It goes without saying that owning and operating a business is costly. Inexperienced entrepreneurs are more concerned with the amount of money they can make from their firm than with the costs they will incur while operating it. It’s a serious error that may be corrected with the assistance of accounting firms in Dubai.
New business owners are aware of the costs associated with launching their company, such as equipment costs and the cost foundation for their primary products.
However, they frequently overlook important expenses that are critical to their company’s survival. Ignoring such costs at the planning stage will result in some unexpected incidents later. Let’s have a look at some of the most common mistakes that entrepreneurs make in order to avoid them:
Expenses Management
As you are all aware, the UAE will no longer be a tax-free zone after June 2023, when corporation tax will be implemented. Value Added Tax (VAT) has also been imposed on enterprises since 2018. Even if you’re not a large corporation, taxes can quickly become confusing. In the UAE, you must understand how much of your income must be set aside for VAT and corporation tax.
You must conduct thorough study and include tax costs in your profit forecast. This kind of forethought and strategizing will keep you from getting a harsh awakening when it comes to completing your UAE tax return. During tax season, administrative penalties may be a death sentence for SMEs.
Accounting firms in Dubai can assist business owners who don’t have a VAT or corporate tax strategy.
Insurance expenses
When calculating the costs of starting a new business, most companies put insurance-related expenses at the bottom of their priority list. Even though there is a wide selection of company insurance available, you may not require all of it. You must, however, have a clear grasp of your requirements. Depending on your industry, you may require general liability, product liability, or even professional liability insurance. Analyze the cost of your insurance demand and set aside the necessary funds.
Employee Expenses
If you have a large number of employees, you will be spending a lot of money on them each month. Basic needs, such as the cost of office supplies needed to help your staff function more efficiently, are included in the employee expenses. Payments for business-related travel, meals, and other expenses incurred while performing their duties are also included in the expenses.
Utility Expenses
Rent costs are commonly projected into business financial models by entrepreneurs. They, on the other hand, ignore utility costs. Depending on the size and location of your company, you could be spending a significant amount of money each month on internet charges as well as bills for energy, phone service, water, janitorial services, gas, and other services. During the planning process, get a comprehensive understanding of utility expenses and include them into your company’s financial model. For further information, consult with accounting firms in Dubai.
Cost Cutting Techniques
- Emergency repairs are costs that you can’t plan for. Unexpected expenses might throw a budget off track. The best solution is to budget for typical unexpected bills and crises. This method would assist you in effectively managing any expense.
- Emergency repairs are costs that you can’t plan for. Unexpected expenses might throw a budget off track. The best solution is to budget for typical unexpected bills and crises. This method would assist you in effectively managing any expense.
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 leading online accounting software – XERO. Moreover, KLOUDAC is a golden champion partner of Xero.
Accounting and Bookkeeping is 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.