Posts in category: Accounting & Finance

You should concentrate on your clients, step up your marketing and sales efforts, assess your pricing tactics, and widen your market if you want to enhance your small business’s revenue. There are several tactics small business owners can employ to boost revenues and enhance bottom lines, regardless of their budget. Achieving success and increasing revenue requires striking a balance between short-term and long-term objectives.

You must boost revenues if you want to keep your company operating. A business’s financial health is good when its sales are growing. The straightforward operational marketing and service strategies listed below might assist small business owners in reducing expenses and increasing income.

1. Identify Your Objectives

You must begin with a specific plan that is in line with your income objectives. Determine what success looks like and plan the path to achieve it. At every stage of your business, it’s critical to establish your income objectives.

For instance, your initial sales target during the start-up phase is to reach profitability. However, after the company makes it through the risky start-up phase, the next objective is to increase sales so that you can finance the company’s strategic expansion, surpass gross and net revenue targets, and create reserves for your organization.

You may focus on the actions that will help you achieve your goals once you have stated them and determined what actually generates sales and money.

2. Prioritize Reoccurring Customers

Small businesses should focus on upselling or cross-selling to current clients rather than devoting resources to attempting to attract new consumers. As your existing consumers are already familiar with your products and services and are therefore more likely to use them, this is substantially more effective and cost-efficient.

Giving your prior customers and clients free gifts and discounts as a sign of your appreciation can encourage them to make another purchase. They get the idea that you went above and above for them because you value them greatly.

Making connections with your customer interaction can also be a great method to attract new clients and accelerate business expansion. Giving existing customers a compelling referral bonus may be a significant win for your business since people are drawn to connect with individuals who think and act like them.

3. Include Bonus Services or Goods

Combining complementary goods and services can boost sales without raising overhead expenses. Savings are frequently linked to bundling. Even if the customer’s savings are minimal, it’s still a much simpler and more affordable sale for you.

4. Develop Your Pricing Plan

The primary consideration when making a purchase is price. Prices for goods and services should be adjusted in accordance with your market conditions and financial objectives.

Only when a price increase has no negative effects on sales will it raise revenues and boost business profits. To position your prices in the market most effectively, you should try to comprehend how the prices of your competitors’ products compare to those of comparable products and how your product stands out among them.

Consider gradually increasing your prices rather than drastically. A slight price increase may not appear significant compared to the full price, but it directly affects the profit margins and the overall balance.

5. Offer Rebates and Discounts

Discounts encourage customers to start purchasing when they are skillfully marketed. Discounts on specific products, such as quantity discounts on two or more products, seasonal reductions, or discounts across the board during a storewide sale, are all possible.

A rebate usually referred to as a deferred discount, is given as a percentage of the product’s price in cash after it has been purchased. While the reduced redemption rate lowers its cost, the advertised discount increases sales.

6. Use Effective Advertising Strategies

Marketing is a clear-cut strategy to increase sales and money. Examine consumer purchasing and product preference data. Create targeted promotions based on strategic plans to reach particular clients with advertising messages and promotional offers.

You can use a variety of marketing techniques and platforms to draw attention to your goods or services. These include social media, email marketing, pay-per-click advertising, and etc.

7. Renew Your Sales Channel

You need to inspire passion and give people a cause to buy in order to re-energize your sales channel. This may be accomplished by including all of your products and services in vibrant, eye-catching sales literature that conveys a sense of urgency, rewarding sales associates, and increasing subscription sales.

KLOUDAC Accounting Firm Dubai, UAE

KLOUDAC helps you to manage all your finances by guiding you through out the journey. Various financial supports are provided such as financial planning, planning and acquisition of funds, increasing profits and many more.   

KLOUDAC is a recognized accounting firm in Dubai, UAE with 15 years of service experience. We have built connections with over 500 customers. It has also won the certification of Xero Payroll and the certification of Xero advisor from the world-leading online accounting software – XERO. Moreover, KLOUDAC is a golden champion partner of Xero.  Accounting and Bookkeeping are more convenient for SMEs via KLOUDAC since they provide their clients with a whole package of services such as Financial Consultancy, Business setup, Audit and assurance services, Taxation services, Recognized accounting software, and more.

