In any business endeavor, improving operational efficiency and cutting expenses is a top priority, and a common way to achieve this is through outsourcing. For those who are unfamiliar with this term, outsourcing is the practice of hiring a third party to handle specific tasks within your business operations. In a competitive business environment such as the UAE, outsourcing has become a widely adopted trend for the numerous benefits that it offers. One of the business functions that can be outsourced is accounting. As with any outsourcing initiative, outsourcing your accounting too has multiple benefits. Let’s delve into the reasons why you as a business owner must outsource your accounting functions in the UAE.
The Changing Tax Landscape of the UAE
Over The past few years, the UAE’s tax regime has seen massive changes. While 2018 marked the introduction of VAT, 2022 saw the announcement of Corporate Tax. Moreover, these tax laws and regulations have been constantly revised, making it tricky for businesses to stay attuned to the latest developments. For example, several changes were announced in 2023 regarding the applicability of Corporate Tax for free zone businesses.
In such an evolving tax environment, it is necessary to have specialized tax and accounting expertise by your side. By outsourcing your tax accounting functions, you can avail services of professionals who are up-to-date with the UAE’s tax regulations and are well-versed with the best tax practices to ensure your compliance.
Cost Saving
Hiring full-time professionals comes at a cost. Along with the salary, costs associated with the employee’s residency visa, health insurance, and an annual air ticket to the home country must be borne by UAE companies. When you outsource your accounting, you are spared the costs that come with recruiting and training accounting professionals. Instead of hiring a full-time team who are on your payroll, you now have a dedicated workforce to assist you as and when required. Likely, your accounting service provider will offer flexible packages, meaning you will only pay for the specific services you request, and for the duration that you avail them for. Besides the expenses related to hiring staff, you also save on the expensive software and other resources that you’d purchase for managing these functions in-house.
Avoid Penalties
Take a moment to consider these fines related to Corporate Tax: AED 10,000 for late registration, and AED 20,000 for not facilitating the tax auditor during an audit. In addition to these, there are several other penalties linked to taxes like VAT and for non-maintenance of accounting records. So, why risk these fines when you can easily have your accounting needs taken care of by a specialized firm?
It is understandable that for a business whose core functions are not accounting, issues with regard to timely tax filing and maintaining accuracy are bound to arise. When you have an accounting service provider dedicated to handling your accounting needs, you can rest assured knowing that your tax registration will be completed on time, your accounting books will be maintained accurately, and your returns will be filed on time.
Access to Expertise
As a business where accounting is a non-central function, entrusting it to a specialized firm will guarantee you the expertise and efficiency you need. Accounting and bookkeeping service providers in the UAE have specialized expertise and technology to streamline processes and reduce the frequency of errors. Availing services of highly-trained experts will make sure you stay on top of your accounting and tax obligations in the UAE. Also, by doing so, you are relieving your staff from the complicated accounting duties.
Accountants at firms such as InZone are well familiar with the ins and outs of the UAE’s IFRS accounting standards as well as the laws for VAT and Corporate Tax. While complying with the UAE’s accounting and tax laws is no doubt necessary, the growth and financial performance of your business are equally important. This gives another compelling reason to leave your accounting burden to some expert on the outside. An expert accounting team at the helm of your accounting affairs will provide you with accurate forecasts and projections to track and evaluate the financial health of your business.
Focus on Core Business
In a competitive business environment like the UAE’s, you cannot afford to take your eyes off your core business functions. Having all the operational functions housed together will result in your focus and effort being spread over numerous things. As accounting in itself is a huge domain, things can get overwhelming and will demand significant attention from you and your staff.
When you outsource your accounting, you can rest assured knowing that qualified experts are handling the complex functions to help you stay compliant with the UAE FTA’s regulations. You can take comfort in the knowledge that these important duties are performed by industry experts to keep your business running. This way, you can concentrate your effort on aspects like improving your offerings and growing your business.
InZone offers a comprehensive suite of accounting services related to Corporate Tax, VAT, and auditing. Reach out to us today and stay on top of your accounting requirements in the UAE.
