The Federal Tax Authority (FTA) has announced that businesses must complete Corporate Tax registration within 90 days from the Date of Incorporation / MOA.
Did you realise that a backlog of unrecorded bills, transactions and income can silently erode your financial control? Backlogs can be a result of many factors, like a sudden influx of orders or lack of efficiency in the company's processes. These backlogs are not just a pile of papers waiting to be filed, they directly affect the growth of your business. But don't worry, there's a way to conquer this - backlog accounting!
While revenue generation is essential, maintaining timely and accurate accounting records is equally critical — which is where backlog accounting comes into play. Despite its importance, many businesses underestimate the importance of financial management, which is a fundamental aspect of running a business.
Inefficient record-keeping or delayed transaction recording can lead to a backlog in accounts and financial statements, thereby hindering business growth. Regular monitoring and review of these backlogs are necessary to prevent a depreciation in the business.
How Backlogs Affect Companies?
Backlog can pose challenges to a company's revenue generation and operational efficiency, which, in turn, can negatively impact its future earnings. However, managing the backlog accounting and financial statements effectively can mitigate these issues and safeguard the company's financial health, allowing it to continue thriving in the face of uncertainty.
Backlog Accounting
Backlog accounting is a process that involves systematically recording all business transactions. This includes recording business transactions from the beginning of the company's operations in order to depict its accurate financial position. Unfortunately, many companies may neglect to record their income or expenses during the initial stages of operation. This can lead to unforeseen financial crises down the line. By systematically resolving transactional backlogs and updating financial records, a company can gain accurate insight into its financial health and plan for future profitability.
Benefits of Using Backlog Accounting Services
- Better decision-making: Companies can make strategic decisions based on periodic reports and ensure smooth operation.
- Cash-flow management: With backlog accounting services in UAE, companies can manage cash flow while maintaining records of income and expenses. A financial assessment determines the company's financial position and helps arrange funds as needed.
- Complete record of transactions: Maintaining a complete record of transactions is critical to any business. It allows for easy access to all pertinent information, empowering businesses to make informed decisions and evaluate the financial well-being of their company.
- Time-saving: When historical transactions are properly recorded in accounting software, businesses can quickly retrieve past data, reducing research time and manual effort.
- Comply with legal requirements: Resolving accounting backlogs allows businesses to verify that records meet regulatory standards and implement required corrections in a timely manner.
- Business analysis: The updated accounts allow investors to produce necessary reports based on business progress and performance. An analysis of business ensures the possibility of future opportunities.
- Quick audit procedure: It will be easier to audit records if they are maintained properly. The auditor can compare previous business data and figure out a trend line.
Significance of Backlog Accounting in UAE
- Analyse the business revenue and the market cost estimation
- Management receives better information for making decisions
- Ensure that the business complies with all laws and regulations.
- Improve profitability by calculating overhead costs and reducing them.
- A real-time view of the company's financial position
Let’s Sum Up
Backlog accounting refers to the process of catching up on financial records that have been delayed or left unprocessed for a certain period. This can be a common issue for businesses that have just started or are in a period of rapid growth. Backlog accounting involves reviewing and reconciling bank statements, invoices, receipts, and other financial documents to ensure the accuracy and completeness of records. This process is critical for businesses to make informed financial decisions, track cash flow, and comply with statutory requirements. At Reyson Badger we can help you clear your transaction backlog and bring your financial records up to date. Our experienced team offers tailored accounting services designed for your business. Contact Reyson Badger to know more.