UAE or United Arab Emirates is a truly unique global place in this world where tradition and opulence go hand in hand, and that too sometimes synonymously. When opulence goes a long way in the UAE, its transportation services too must bear credibility of this statement. The transportation services and the high class road connectivity help in maintaining the credibility of being a high class nation and provide the levels of connectivity a developed nation needs to provide!

Taxis, buses, metro, mono, and trams are the preferred modes of transportation and each of these modes has its own advantages. Along with fantastic road network and public transport connectivity, the people using these modes of transport also get the facility of hassle free payment mode, thus making the entire process of local passenger transport in UAE much more comfortable and convenient. However, such a comfortable journey and rides involve a cost. Taxes are a way to recover such costs or at least a part of such costs. Value Added Taxes have been implemented in the UAE in 2018 and since then the taxes have had a great impact upon the various businesses operating in UAE.

VAT on Transportation Services in UAE
The transportation services in UAE are well regulated by the laws of the land. Following the rules of VAT Decree-Law is one of the important laws that the organisations involved in providing transportation services in the UAE need to adhere to. However, it is important to understand the implications of the rules and provisions of VAT on Transportation Services in UAE to comply with it.

According to Article 46 (4) of the VAT Decree –Law, the supply of local passenger transportation is exempted. Therefore, if a company ABC operates a Taxi service and offers its service to commuters, people within the UAE should follow the provisions of this law carefully. Services provided by this company ABC can include picking up employees from their residence to their places of work situated in the UAE. Suppose, when an employee or an organisation where such employees work arranges for the transportation of its employees connects with this transport Company ABC, Company ABC need not include VAT since such a journey is exempt from VAT according to Clause 4 of Article 46 of the VAT Decree – Law

Another Article 45 (1) of the Executive Regulation mentions that the supply of local passenger transportation service in any qualifying means of transport, as mentioned in the above section of the article (Taxi, bus, tram, metro, and mono and others) via land, air or water would be exempted. Therefore, company ABC is exempt even under this provision. How? Company ABC, as mentioned in the above paragraph, provides taxi services, which is a qualifying means of transport as mentioned above. Thus the services of Company ABC, if availed by any passenger or any organisation for the purpose of transporting the employees to the office and back, are exempt from VAT implications under Clause 1 of Article 45. However, suppose the organisation where the employees work organises a private jet and uses it to transport their employees to their homes would certainly not qualify as a means of local passenger transport in UAE.

It is clear that VAT Applicability on Local Passenger Transport UAE is zero in case it is a normal transportation service provided for regular activities such as travelling to work place and back or availing public transport to travel to the airport or take a drop from the airport. However, is every journey using the local passenger transport exempted from VAT in UAE? No, probably not.

This is because according to Article 45 (4) of the Executive Regulation, such exemption of VAT Applicability on Local Passenger Transport UAE will not apply in case the transportation service has been availed with a purpose of a pleasure trip. The definition of a pleasure trip includes sightseeing, dining out or enjoying catering services, and/or any other form of pleasure or entertainment that might include going to watch a theatrical performance too!

Now, let us understand these provisions through an example.
● Suppose there is a person X. Person X hires a taxi to travel to his office which is towards the south of his city, he need not pay VAT on Transportation Services in UAE.
● Person X, after finishing his office, needs to go for dinner. He hires another taxi to reach the hotel where he plans dinner with his friends. He needs to pay VAT on Transportation Services in UAE as this trip qualifies as a pleasure trip and is not exempted from VAT under Article 45 (4) of the Executive Regulation.
● After dinner, Person X needs to travel to the airport as he has to travel to the USA for a business meeting. Person X calls for a taxi to drop him to the airport. He need not pay VAT on Transportation Services in UAE as this trip is exempted under Article 45 (1) and 46 (4).

