Smart businesses know that cash is what’s backs the operations of the business. No matter how well the cash flow is performing, if the business doesn’t know its exact cash position, it can be difficult to keep it running. This is especially true for SMEs, where even a few thousand dollars can make a big difference.
The best way to know the actual cashflow of a business is accurate bookkeeping. Which basically means that you record each transaction the right way and at right times. If you wish to be a smart SME owner, then this article should definitely interest you. Here are 5 benefits of bookkeeping for SMEs:
You can Comply with the Law
There’s nothing more disturbing for a business than having the financial regulatory bodies pointing fingers at their financial records. This can easily lead to heavy penalties, and some businesses may even have to be shut down altogether.
If you hire a professional to assist you, your accounts can be immaculate. Plus, the professionals will know the latest laws and regulations and always have the accounting books maintained accordingly so that your business always complies with the authorities.
You reduce risk
When you have the right financial records, you can reduce the risks of being in the market. This can be achieved when your accounts are in perfect order. Plus, you also reduce the internal risks of theft and fraudulent financial activities.
When businesses don’t have their accounts in order, they are at risk of malicious financial activities. Proper Bookkeeping following the already established financial standards can help find out the suspicious transactions and easily mitigate the risks of unfair financial activities.
Getting Loans and Investments Become Easier
SMEs often opt for loans in order to grow or manage their finances. Banks are very strict when it comes to giving loans to SME’s. As an SME, you need to establish your credibility with the bank in order to get the loan. When your books are true and fair, you become a trustworthy candidate for the bank.
Also, if you are looking for investors, then you’ll have to have the books well maintained. Anyone willing to invest with you will need to know your financial standings. How will you do that if your books aren’t in order?
You are always Prepared for a Financial Audit
If your accounting books are accurately maintained, you will have justifications for each transaction that the business made. This way, you’ll always be prepared for an external audit and have the right answers to their questions.
Taxation Becomes Easy
While the tax laws are dynamic and official figures can only be figured when it’s time to file taxes, with proper bookkeeping, you can predict the tax figures almost accurately. This way, you are better prepared for the taxation.
Businesses that fail to file the correct taxes can be penalized. Choosing a reliable taxation partner can help you avoid penalties. If you are looking for help with taxation in the UAE, then contact Harbins.
Bookkeeping is the basis of any strong business. If you are looking for the right help for your bookkeeping needs, then give Harbins a chance. We are amongst the best bookkeeping and accounting firms in Dubai and are determined to help SMEs flourish. With our services, you can easily get ahead of the competition and ace the markets. Reach out to us to know more. We’d love to assist you in any way possible!