The Department of Economic Development estimated that in 2015 alone Dubai was home to more than 22,000 small businesses. * The allure of being your own boss, making your own hours and building a business from scratch is a dream that shines brightly.
It’s clear that an entrepreneurial spirit shines bright in the city-state. From technological innovation to food service and everything in between, small businesses are the backbone of the UAE economy accounting for 95% of the total business composition. *
Building a business takes diligence and determination, persistence and people skills – not to mention a product or service that embodies a unique value proposition. It’s also highly rewarding and challenging.
One of the more notable challenges small business owners face is the diverse range of duties they must manage, especially finance. Here are our top tips to managing your businesses’ finances. As you read through each imagine how a receipt scanning API app could streamline processes and make your life so much easier.
Understand Your Financial Responsibilities
The UAE Federal Government does not impose corporation tax on SME’s in Dubai. Indeed, the ruling family of Dubai, headed by Sheikh Mohammed bin Rashid Al Maktoum has indicated that they do not ever intend to enforce taxation on residents.
However, if you’re earning an income in Dubai, but are a tax resident of another country you may be liable to declare your income and pay income tax. To be considered a tax resident of Dubai (United Arab Emirates) you must be able to prove that:
- All company shares are beneficially owned by residents of the UAE and
- All or a substantial percentage of your company’s income is derived from active conduct of a trade within the UAE (not applicable to investment businesses)
However, the UAE is home to several free trade zones where foreign shareholding of companies is permitted. Dubai is the most popular free trade zone.
In addition to the obvious taxation responsibilities small businesses must be aware of, it’s important that you keep accurate financial accounts of the day-to-day operations of your business. This includes monitoring transactions, wage payments, managing supplier invoices, and additional elements of budgeting.
Recording and storing OCR receipts within a receipt scanning app, such as Tabscanner, can be invaluable in effectively managing the finances of a small business. With lightning fast OCR, seamless integration and the most accurate receipt scanning API available, you can always stay on top of your expenditure.
Schedule All Accounting
This may sound obvious, but it’s paramount for SME’s to constantly be aware of their financial circumstances. Financial management control should be exerted.
SME accounting that isn’t done properly managed will lead to mistakes. The more common mistakes small businesses make include, not being meticulous with your bookkeeping, forgetting to record small transactions and not budgeting correctly.
Fortunately, these potential pitfalls can be easily rectified by scheduling all accounting. Devote a specific time to review your accounts. This can be weekly, monthly – whatever works for you. Record all transactions, file all invoices and save all documentation. This will create a clear picture of your finances.
One of the easiest ways to keep track of your expenditure is to use a receipt scanning API app. Not only does that app create an accurate assessment of your finances at any given time, but it makes managing expenditure and compiling reports easy.
Use Accountancy Software – Like Tabscanner
You don’t need to have a degree in accountancy – or employ costly accountancy services to keep control of your finances. Many small businesses with tight budgets are turning to Tabscanner, Quickbooks or Xero to help them with their accountancy processes.
The benefit to accountancy software is simple – it can do all the hard work for you. This can include scanning an OCR check and recording the relevant information meticulously, uploading information to the Cloud, scheduling reminders, and accurately recording your retained profit, income and expenditure.
Perfect for SME’s and start-up businesses who don’t want the added expense of paying for expensive accountancy services, or who need a platform a little more advanced than a basic Excel spreadsheet, accountancy software, like Tabscanner, is surely a must-have.
Sources:
https://www.thenational.ae/business/more-than-22-000-smes-started-in-dubai-in-2015-1.150039
https://vz.ae/2017/05/31/behind-headlines-dubais-booming-economy-means-business/