In the case of the trips in which Person X is exempted from paying taxes, the taxi operating company cannot claim or recover any expense under the VAT subheading.
Suppose the same taxi company is hired for all three trips mentioned above and coincidentally the same taxi and taxi driver completes the trip with Person X, only one trip would be applicable for VAT on Transportation Service in UAE – the one where he goes for dinner. For the remaining two trips, no VAT should be included in the bills.
Understanding these provisions of the law clearly would help you be aware and not give in to any inappropriate taxation. For more information, you can connect with KLOUDAC

United Arab Emirates or UAE or Emirates is the federation of seven Emirates, including Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Fujairah, and Ras Al Khaimah. Though taxation in UAE was initially restricted to corporate taxes levied on foreign banks and oil companies, the companies will have to follow the transfer pricing rules and documentation procedures as mentioned and mandated in the OECD (Organisation for Economic Co-operation and Development) Transfer Pricing Guidelines.

What is Transfer Pricing?

Transfer pricing can be explained as the price paid for the transfer of goods and services from one unit of an organization to another unit of the same organization situated in a different country. Suppose company X, headed by Mr. Alex and headquartered in the USA, produces biscuits. The company has operations in the UK, Dubai, and India. Now the UK Company is in short supply of a particular flavoring agent used in the biscuit that is available at the Dubai Office in surplus. Now the UK Company asks the Dubai Office to send ten units of the flavoring agent to the UK. Usually, company X being the mother company, would guide the Dubai Office to parcel the ten units of flavoring agent to the UK office and make adjustments in the stock ledger of both companies.

The monetary considerations, in lieu of such a transaction, have a huge probability of being influenced by Mr. Alex or his team at the headquarters. For example, He can say that instead of Dh100, charge Dh80 since this is an internal transfer. There can be a probability of tax evasion too. How? Well, suppose the UK imposes an import tax on the flavouring agent in case the UK company ordered it in the normal UK Market. This internal transfer helps the UK company save on such import tax because the transfer is happening internally from a sister concern of the same company.

In order to avoid such price alterations and tax evasion among related companies or companies under the same operations, the policy of transfer pricing has been implemented by the OECD. The same transfer pricing mechanism would now be applicable for companies operating within UAE or with operations involving any company in Dubai. Transfer pricing can be explained as the due consideration that has to be paid by the companies to avail of a product or service from another company, though both companies might be related. So, under the influence of transfer pricing the UK company needs to pay due consideration for the flavouring agent to the Dubai Company.

Transfer pricing is also helpful in managing situations where a related person to the entities might take benefits, either in kind or salaries, that are much higher than the existing salary or perquisites applicable in the market, for e.g., extraordinary salaries are being paid to some employee or expat diplomat working in some other location. This might be in favour of an individual’s gain; however, this would erode the profitability of the organisation and thus might not be in favour of the shareholders of the company at large. Therefore, Transfer pricing is mandated to take care and control over any of the above financial irregularities that might happen due to multiple location operations of the organisation.

Methods of Calculating Transfer Pricing

While the concept of transfer pricing has been an acceptable feature globally, in all kinds of cross border operations of organisations, UAE had a different way of looking at corporate taxes. In the UAE, only foreign banks and oil companies came under the ambit of corporate taxation till date. However, according to the announcement of the Ministry of Finance, UAE, on January 31, 2022, a New Federal Corporate Income Tax System will be introduced in the emirates that will be effective from June 2023 onwards.

According to the announcement, the ministry proposes to levy a standard corporate income tax rate of nine percent upon the business profits earned by UAE businesses during a tax accounting period, following the global practice of taxation. Levying of Corporate Income Tax will imply levying of OECD Transfer Pricing Rules too! Various methods have been used to calculate the Transfer Pricing applicable to organisations and entities for years such as the:

• Traditional Transaction Methods including:
  • Comparable Uncontrolled Price Method
  • Resale Price Method
  • Cost plus Method
• Transactional Profit Method including:
  • Transactional Net Margin Method
  • Transactional Profit Split Method

The implementation of Corporate Income Tax and OECD Transfer Pricing Rules in UAE implies that the transactions within and between the enterprises under common control and management will be conducted at Arm’s Length Pricing Terms

What is Arm’s Length Pricing Term?

