Month: April 2023
Monthly Tax insights and updates – March 2023
April 12, 2023
The month of March saw many regulation changes that businesses need to be aware of. From the news on GCC regions to updates in compliance regulations, HLB HAMT’s tax and compliance experts have got you covered.
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Benefits of Outsourcing Accounting Services for Your Business in UAE
Vimal Kutty
Phone:- +971 4 327 7775
Mobile:- +971 56 147 0259
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
The landscape of finance and accounting has undergone significant changes in recent years due to the adoption of technology, globalization, and evolving regulations. As a result, traditional roles of finance and accounting professionals have shifted, and new skills and knowledge are required to succeed in the dynamic business environment of today.
- Technology Adoption – The widespread adoption of technology has automated many repetitive tasks and enabled finance professionals to focus on strategic tasks such as data analysis, risk management, and business planning.
- Globalization – Another significant trend is the globalization of finance and accounting, which requires a deep understanding of local regulations, tax laws, cultural differences, and seamless collaboration with colleagues from different countries and time zones.
- Regulatory Compliance – Regulatory compliance is also crucial, and finance and accounting professionals must navigate a complex web of regulations, including the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Benefits of Outsourcing Accounting Services
Companies can choose to outsource all or part of their accounting tasks, depending on their needs and budget. Outsourcing accounting services in UAE provides several benefits, including cost savings, improved accuracy and consistency, access to the latest accounting software and technology, and more time and resources to focus on core business activities. Outsourcing accounting tasks and responsibilities to reputable firms like HLB HAMT can offer numerous benefits for businesses operating in the UAE.
- Cost SavingsOutsourcing accounting services can significantly reduce costs associated with hiring and training full-time employees, providing employee benefits and maintaining office space and equipment.
- Increased EfficiencyProfessional accounting firms have specialized expertise and software to streamline processes and reduce errors, resulting in increased efficiency and accuracy.
- Access to ExpertiseOutsourcing accounting allows businesses to access the expertise of professionals who have experience dealing with complex accounting issues and can provide valuable insights.
- ScalabilityOutsourced accounting services can be scaled up or down as per the business requirements.
- Focus on Core ActivitiesBy outsourcing accounting functions, businesses can free up valuable time and resources to focus on core activities that drive growth and profitability.
- Improved ComplianceProfessional accounting firms ensure compliance with all regulatory requirements and help businesses stay up to date with changes in tax laws and regulations.
Conclusion
Finance and accounting workers must adapt and pick up new skills and information if they want to succeed in this dynamic climate. Accounting service outsourcing is an excellent strategy that can assist companies in lowering costs, improving productivity, gaining access to specialized knowledge, scaling their operations, and concentrating on their core competencies. Businesses can make sure their financial management procedures are successful, efficient, and in compliance with regional laws and regulations by working with reputable accounting companies like HLB HAMT.
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How Analytics in the finance and accounting industry assist small and medium-sized businesses?
Sumesh Krishna, Partner
Phone:- +971 4 327 7775
Mobile:- +971 50 749 0576
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
Accounting and financial professionals have long used analytics in their work. Since the 1980s, several financial teams have utilized data to report on trends and past performance. Today’s organizations must utilize data to make informed decisions, enhance efficiency, save costs, and reduce risk. Analytics add significant value and aid in solving business challenges, playing a critical part in corporate success.
Analytics in finance and accountancy
- Organizations increasingly rely on more predictive and prescriptive analytics to look ahead across various measures. Finance and accounting professionals must understand this and guarantee that they have the relevant skills.
- Finance and accounting analytics can be used in risk management, fraud detection, financial forecasting, budgeting, and performance monitoring.
- Data analytics, for example, may assist banks and financial organizations in identifying possible credit risks and predict the possibility of default based on previous financial data.
- Financial statement irregularities that point to fraud or mistakes get identified using analytics. Data analysis tools may also assist accountants in recognizing trends in economic performance and improving resource allocation and budgeting decisions.
