Maintenance of relevant records, supporting documents, and books of accounts is extremely crucial requirement for proper control and management of the business operations. Aiding in providing correct record of payment of cash and authentic receipt of other transactions done by the company, preservation of books is required for many purposes. It is mandatory by the VAT law and UAE company law, to maintain the accounting records. Hence maintenance of book of accounts in Dubai and all over the UAE is compulsory.
According to article 26 of Federal Law No. (2) of 2015 Commercial Companies in the UAE:
Companies should maintain accounting records properly stating all the transactions and also disclose their accurate position financially when required. Te share holders or partners should verify that the accounts statements and books are kept in accordance to provision of this law.
Each company shall maintain steadily its accounting records for an interval of at least 5 (five) years from the end of the financial specific yr of the business.
The business may maintain a soft or digital copy of the initial of the documents and data kept and transferred therein relative to the controls given by way of a Ministerial Decision.
UAE VAT Regulation (Draft Law clarification).
It is obligatory for each and every taxable person to keep up catalogs of accounts under UAE VAT legislations. Moreover the expert can require additional documents such as, twelve-monthly accounts, basic ledger, purchase day publication, invoices released, invoices received, credit records, debit records, VAT Ledger etc.
According to UAE VAT rules the accounting books and details should be retained for five years.
Companies require correct and real – time financial information for decision-making and performance monitoring. Also under UAE Government Laws NO. (2)OF 2015 companies shall maintain their financial statements and accounting files showing the orderly transactions. Fines for failing to adhere to regulations are the following
Inability to keep Accounting Information (Article 348) – At least AED 50,000 fine should be submitted. However, not more than AED 500,000 shall be enforced on the business;
Failing to keep Accounting Details for 5 years – At least AED 20,000 fine should be submitted. However, not more than AED 100,000 will be imposed.
Every business must do accounting to learn about the results and success of the enterprise and manage the flow of cash. Organizations retain the services of accountants for this function and manage them through the span of their workings. Bookkeeping is the first step in financial reporting and accounting.
A bookkeeper write downs day-to-day orders in accounting softwares or ledgers. He will not prepare financial claims but submitting of transactions can easily influence all G/L accounts that is certainly how chart of accounts impacts the financial claims and statements. Therefore, it is vital to truly have a bookkeeper that can post accounting deals timely and effectively.
It will help in
- Recording of Accruals
- Ledgers, credit cards, and bank reconciliation
- Bookkeeping of receivable and payable accounts
- Maintenance of cash books, fixed asset register, and sales and purchase ledger