The Arm’s Length Price Term practiced between two enterprises controlled by the same management implies that the transfer price paid for the transaction between the two related entities (under the same management) will be the same as the transfer price paid for the transaction between two unrelated and independent entities. Therefore, the transaction of flavouring agent between the UK Company and the Dubai Company would be dealt as if the Dubai and the UK Company were unrelated to each other. The Dubai Company would be treated as an independent supplier of the flavouring agent for the UK Company. This way the Dubai Company realises the appropriate cost and tax evasion between the companies would also not be possible.

Impact of Transfer Pricing

The impact of levying OECD Transfer Pricing Rules as part of the new Federal Corporate Income Tax System will definitely cause a ripple effect in the global market and therefore, it is the most trending topic currently. Some of the important impacts of transfer pricing includes:

• Corporate Taxpayers paying transfer prices at Arm’s Length Price between related entities. Thus the transactions between the related parties will also be treated at par with the transactions between independent parties.
• Payment of Transfer Price at Arm’s Length Price is the fair market price of the commodity, goods, or services in the open market.
• Transfer pricing will be calculated using various methods depending on the type of transaction and the entities involved
• The entities also need to undertake detailed transfer pricing documentation annually
• The Federal Tax authorities will be regularly assessing and scrutinising the policies related to transfer pricing, the documentation submitted by the organisations, and detailed scrutiny into the intercompany and inter group transactions conducted within the organisation within a tax assessment year.
• The entities will be subjected to harsh penalties in case of non-compliance with the Transfer Pricing rules and documentation procedures.

Though the entire process of transfer pricing and its documentation will increase the workload of the organisations operating out of the UAE, implementation of such transfer pricing rules is important in order to create parity between the UAE organisations and the global organisations.

Importance of Transfer Pricing

The transfer pricing rules, and documentation procedures might look cumbersome, but the introduction of the new Federal Corporate Income Tax System is beneficial for individual organisations as well as important for the UAE. Some reasons why the introduction of transfer pricing policy and documentation procedure is in the favor of the organisation include:

• Organisations that have a huge quantum of international operations can find ways to optimise their profits across the different jurisdictions of company operations. This is in accordance with the Base Erosion and Profit Shifting (Beps) Action Plan of OECD.
• The Transfer Pricing policy will lead to unprecedented disclosure from the organisational perspective. However, such disclosure will also lead to transparency in terms of corporate dealing, thus improving the corporate reputation and trust, in the long run, that too in the global domain.
• The global companies with headquarters in UAE and operations across the globe are expected to have streamlined supply chains.
• The global companies are also expected to mitigate their tax risks with the introduction of a Transfer Pricing policy.
• The global companies will also have a chance to fulfil the compliance requirements at multi-location operations with such a transfer pricing policy.
• The global companies with headquarters in UAE are expected to curtail their tax burdens with proper understanding and guidance on Transfer Pricing Policy and Beps regulation.
• With the curtailment of tax burdens, the returns of the shareholders of these global companies will also increase.
• Further, the prices fixed for the consumers, also, will be reduced with such savings on taxes by the global companies.

However, the introduction of the option of Beeps can lead to abuse and manipulation by the organizations in order to save taxes artificially. Therefore, the Federal Tax Authorities will have the added responsibility of scrutinizing the documentation submitted by the organisations thoroughly.

What is Financial Literacy?

Understanding the financials of your company is the foundation of financial literacy. It requires solid financial education, or knowledge of financial terminologies, ideas, concepts, practices, and assertions. All of the information helps in your understanding of the financial state of your business and the variables that affect profitability.

The Importance of Financial Literacy for Small Business Owners

You should more crucially be aware of where your money is coming from and going. Being financially literate enables you to make the correct choices for your business. Whether it’s about cash flow management, creating a business plan, hiring a new employee, or anything else, you’ll have a completely different perspective once you’re financially literate. You don’t have to be a college graduate to understand or excel at financial literacy. Even if you are from a non-accounting background, learning the basics can help you make informed decisions.