Overall, analytics in accounting and finance may give firms valuable information and help them make data-driven decisions to reach their financial objectives.
Analytics in finance and accountancy for small and medium-sized businesses
Accessing your company’s financial health and maintaining competitiveness depends on having up-to-date, accurate financial records and reports. To enhance a company’s business performance, you need to relay financial analytics, which offers both high- and granular-level views of its financial data.
- Predictive, data-driven insights support your team throughout the process by comprehending and analyzing previous performances, forecasting future performance strategies, and outlining actions to follow to make better-assured decisions.
- The most potent Cloud-based analytics solutions available to large organizations are now available to SMEs. This includes Microsoft Power BI for complex modelling, as well as machine learning using Azure Cloud services and the Salesforce and Tableau analytics platform. It has become increasingly essential for SMBs to respond as SMEs experiment with technology, become data literate, and even develop SME analytics solutions better suited to small businesses than commercial enterprise analytics. At COVID-19, SMBs no longer had to impress members of the practice or clients with the value of analytics in information generation.
- While the pandemic accelerated the use of analytics by SMBs for SMEs, they also acquired an appreciation of analytics in finance.
Things/Suggestions that support SMEs and help them gain familiarity with analytics
- Ensure you have a strong chart of accounts with few clear expense lines and different jobs within accounting tools such as Xero, MYOB, or QuickBooks, and utilize an appropriate tool for each project.
- The next step is to extract the transactions and data from the accounts. Data Dear assists with the extraction of data into Excel and report generation utilizing pivot tables for quick analysis.
- With knowledge of the accounting data, cash flow forecasting and scenario planning are possible with Float, which delivers an automatic two-year forecast and scenarios based on the present cash flow status. The Scenarios may include the loss of a significant client, late payments, or new hiring.
- The utilization of financial prediction software “Futrli’s Predict”. This software functions like a GPS, which automatically pulls all financial data from the Cloud accounting system and delivers a precise cash flow forecast (e.g., the future business position inclusive of cash, sales, expenditure, profit, and tax).
Role Of Analytics in Finance and Accountancy
Financial Forecasting and Planning:
Small and medium-sized businesses (SMBs) may utilize analytics tools to estimate future income and spending, create financial strategies, and find cost-cutting possibilities.
Cash Flow Management:
SMBs may better manage their cash flow and ensure they always have adequate cash by reviewing cash flow statements and utilizing predictive analytics.
Risk Management:
Small and medium-sized businesses (SMBs) may utilize analytics to detect and manage financial issues such as credit and market risks.
Budgeting and Performance Analysis:
Small and medium-sized businesses (SMBs) can employ data analytics to evaluate actual financial performance to budgeted expectations. This can allow them to identify areas for improvement and make more intelligent budgeting decisions in the future.
Bookkeeping Automation:
By automating regular accounting operations, SMBs, and practices may spend less time on manual bookkeeping and more time on higher-value activities (Purchase and procurement data entries, bank reconciliations, etc.).
Fraud Detection and Prevention:
By intensely analyzing financial data, practices may spot possible fraud and implement measures to prevent it.
Audit Analytics:
Data analytics do better and more effective audits, detect risks and errors, and assure compliance.
Compliance Risk Management:
Using analytics to identify areas where the firm may be non-compliant and provide ways to implement remedial measures can assist in reducing the risk of non-compliance.
Wrapping up
As organizations increasingly focus on the 3Ps (people, profit, and purpose) in creating their strategy, assessing various performance targets become critical. The broader predictive and prescriptive analytics to look forward across this more significant range of metrics is becoming increasingly important for organizations. Finance and accounting professionals must understand this and ensure they have the necessary skills.
- We must recognize that the data we need to operate with comes from several sources. It might be structured or unstructured data like video, audio, text, or email. Any information that helps us analyze organizational performance and customer behaviour. Financial professionals must take an active part in data governance and data accuracy.
- Machine learning algorithms applied to data sources can provide insights into the future. Yet, we must ensure that; we can comprehend the narrative presented.
