Be it the UAE or any other part of the world, perhaps year-end is the busiest time for businesses in UAE. With heavier traffic and sales, tons of payroll tasks, and so many other accounting-related to-dos, businesses have too much on their plate during the last couple of months of the year. If you’re like most business owners, you’re probably juggling end-of-year accounting procedures as well. We are sure you are one of those smart and organized business persons who prepare a year-end accounting checklist to wrap up their year so they don’t have to scramble in the end. Certainly, this helps you accomplish your year-end processes without a hitch while saving you from missing out on something important but do you think you can bite off more than you can chew?! And top of it all, do you have a dedicated financial team that is skilled enough to handle the year-end accounting of your business? If your answers are “NO” then this is the right time to get in touch with one of the best audit and accounting firms in Dubai, UAE – Adam Global and leave all your year-end accounting worries to the experts in the field. Because year-end closing is a very crucial and complicated activity for a company and you know the consequences of wrong or inadequate entries in the system. Even a tiny error or mistake in the preparation of accounting year-end procedures can cost huge to the organization. Also, it can affect the accuracy of the company’s financial statements which eventually can invite a penalty from the law.
Financial year in UAE
The accounting period is fiscal or financial year-end which simply means the completion of any one-year or 12-month accounting period other than a general calendar year of an accounting period is what we know as year-end. The accounting period is not necessarily the calendar year worldwide. For instance, in India fiscal or financial year is the time period from 1st April to 31st March. In UAE, the financial year begins from January 1st and ends on December 31st. Usually, companies are required to present the report at the end of the year for its whole year business activities regardless of the country they are situated in. Before the accounting year ends the businesses are bound to close all their temporary accounts and carry forward the accounts that are permanent in nature for all good reasons. And one of them is to avoid any confusion and complications in the accounts to be generated in the subsequent year.
Year-End Accounting: Introduction
Year-end can creep up really quickly! But before the clock shows those four zeroes on December 31, you need to see whether your accounting books are showing the numbers correctly. To ensure your books of accounts are organized, up-to-date, and ready to move into a new year you have to square away several accounting tasks. This is what year-end accounting is. The name itself clarifies that year-end accounting is the accounting procedure done at the end of the year. The companies close their accounts for the respective financial year, carry forward the balances of the previous year, and open accounts for the next year. A flawless year-end accounting is paramount to ensure a smooth and successful shift to the new year. This is not something you can do in a rush. The best and easiest way to strike off the accounting to-dos of your year-end accounting checklist on or before time is to appoint an external year-end accounting specialist in UAE. During year-end, you’ll prepare your accounts and financial records for review. These include, but are not limited to:
- Balance Sheet
- Profit/Loss Statement
- Director’s Report
- Auditor’s Report (if required)
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Year-End Accounting: Objective
The year-end accounts closure process involves closing all of the temporary accounts for the current fiscal year. The permanent accounts continue as usual and remain open always. Practised at the end of the year, year-end closure of accounts in UAE is integral to businesses to determine business’s holding financially and operatively by closing out business from the previous year, carrying forward balances from the previous year, and opening posting accounts for the upcoming year. The purpose behind the year-end closure of accounts is to generate a company’s financial statements. Being accountable to its shareholders and stakeholders, a company has to be transparent in its business activities and year-end closure of accounts allows them to present a fair and true picture of its current position in the market at the end of the term by generating financial statements from the going year. Also, a company is required to abide by the law of the land and pay various taxes which necessitate the filing of financial reports and documentation with government organizations. And it’s a year-end accounting process that helps companies produce such relevant reports.
Year-End Accounting: Importance
Year-end is a period of urgency and stress for most busy finance managers, business owners, and accounting professionals across the globe and we know the reason is – the tedious and complex procedures performed to close the accounts for the previous year. Let’s take a look at the various reasons why year-end accounting is so imperative to any organization:
The year-end accounting procedures facilitate the documentation of the financial activity of businesses for a fiscal year by providing inputs that are crucial to the preparation of financial reports.
To land smoothly into the next year with a perfect year-end account, allow Adam Global to navigate you through the complex procedures of year-end accounting in the UAE.
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