Let’s dive deep into the ways of how being financially literate can help you in business.

• Managing your cash flow

Every company must have liquid assets (Cash or possessions that can be rapidly and readily converted into cash are considered liquid assets). While liquidity makes sure that businesses have enough cash to pay their bills, it can also give them a competitive edge when liquidity is limited throughout the economy.

Make sure you pay your suppliers on schedule and collect payments from your customers. This guarantees you have the appropriate amount of money on hand. You must seek out high-interest loans if you are unable to control your cash flows. The financial health and profitability of your business will be significantly impacted by these high-interest loans, but this damage can be minimized with the appropriate financial education.

• Analyzing your Financial Statements  

Financially literate people can analyze their financial statements on their own. Financial statements depict the performance of the company over a period of time. They are usually made at the end of the annual year. The profit and loss statement shows the net profit or the loss of the business. 

By analyzing your profit and loss statement, you can accurately calculate the amount of tax. Besides the P&L statement, evaluating your balance sheet is also important as it helps you learn about the company’s financial health. You can find out the liabilities, assets, and capital of the company through your balance sheet. What’s more, you can estimate whether you can qualify for a loan and get an idea about the business’s creditors and debtors.

• Handling taxes

Business owners have to deal with income tax, self-employment tax, and many more. If you have a thorough understanding of your tax situation, you can calculate how much you need to pay. If your tax situation is beyond your capabilities to complete, you can also hire a tax professional or accountant to handle your taxes for you. 

• Make more informed decisions

For you to make crucial decisions, you need to have a grasp of the financials and what it means for you. When faced with a difficult business decision, you can confidently consider the financial implications before weighing your options and making the best choice for your business. 

Ways to increase your Financial Literacy

1. Use Debt the right way 

Many people think debt is bad, but that’s not necessarily true. If you look to expand your business by taking a business loan or other debt, there’s no harm in that. But if you use debt on unnecessary items, you will end up spiraling into more debt.

2. Build a habit of reading 

Reading books is one of the best ways to increase your financial literacy. You will understand the business terminologies and the ways experts analyze the finances of different companies. It will help you find the right ways to manage your cash flow and prepare your taxes the right way.

3. Stay up-to-date with the new technology

One of the best ways to increase your financial literacy is by understanding new technologies. The internet is an excellent way to stay up to date about various technologies. You can also use it to learn new financial literacy skills. 

4. Take advantage of Financial Education Resources

There are lots of free quality resources on the web such as videos, audios, podcasts, webinars, digital books, websites and blogs. Determine which method of learning about finance is right for you. These factors include your preferred learning style, budget, schedule, and transportation options. Once you’ve selected a method, it’s important to dedicate time in your routine to your financial education, as well as make connections with other professionals.

5. Know when to Outsource

Not every business owner can be a financial expert. If you’re struggling to take care of your business finances, consider hiring someone to help you take care of them. It’s tempting to think you’re saving money by doing it all yourself, but financial mistakes can lead to serious fees and fines. Kloudac can help you to manage your accounting and  finances and to support your crucial business decisions.

KLOUDAC Accounting Firm Dubai, UAE

KLOUDAC is a recognized accounting firm in Dubai, UAE with 15 years of service experience. We have built connections with over 500 customers. It has also won the certification of Xero Payroll and the certification of Xero advisor from the world-leading online accounting software – XERO. Moreover, KLOUDAC is a golden champion partner of Xero.  

Accounting and Bookkeeping are more convenient for SMEs via KLOUDAC since they provide their clients with a whole package of services such as Financial Consultancy, Business setup, Audit and assurance services, Taxation services, Recognized accounting software, and more. 

The goal of an audit is to determine if the information presented in a financial report accurately reflects an organization’s financial status at a given date. The auditor examines the organization’s financial report in accordance with the government’s auditing standards. Auditors use historical accounting data to forecast an organization’s future. An audit’s principal goal is to form an opinion about the data in a financial report.

Who typically organize, schedule, and perform in-house audits?

In-house auditors Internal Auditors are the ones who organize, schedule and perform in-house/internal audits.