In short, by harnessing data to deliver necessary insights, analytics may help SMBs and practices in finance and accounting become more efficient, make better-informed decisions, and reduce risk. SMBs can obtain a competitive advantage and boost their bottom line by implementing data analytics approaches.
HLB HAMT to Assist!
With numerous changes in rules and technologies, the auditing sector is undergoing rapid transformation. HLB HAMT seeks and provides high-quality audit and advisory services, with technology at the core of its operations, such as Data Analytics, RPA, and Business intelligence dashboards. Our service focuses on the customer’s risk aspects, and we work as a team with our employees and the client to provide quality services at a low cost.
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Emiratisation Law in UAE
HLB UAE Payroll Team
Phone:- +971 4 327 7775
Mobile:- +971 55 971 5959
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
Throughout the last decade, the United Arab Emirates (UAE) has made efforts to boost the proportion of Emirati people working in the nation’s workforce. The goal of the government-led Emiratisation effort is to provide possibilities for Emirati citizens to contribute to the economy. The strategy makes use of a number of rewards, subsidies, and penalties to accomplish this. Businesses who hire Emiratis will get subsidies, while those that do not adhere to the Emiratisation plan will pay fines.
The New Emiratisation Standards in UAE
In the United Arab Emirates (UAE), a new Emiratisation plan has been implemented to address the employment gap between Emirati and foreign workers. All employers who fall within the purview of the Ministry of Human Resources and Emiratization are subject to the new Emiratisation criteria.
Businesses outside of free zones with 50 skilled employees or more are required to have a minimum of 2 percent of their workforce in the country must be Emiratis by January 2023. After every year till 2026, the target percentage increases by 2%, requiring that 4 percent of the workforce consist of Emiratis by 2024. In 2025, the target percentage increases to 6 percent, in 2026 to 8 percent, and by 2027 January , the required percentage of Emiratis at companies is 10 percent.
To break it down further, for establishments with 50 skilled workers, only one national employee is required. For those with 51 to 100 skilled workers, two national employees are required. For establishments with 101 to 150 skilled workers, the minimum target for recruitment of national employees increases to three. Finally, for establishments with 151 workers or more, one national employee is required for every 50 workers or less.
What is the Impact on Emiratisation in UAE businesses?
Companies that fall under the jurisdiction of Ministry of Human Resources & Emiratization (MOHRE) have to compulsorily follow the new Emiratisation laws. At least 2% of a private company’s workforce are to be Emirati, on the provision that they have at least 50 members of staff on their payroll.
What are the penalties for not following the 2% Emiratisation law?
Starting January 1, 2023, companies who fail to comply with the Emiratisation targets will have to pay hefty fines as stated below:
- A fine of Dh6,000 per month for each UAE national who is not employed.
- A minimum fine of Dh20,000 and a maximum fine of Dh100,000 may be applicable, if:
- After acquiring a work permit, a company does not hire a UAE national but still receives support from Nafis.
- Employees benefitting from this program exhibit a lack of dedication to their jobs, and if the company neglects to inform Nafis.
- Employees benefitting from the programme fails to come to work and the company fails to notify this to Nafis.
- If the company terminates an employee’s benefits without providing a legitimate explanation and without notifying Nafis.
- If the company refuses to hire a UAE national after they complete their training, without providing a legitimate explanation.
Does Emiratisation applicable to Free zone?
Emiratisation law applies to main land companies across UAE. Therefore companies based in free zones are exempted from Emiratisation rules.
What does ‘skilled workers’ mean in Emiratisation program?
Skilled workers’ as an employee who fulfils any of the following qualifications:
- To have a certificate higher than the secondary or equivalent to secondary;
- To have a worker certificate that has to be attested by a competent authority;
- To have a salary which is no less than AED 4,000 per month;
- To be under one of the following categories:
- Legislators, business executives and managers;
- Writing professionals.
- Professionals in technical, scientific, and human fields.
- Technicians in technical, scientific, and humanitarian fields.
