing accounting services is a cost-effective solution as businesses can get access to a team of experts at a pocket-friendly cost.

How to Easily Manage Accounting Tasks?

Managing accounting tasks can be a time-consuming process that takes away valuable resources that SMEs could allocate to other essential activities such as building customer relationships or maximizing profits. It is also easy to become exhausted from paperwork and filing, especially for small teams. By outsourcing accounting services, businesses can achieve better performance and allow entrepreneurs and owners to concentrate on core business needs.

HTIC Global provides complete accounting services with the assistance of qualified chartered accountants. Our customized solutions are tailored to meet your specific needs and budget, ensuring that you can focus on daily tasks and use your time and energy to propel the business forward. By outsourcing accounting services to HTIC Global, SMEs can benefit from our expertise and experience in providing high-quality accounting services, freeing up valuable time and resources.

Wrapping Up

SMEs in the UAE face unique financial challenges, and managing accounting and bookkeeping tasks while complying with legal and regulatory requirements is one of the most significant hurdles. Outsourcing accounting services is a cost-effective solution that provides several benefits to SMEs. These benefits include ensuring tax compliance, planning for business growth, staying on top of credits and debts, attracting investors and buyers, and maintaining regulatory compliance.

Outsourcing accounting services is also advantageous because it reduces the probability of errors and miscalculations, frees up manpower for revenue-generating tasks, and eliminates the need for businesses to purchase accounting software or invest in other infrastructure. Ultimately, outsourcing accounting services in the UAE is a smart decision for SMEs looking to cut costs and streamline their accounting processes. By doing so, SMEs can focus on growing their business and achieving their goals.