An internal audit is the accounting procedure that assesses the performance of an organization’s internal controls. Simply, Internal auditors are internal employees who work for the company. An internal auditor’s goal is to add value and improve an organization’s operations while also ensuring that the organization follows government rules and regulations. Internal auditors collect all necessary information about how a company operates and use it to highlight where it is succeeding and where it might improve.

Who typically organize, schedule, and perform external audits?

An external audit is a third-party examination of a company’s financial accounts. An outside organization or an independent person does the external audit. An external audit is a valuable review of an organization’s accounting for both businesses and governments. In comparison to an internal audit, an external audit is less likely to encounter a conflict of interest. The role of an external auditor in evaluating a company’s finances is important.

What is the purpose of having both in-house and external audits?

An internal audit’s goal is to evaluate an organization’s performance on a regular basis and find areas for improvement in the future, whether the company is large or small. Internal audits are critical for businesses across a wide range of industries.

An external audit examines a company’s financial statements to ensure that they are accurate and complete. An external auditor may be hired by the organization to investigate fraud. It is an inspection carried out by a third-party accountant. This sort of audit is most typically used to obtain certification of an entity’s financial statements. Certain investors and lenders, as well as all publicly traded companies, demand this certification. 

Some major differences between in-house and external audits

KLOUDAC Accounting Firm Dubai, UAE

KLOUDAC is a recognized accounting firm in Dubai, UAE with 15 years of service experience. We have built connections with over 500 customers. It has also won the certification of Xero Payroll and certification of Xero advisor from the world’s leading online accounting software – XERO. Moreover, KLOUDAC is a golden champion partner of Xero.  Accounting and Bookkeeping are more convenient for the SMEs via KLOUDAC since they provide their clients with a whole package of services such as Financial Consultancy, Business setup, Audit and assurance services, Taxation services, Recognized accounting software, and more.

Accounting systems help business owners measure business growth in terms of profitability. Good financial systems will also identify problems before they get out of hand. If you don’t know if your company has a strategy to develop, adopt and review accounting processes, now is the time to reconsider your accounting approach.

Using technology to optimize, automate, streamline and integrate as many steps of your company’s bookkeeping and accounting processes as possible will reduce your back-office burden immensely. Without a comprehensive accounting system, you’ll be operating your business in the financial dark and risk facing internal fraud, tax penalties, and possible failure.

Ways to develop, improve and optimize your accounting systems

1. Dedicated Business Accounts

Having a separate bank account keeps records distinct and will make life easier when it comes to tax time. Separating personal and business finances also protects your personal assets in the unfortunate case of bankruptcy. Most business checking accounts have higher fees than personal banking, so pay close attention to what you’ll owe.

2. Expense Management

You absolutely must have a system for managing employee expenses and reimbursing them. Your system should have processes in place for recording the expense (receipt tracking) and noting the purpose of the expense. If your employees do not have access to business credit or debit cards, you will also need to develop a standard process for expense reporting.

3. Accounts Payable / Receivable Management

Accounts receivable is your business’ lifeline for paying all of your bills on time or early. Without a thorough system for managing accounts payable, you risk your business’s reputation and the unnecessary expense of late fees and interest. Managing accounts receivable requires you to establish systems, policies, and procedures.

4. Automations to Consider

Business process automation can help you fulfill your business goals, but only if you use the right tools. Technology solutions have been developed to overcome almost every challenge. Look for scalable features and ongoing support, but don’t be afraid to make use of modern bookkeeping and accounting tools.

4.1 Select the Right Accounting Software

From the start, establish an accounting system for organizing receipts and other important records. Small/Medium businesses are most likely to use QuickBooks (43%). Other popular accounting software includes Xero, FreshBooks, Wave, and Sage. You can always consult a professional to get an understanding of which software would fit your business. You will be able to retrieve and review your income statements and balance sheets on a regular (monthly or quarterly) basis and always look at your business’s financial year as a whole with annual reports.