- Service and sales occupations.
How companies will be monitored in Emiratisation program for compliance?
As per MoHRE guideline the requirements are:
- UAE national must possess a valid work permit.
- Salaries shall be paid through the Wages Protection System
- Must be registered with one of the approved pension funds in the country.
- The relationship between the Emirati and the establishment shall be a contractual one.
How HLB HAMT can help with Emiratisation to Promote EOR Services?
Talent acquisition is a critical component of the Emiratisation initiative. Companies that are successful in attracting and retaining Emirati talent will be more likely to meet their Emiratisation targets and avoid the new fines. However, there are challenges in recruiting and retaining Emirati talent, including a lack of qualified candidates and competition from other employers.
Businesses must collaborate with universities and fund training and development initiatives in order to address these challenges. The creation of a varied and friendly workplace is another essential component in luring Emirati employees. Employers who provide flexible work hours, chances for professional growth, and competitive pay packages are more likely to attract Emirati job seekers.
Conclusion
Emiratization presents both challenges and opportunities for employers in the UAE. The new Emiratisation plan is a significant step towards addressing the employment gap between Emirati and foreign workers in the UAE. While it may pose challenges for some companies, it is an opportunity for others to diversify their workforce and promote a more inclusive and equitable work environment. Companies that prioritize Emiratisation and invest in their employees’ development will not only comply with the Emiratisation plan but also position themselves for long-term growth and success.
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MoF Issues New Ministerial Decision to Streamline Tax Residency Certificates
Lavin Nalinababu
Phone:- +971 4 327 7775
Mobile:- +971 55 160 1291
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
The enforcement of certain provisions of Cabinet Decision No. 85 of 2022 on the determination of tax residency has been announced in Ministerial Decision No. 27 of 2023 by the Ministry of Finance (MoF). On March 1, 2023, this decision was published in the Official Gazette and entered into force.
The Ministerial Decision aims to clarify and offer direction on the application of the Cabinet Decision, which was released last year, regarding the policies and processes for establishing tax residency status for both individuals and companies in the UAE.
The Federal Tax Authority’s website can now be used to instantly issue a UAE tax residency certificate, making the procedure quicker and more convenient for filers.
The Decision further states that when deciding whether the 183-day or 90-day thresholds have been reached, all days or parts of days on which a person is physically present in the UAE will be taken into account. Additionally, the Decision states that a person need not own their “permanent place of residence,” but such place must be continuously available to them.
The decision additionally defines the standards and prerequisites that individuals and companies must satisfy in order to receive the tax residency licence. The prerequisites include having a legal residency permit, staying in the UAE for a predetermined number of days, and meeting any additional requirements outlined in the Cabinet Decision.
The new Ministerial Decision from the MoF is an important step towards improving and harmonising the UAE’s tax residency system with global norms. For individuals and businesses working in the UAE, it offers the clarity and openness necessary to determine tax residency.
HLB HAMT can assist individuals and businesses in complying with the regulations as well as applying for a tax residency certificate as outlined in Ministerial Decision No. 27 of 2023.
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How to keep your business on track: The Ultimate Accounting Checklists
Vimal Kutty
Phone:- +971 4 327 7775
Mobile:- +971 56 147 0259
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
Do you struggle to keep up with your accounting responsibilities as a business owner? At the conclusion of each month, do you find yourself buried under a pile of receipts and financial data?
If so, the answer you have been searching for is to create a schedule for your accounting duties. You can make sure that your financial documents are correct, current, and reliable by adhering to a regular routine. This can avoid costly errors, minimize negative effects on your company, and promote business expansion. In this blog post, we’ll outline the essential accounting tasks that you should perform on a daily, weekly, and monthly basis.
A. Tasks for Daily Accounting
Adjust the Cash and Receipts
Reconcile currency and receipts at the conclusion of each day to swiftly identify cash shortages. You can track down where the money went and spot mistakes or fraud using this method.
