8 Ways To Maintain Company Accounts in Dubai, UAE

Maintain company account in Dubai: Get the best tips from the professional accounting and bookkeeping company in Dubai, UAE on the company account maintenance. This guide is to give a business owner like you to edge about the rules and regulation of the UAE government.

Maintain Company Accounts In Dubai

It is advised to start managing your company finances from the very beginning to avoid last minutes rush and delay on the filing. Star storm is here to guide you though the company accounting from small to large enterprises as well.

Here are the quick tips to stay ahead with the company accounting in Dubai.

How does a company in UAE maintain its accounts?

In the UAE (United Arab Emirates), companies are required to maintain their accounts in compliance with the regulations set forth by the UAE government as per the following laws:

• Federal Law No. 2 of 2015 on Commercial Companies and its amendments 
• Any relevant regulations issued by regulatory authorities such as the Ministry of Economy, the Securities and Commodities Authority (SCA), and the Dubai Financial Services Authority (DFSA) for companies operating in free zones

While maintaining your accounts in a company in the UAE, you should consider the following points in your mind:

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1. Companies are required to adhere to specific accounting standards based on regulations issued by the UAE government. The primary accounting standards applicable to companies in the UAE include:
   • International Financial Reporting Standards (IFRS): Companies incorporated in the UAE are generally required to prepare their financial statements in accordance with IFRS.
   • United Arab Emirates Generally Accepted Accounting Principles (UAE GAAP): In addition to IFRS, companies in the UAE may also use UAE GAAP for financial reporting, especially if they are not listed on stock exchanges or if their activities are not regulated by specific authorities.
   • Value Added Tax (VAT): VAT reporting involves maintaining accurate records of taxable transactions, calculating VAT liabilities, and filing periodic VAT returns with the Federal Tax Authority (FTA) in accordance with VAT regulations.
2. Preparing a chart of accounts (COA) for your company in the UAE involves designing a structured framework to categorize and organize financial transactions according to your business needs and reporting requirements. Follow these steps to create a customized chart of accounts for your company:
   • Understand your business operations such as revenue streams, expenses, assets, liabilities, and equity structure.
   • Determine the key financial categories that you need to track and report on in your financial statements. 
   • Choose a numbering scheme for your chart of accounts that aligns with your company’s organizational structure, reporting requirements, and preferences.
   • Customize account codes based on the numbering scheme you have selected and the specific needs of your business.
   • Clearly define account names and descriptions for each account to accurately reflect its purpose and contents.
   • Organize accounts hierarchically within each financial category to create a logical structure that reflects the relationships between different accounts.
   • Review the draft chart of accounts to ensure completeness, accuracy, and relevance to your business needs.
   • Document the finalized chart of accounts in a comprehensive COA document or manual that provides guidance on its use, maintenance, and interpretation.
   • Implement the chart of accounts in your accounting system or software, ensuring that it is configured correctly and aligns with your financial reporting processes.
   • Regularly monitor and review the chart of accounts to accommodate changes in your business operations, regulatory requirements, or reporting standards over time.
3. Invest in reliable accounting software to record, organize, and manage financial transactions efficiently. Popular accounting software options used in the UAE include Tally.ERP 9, QuickBooks, Sage 50 (Peachtree), Xero, SAP Business One and Zoho Books.
4. Maintain accurate and up-to-date records of financial transactions, including invoices, receipts, bank statements, and expense reports. Regularly reconcile bank accounts and ensure proper documentation of all transactions. The key financial statements typically prepared by UAE companies include:
   • Balance Sheet
   • Income Statement
   • Cash Flow Statement
   • Statement of Changes in Equity
   • Notes to the Financial Statements
5. Comply with the UAE’s tax regulations, including VAT requirements introduced in 2018. Ensure timely and accurate filing of VAT returns and maintain appropriate documentation to support VAT transactions.
6. Depending on the company’s size and structure, statutory audits may be required. Engage qualified auditors to conduct annual audits of the company’s financial statements to ensure compliance with regulatory requirements and provide assurance to stakeholders. Some common types of statutory audits required for different types of UAE companies are:
   • Limited Liability Companies (LLCs) are typically required to undergo an annual statutory audit of their financial statements.
   • Joint Stock Companies (JSCs) including public and private joint stock companies are subject to mandatory statutory audits of their financial statements.
   • Companies listed on stock exchanges in the UAE, such as the Dubai Financial Market (DFM) or the Abu Dhabi Securities Exchange (ADX) are required to undergo annual statutory audits of their financial statements.
   • Insurance companies and banks operating in the UAE are subject to stringent regulatory requirements and are required to undergo regular statutory audits of their financial statements.
   • Free zone companies in the UAE may be required to undergo statutory audits of their financial statements, depending on the regulations of the respective free zone authority.
7. Stay informed about regulatory updates and changes in accounting standards that may impact the company’s financial reporting obligations. Timely file statutory reports with relevant authorities, such as the Department of Economic Development (DED) or free zone authorities.
8. Implement robust internal controls to safeguard assets, prevent fraud, and ensure the integrity of financial reporting. This may include segregation of duties, authorization procedures, and regular internal audits. Some of the key internal controls that UAE companies can implement to safeguard assets and prevent fraud are:
   • Divide responsibilities among different individuals to prevent one person from having complete control over a process or transaction.
   • Segregate duties related to authorization, recording, custody, and reconciliation of assets to create checks and balances and reduce the risk of fraud or errors.
   • Establish clear policies and procedures for authorizing and approving transactions, expenditures, and access to company resources.
   • Implement controls such as requiring management approval for significant transactions, contracts, or changes to financial records.
   • Implement physical security measures to safeguard assets such as cash, inventory, equipment, and sensitive documents.
   • Provide comprehensive training and awareness programs to employees on internal controls, fraud prevention, and ethical conduct.

By following these points, companies in the UAE can effectively manage their accounts and fulfil their regulatory and reporting obligations while supporting informed decision-making and financial transparency.

If you wish to get detailed information about maintaining accounts of companies in Dubai, you can connect with business consultants at Star Storm in Dubai and they will provide you with all the necessary information for managing your accounts.