4.2 Data Management

Automated tools to retrieve data for you by way of optical character recognition (OCR), allowing you to automatically enter information into your accounting system are here.  It may sound futuristic, but it’s not! This technology is available today by way of tools such as QBO (QuickBooks Online)

4.3 Expense Management

Imagine a company that has the ability to memorize your company’s unique expense management policies and automatically determines which expenses need a manager’s review and which can get automatic approval. Save time and money by not having to create and authorize manual spreadsheets, speeding up the approval process, and eliminating duplicate data entry.

4.4 Invoice Management

Automated invoicing is huge! Eliminate mistakes and shave tons of time off your accounting team’s monthly tasks with solutions such as Intuit Payment Solutions, which automates billing, collections, and cash application.

4.5 Sales Tax Reporting

Finding the best tool for this type of automation depends on your business. Big penalties can be involved if you get sales tax wrong. Establish a proactive plan and system for accounting and keeping up with sales taxes.

4.6 Paperwork Management

Back up your data. Cloud accounting provides some protection, but you should have plans in place for potential outages. You should also scan paper documents to have digital backups in the event of an emergency in the office. Convert physical files into digital files. Reduce the time required to move a bill, invoice, or receipt into the system where the data is required using a tool like Receipt Bank.

5. Find High-quality Accounting Partners

As a business owner, you’ll need a little extra financial planning help or guidance, there are a few individuals you might want to consider enlisting:

●      Accountant. Accountants can advise at many different points, including your business structure, creating financial statements, obtaining necessary licenses and permits, and even writing a business plan.

●      Certified public accountant (CPA). In the case of an audit, a CPA is the only individual who can legally prepare an audited financial statement.

●      Bookkeeper. The bookkeeper manages the day-to-day records, regularly reconciling accounts, categorizing expenses, and managing accounts receivable/accounts payable.

●      Tax preparer. Your tax preparer fills out necessary forms and may file them on your behalf during tax season. Some will also set up your estimated tax payments.

●      Tax planner. These professionals help optimize your taxes before you file them, helping you learn ways to lower your tax burden.

KLOUDAC will help you design and establish smart and efficient bookkeeping and accounting processes that work for your business. We will save you time and money and provide you with the financial data you need to make strategic decisions. Partnering with Kloudac, your company will have access to a team of highly experienced, trained, and certified bookkeepers.

KLOUDAC Accounting Firm Dubai, UAE

KLOUDAC is a recognized accounting firm in Dubai, UAE with 15 years of service experience. We have built connections with over 500 customers. It has also won the certification of Xero Payroll and certification of Xero advisor from the world’s leading online accounting software – XERO. Moreover, KLOUDAC is a golden champion partner of Xero.  Accounting and Bookkeeping are more convenient for the SMEs via KLOUDAC since they provide their clients with a whole package of services such as Financial Consultancy, Business setup, Audit and assurance services, Taxation services, Recognized accounting software, and more.

Every action you do and decision you make has an impact on a company’s profitability. As a result, you should have a greater knowledge of the decisions that you make. Here are 7 recommendations for increasing profitability:

There are four strategies to boost your company’s profitability.

There are four primary areas where profitability can be increased. 

• Reduced expenses
• Increased turnover
• Increased production
• Increased efficiency 

You can also diversify your business by entering new markets or developing new products or services.

Keep track of your expenses

Your profitability can be boosted by proper expense management. While most organizations can discover ways to minimize costs, it’s critical not to sacrifice the quality of your products and services.

Activity-based costing is a useful tool for determining the true cost of various company activities. It determines how much it costs to perform a certain business activity by allocating proportions of all expenditures – such as salaries, office space, and raw materials – to specific activities.

Examine your offer

Examine what you offer, who you sell it to, and how much you charge to determine if you can improve.

• Pricing Factors to consider: Regularly reviewing your pricing. Changes in your market may allow you to boost your prices without risking your sales.
• Determine who your best customers are: Your profitability is influenced by more than just your price list; the type of clients you sell to can also have a significant impact.

Think about the following possibilities:

• Upselling – selling customers higher-priced items that contribute more to your bottom line.
• Cross-selling – entails analyzing what customers buy and recommending comparable items.
• diversification – Identifying a demand and generating new products and services to meet it.