Analyze and reconcile the transactions
Your bank connection and your accounting software should sync on a daily basis. You won’t need to wait for your weekly bank account because of this. Spend some time each day on this task to review and approve the recommended matches to eliminate a grueling month-end chore.
Update and Refresh Your Financial Information
It’s necessary to daily sync your accounting software with your bank and credit card data, as well as your POS system, to have an up-to-date view of your accounts. This process makes it easier to spot discrepancies with recent transactions.
Record and classify your expenses
There are also applications for many accounting software packages that let you record expenditures and share receipts. Just snap a photo of the ticket and make a note of the information rather than going through a stack of receipts at the end of the month.
Received a record of inventory
By entering inventory into your system the same day you receive it, you maintain your system up to date and can see your supply more accurately. Daily inventory management also lowers the risk of product maturity and loss. It plays a critical role in checks and balances.
B. Tasks for Weekly Accounting
Payments of a Record
To maintain a healthy financial flow and up-to-date documents, deposit paper checks and currency payments once a week. Check to see if your bank takes mobile deposits if the majority of your accounts due are electronic payments.
Invoice Your Customers
Regular billing encourages timely payment from your customers. Your customer will take longer to pay you the longer you delay to bill them.
Review time records for employees
Review timesheets regularly at least once per week to help you identify inconsistencies and actions that might be detrimental to your business.
C. Tasks for Monthly Accounting
Pay vendors, or organize for the payment of bills
Check invoices for errors, and plan payments early to benefit from discounts for doing so. Make payment reminders if necessary to settle your expenses on time and prevent late fees.
Monitor spending and deviations
Budgeting for different costs, activities, and tasks is simple to do, but maintaining these budgets can be challenging. Checking for such issues each month and taking remedial action is the best method to lower budget variances.
Maintaining schedules for accurate financial tracking
It is important to maintain schedules for tracking and amortization of expenses, depreciation, etc., which can help you keep your accounting records up to date and reduce errors. This process will also help you identify any trends or issues that may arise in your financial reports.
Protect Your Data
Create a physical backup of your financial information if you don’t use cloud-based accounting software at least once per month. This will offer you confidence even in the unlikely circumstance of a hardware malfunction.
Bottom Line
For any business to be successful, precise accounting records must be kept. You can make sure that your funds stay in order and on schedule by adhering to this accounting check list. Keep in mind that you must perform these duties regularly to prevent inconsistencies or mistakes in your financial records. By using adequate accounting procedures, you can assess the financial health of your company with assurance and make the required corrections to facilitate business expansion.
HLB HAMT to Assist!
If you’re in need of financial assistance or guidance, HLB HAMT is here to help! With a team of experienced professionals, HLB HAMT can provide you with personalized financial solutions tailored to your specific needs.
Get in touch with us right away to schedule a consultation and take the first step towards a more secure financial future.
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The Top Four Components of Predictive Practice: A Comprehensive Guide for Businesses
Sumesh Krishna, Partner
Phone:- +971 4 327 7775
Mobile:- +971 50 749 0576
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
In today’s fast-paced and constantly evolving business environment, it’s more important to anticipate and prepare for future scenarios. A crucial tool in accounting and finance, the predictive practice uses several methods to examine historical data and generate precise forecasts about future events.
In this article, we will discuss the importance of predictive practice and its multiple components, which could assist firms in taking preventative action and succeeding.
Importance of Predictive Practice
The emergence of the predictive practice is guided by four fundamental components that assist in reshaping current accounting tasks for an online environment:
- Proactive Behavior: Businesses must be proactive in their financial planning and decision-making to use predictive practices. Organizations can lower risk and improve efficiency by foreseeing patterns and occurrences in the future.
- Predictive Models: To forecast sales, costs, and profits, predictive models are statistical methods that are often used in accounting and finance.
- Employing big data: Big data is the term for the enormous data volumes produced by consumers and corporations. Big data is used in predictive practice to find patterns and trends that can guide business-related decision-making.
- Professional Services Online: Businesses can obtain expert advice, gain real-time insights into their financial performance, and make choices based on correct data through online professional services.
Proactive Behaviour
Proactive behaviour can be described as taking charge of a situation by anticipating problems in the future and taking steps to prevent them. Being proactive is essential in predictive practice since it aids in recognizing possible hazards and possibilities in accounting and finance.
Financial professionals may use predictive models and Big data analysis to study historical data and create precise forecasts about future trends, situations, and events that potentially affect the financial conditions of their customers. Proactive behaviour can assist customers in capitalizing on opportunities and reducing risks.
Some proactive advice that financial professionals can offer to their clients includes creating backup plans for potential risks, like economic crises, creating strategies to lessen risks associated with a particular investment, diversifying investment portfolios, and providing advice on maximizing financial performance by discovering cost-saving opportunities. In conclusion, proactive behaviour is vital for predictive practice in accounting and finance.
Predictive Models
Through analyzing past data and discovering patterns and trends, predictive models are practical tools that enable companies to foresee likely future occurrences and take appropriate action. They support proactive behaviour in the predictive practice by making it possible to evaluate vast volumes of data and derive insightful information that could assist with proactive decision-making.
Several software packages are available for managing extensive data and predictive analytics, including KNIME, Orange, NLTK, RapidMiner, R-programming, and Weka. With the assistance of these tools, users may create prediction models, conduct data mining and analysis and view the findings intuitively. Since many of these technologies are free and open source, businesses of all sizes can utilize them.
The capacity of companies to use the insights gained from these models and take proactive action to address probable future occurrences is critical to the success of predictive modelling in the predictive practice. Organizations can more effectively prepare for and react to potential problems and opportunities, eventually fostering growth and achievement.
Employing Big Data
In the current financial situation, the capacity to manage and analyze vast amounts of data, often known as big data, is becoming increasingly crucial. Effective use of this data by businesses may frequently lead to a competitive edge in the market. Therefore, professionals in finance and accounting need to become proficient in the methods and tools required for using big data and analytics.
Google and Google Trends are tools that can be especially helpful in assessing the potential for new clients in new areas. By examining Google search data, finance and accounting experts may see trends and patterns in customer behaviour. Non-financial Information (NFI) is another helpful resource for trend forecasting. The NFI might contain information about customer satisfaction, internet traffic, and social media involvement.
Various technologies like Similar Web and Alexa are accessible for competitive intelligence. Professionals in finance and accounting can use these tools to research search terms, upstream websites, and traffic sources. Choosing the appropriate course of action based on the insights discovered is the key to adequately leveraging big data and analytics.
Professional Online Services
Increased companies are choosing to provide their services online in the digital era. The same is valid for experts in finance and accounting who use online platforms to deliver proactive work to their clients. One of the key benefits of offering professional services online is the capacity for aggressive work delivery. Finance and accounting professionals can remain ahead of the curve and provide their clients with predicted insights and solutions thanks to access to a multitude of data and analytics technologies.
Online tools also make it possible for customers of finance and accounting professionals to collaborate and communicate with one another in real-time. This may increase openness, promote confidence, and improve the customer experience. Cost-effectiveness is a significant advantage of offering professional services online. Finance and accounting professionals may lower overhead expenses by eliminating the requirement for brick-and-mortar offices and in-person meetings.
Bottom Line
It is impossible to understate the value of predictive practice in the accounting and finance industry. In today’s modern workplace, companies can gain a competitive edge by being proactive, utilizing predictive models, leveraging the power of big data, and providing online professional services. Finance and accounting professionals must master the techniques and instruments to implement predictive practice using big data and analytics. Businesses can be a step ahead of their peers and reach their financial objectives by utilizing these resources.
HLB HAMT to Assist!
With the assistance of HLB HAMT, organizations can implement the top four components of predictive practice covered in this blog. With its experience in finance and accounting, HLB HAMT can aid in developing predictive models and employing big data analytics to provide precise projections and discover patterns that help direct business-related decision-making.
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