Increase your purchasing power

Buying more effectively is one of the most obvious ways to boost your profits. It’s a good idea to check your supplier base on a regular basis to see if you can get the same raw materials at a lower cost or with greater efficiency. At the same time, make an effort to maintain a high level of quality.

Get the greatest price from your vendors

• Identifying your major spending categories will reveal where you spend the most money.
• To get a better price, consider using your status as a trusted client to negotiate long-term contracts or realistic annual minimum spending with your regular suppliers. Consider switching to a different supplier if you can’t find a better bargain.
• Examine the number of vendors you work with. Purchasing from a large number of vendors can be inefficient because it takes more time and dilutes your purchasing power. Avoid putting all of your business with just one or two providers, as this could leave you susceptible if something goes wrong.

Reduce waste in the workplace

• Reduce your energy costs by turning off all equipment while it is not in use
• Remove unused phone lines or photocopiers that you are paying for

Broaden your customer base

Moving into new markets can completely reshape a company and, if done successfully, can greatly boost profits. Expansion into new markets, on the other hand, can be dangerous, and costly mistakes might be made.

Investigate

• Research before you begin. Are you able to alter or adapt existing products or services to meet the needs of new markets? This can generate additional money at a low cost, which is great for increasing profits. 
• Do you know who your potential new consumers are, why they’ll buy your product or service, when and how they’ll buy it, and how much they’ll pay?
• You can also utilize social media to do research and solicit alternate perspectives, ideas, and comments from your customers.

New product and service development

It’s important to think about the viability of a new product or service before producing it for a new market. The following are some important questions to consider:

• Do you have the necessary skills and expertise on staff, or will you need to hire them?
• Do you have the commitment and resources to make the new endeavor a success?
• Is it possible to reduce the risk?
• Can you be certain that there will be a demand for the new product or service at a price that will allow you to profit?
• Partnerships and joint ventures, rather than going alone, might give you more security in establishing yourself in a new or expanded industry.

 Increased output

• Choosing the right key performance indicators (KPIs) for your company will help you set clear goals. They should reflect your objectives, be quantifiable and comparative, and allow for adjustments to keep you on track.
• It’s beneficial to gain a sense of how similar companies address similar problems. Benchmarking can be as simple as comparing energy expenses between similar organizations or as complex as sharing data and analyzing production and stockholding habits with other companies you trust.
• Benchmarking can generate new ideas and energy for making your firm more efficient by providing a different perspective.
• When benchmarking, it’s a good idea to focus on areas that are similar to the KPIs you’ve already defined.

Checklist for Increasing Your Business’s Profitability

Improving the profitability of your company can help you cut expenses, enhance turnover and production, and plan for change and expansion.

The way you boost the profitability of your business will be determined by a variety of criteria, including the industry you work in, the size of your company, and its running costs. You could, however, consider the following choices:

• Identifying areas in your firm that could be improved or made more effective
• Evaluate your general business costs, such as overheads, how reduced deals with loyal customers affect your revenues, and how productive your employees are, as well as identify and reduce areas of business waste, such as electricity supply prices.
• To increase your profit margins, use up-selling, cross-selling, and diversification tactics.
• Identifying and limiting areas of expenditure via bargaining with your suppliers’
• long-term contracts with suppliers to get a better bargain on products explore new opportunities in your industry and figure out where you could extend your market
• Install monitoring systems and processes, such as benchmarking.

KLOUDAC Accounting Firm Dubai, UAE

KLOUDAC is a recognized accounting firm in Dubai, UAE with 15 years of service experience. We have built connections with over 500 customers. It has also won the certification of Xero Payroll and certification of Xero advisor from the world’s leading online accounting software – XERO. Moreover, KLOUDAC is a golden champion partner of Xero.  Accounting and Bookkeeping are more convenient for the SMEs via KLOUDAC since they provide their clients with a whole package of services such as Financial Consultancy, Business setup, Audit and assurance services, Taxation services, Recognized accounting software, and more.