The Covid-19 has significantly affected the way the businesses were operating before either positively or negatively. Online accounting services are one of the areas, where some positive developments have taken place due to pandemic and now remote work a buzzword, increasing number of small businesses are moving to outsourced online accounting services instead of having a full-time internal accounting function.
It is crucial for the success of businesses to have accurate & up to date financial records but there is always a high cost associated with it. Therefore, it would be appropriate for small businesses to keep costs of accountants and financial consultants as low as possible without sacrificing the quality of services. In this regard for small businesses, professional accountants providing online accounting services is a good option.
What is Online Accounting Services?
Online accounting is the process of recording financial transactions remotely preferably in cloud-based accounting software. During this process transactions are summarized and analyzed. This helps businesses ascertain financial performance & position at any point of time with the help of different reports generated by online accounting application. These reports provide important insights as to whether businesses are profitable, how much cash is on hand, and current liquidity position, the current worth of the business's assets and liabilities.
The advent of cloud-based accounting software has enabled and supported the practice of remote accounting. Now everything can be handled digitally rather than visiting a physical space or handing over paper files. Communication can be done through online meetings, phone, and email, along with sending digital files through online secure document sharing services or emails.
Scope of Online Bookkeeping Assignment
For each online accounting assignment, the scope varies from business to business. However, below are some essential contents normally included in our service agreement for each virtual bookkeeping client.
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Review of current books of account
This is a one-off activity conducted at the start, and it involves reviewing current accounting set-up including Chart of Accounts to ensure this is as per the best practices and reporting requirements.
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Recording transactions remotely
- Recording of supplier invoices and expenses.
- Recording payments for the purchases and expenses.
- Recording of sales transactions.
- Recording receipts against the sales invoices.
- Recording cash transactions.
- Reconciliation of bank statements with accounting records.
- Recording accruals and prepayments.
- Bookkeeping for the inventory items, if any.
- Preparation of workings for accounting adjustments and passing of journal entries.
- Any other activity incidental to the preparation of adequate financial records.
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Management reports
These reports mainly include the followings though various financial reports are available in the respective online accounting software as listed later in this article:
- Trial balance.
- Balance sheet (Financial position).
- Profit & loss (Financial performance).
- Inventory valuation summary.
- Any other required report regarding inventory.
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Ensuring compliance with VAT, if applicable
Virtual Accountants LLC will ensure proper online bookkeeping is done to comply with FTA requirements for VAT return filing.
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General advice regarding account & finance related matters.
In addition to the above, Virtual Accountants LLC would be available for any general advice in respect of accounting & finance issues as and when requested.
Benefits of Using Our Online Accounting:
It is sometimes difficult for many small businesses to retain or hire a full-time accountant therefore outsourcing is a better option to have access to the required skill and knowledge at an affordable cost. Some of the key benefits of using online accounting are:
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Cost Effective Online Accounting Services
For a full-time in-house accountant, business needs to pay salary, leave pay, insurance, recruitment cost, and employee benefits, etc. But, when it comes to online accounting practices, the agreed-upon cost as specified in the respective accounting services agreement is payable. By outsourcing accounting services to an online accounting firm, small businesses may save a significant amount of money on the cost of keeping an in-house accounting department each year. It may also save expenses by investing more in cost-effective technologies such as cloud accounting and while investing less on physical and costly assets.
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Access to Expertise & Experience
International financial reporting standards, tax laws, and other regulations in UAE such as Economic Substance, UBO, Anti-money Laundering regulation keep changing from time to time, it is impossible for an in-house accountant to keep up without professional training which comes at a huge price. Professional online accountants go through continuous professional development to keep up with new practices and regulations.
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Allows you to focus on your core business!
Small business owners can focus on their core activities while outsourcing accounting activities to professional accountants. Working with an online accountant ensures that your financial reports are accurate and comprehensive.
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Accessibility & Convenience for Accounting Services
The use of online accounting software/cloud accounting solutions facilitates real-time dashboards to make financial data and reports readily available from anywhere. Also, the meeting with an online accountant can be planned online and at any mutually convenient time.
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Customized Report
In addition to standards reports, most of the online accounting software has the option of customizing reports as per the requirement of small business owners.
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Scalable online Accounting Services
The online bookkeeping work may be more demanding during a portion of the year. Particularly when it comes to tax returns or seasonal business activity, where you will need to scale up the remote accounting resources. Required resources can be adjusted accordingly with online service providers.
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Data Security & Back-up
Cloud-based accounting software follows best data security and backup practices. All data in transit is encrypted and regular back-ups are taken.
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Coordination with External Auditor
Small business owners do not need to worry about annual audit of annual financial statements. All coordination with external auditors can be done by online accounting service providers.
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A More Diverse Choice
Working with an online accounting firm gives you a lot more options at a reasonable cost. A wide range of expertise is available.
Reports from Cloud-Based Accounting Solution
As in online accounting services, cloud-based accounting solutions are mostly used. Most of the renowned online accounting applications provide a comprehensive set of financial & business reports. A list of some important reports generated from online accounting software is given below for better understanding.
Business Overview Reports
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Balance Sheet: In simple words, it shows what is owned (assets), what are payables (liabilities), and what is the investment amount (equity). It shows the financial position of the business.
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Profit and Loss: It is also called income statement and it summaries, income, expenses, and net income (profit or loss). It shows the financial performance of the business.
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Business Snapshot: Charts and graphs of income and expenses and how they have changed over time.
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Statement of Cash Flows: It shows cash flowing in and out from sales and expenses (operating activities), investments, and financing.
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Statement of Changes in Equity
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General Ledger: It shows the beginning balance, transactions, and total for each account in the chart of accounts.
Sales, Receivable, Customers, Inventory Reports
- Sales by Customer: It shows sales, grouped by the customer including the date, type, amount, and total.
- Sales by Product/Service: It shows sales, grouped by product or service including the date, transaction type, quantity, rate, amount, and total.
- Accounts receivable ageing detail & Summary: It shows unpaid invoices, grouped by days past due and unpaid balances for each customer, grouped by days past due.
- Collections Report: This report shows overdue invoices with due dates, days past due, and totals for each customer.
- Customer Balance: It shows how much each customer owes and also gives invoice break-up.
- Invoices and Received Payments: This report shows payments received and the invoices which have been applied against the payment received.
- Open Invoices: It shows unpaid invoices and statement charges, with totals for each customer.
- Income by Customer Summary: It shows income minus relevant expenses (net income) for each customer.
- Inventory Valuation Detail: It shows quantity on hand, value, and the average cost for each inventory item.
- Inventory Valuation Summary: It shows transactions for each inventory item, and how they affect quantity on hand, value, and cost.
Payable, Expenses & Suppliers Reports
- Accounts payable ageing detail: It shows unpaid bills (supplier invoices), grouped by days past due.
- Bill Payment List: It shows the bills that have been paid.
- Bills and Applied Payments: It shows payments made and the bills that go with them.
- Supplier Balance Detail: It shows unpaid bills and the total amount payable to each supplier.
- Check Detail: This shows the checks which have been issued, with the date, beneficiary, and amount.
- Expenses by Supplier Summary: It shows total expenses for each supplier.
- Purchases by Product/Service: It shows purchases, grouped by product or service.
Online Accounting Services Outsourcing
In today’s dynamic world it is mandatory for the success of an organization to have a robust working accounting and finance function to timely and accurately account for all the business transactions and compliance with relevant regulations. This comes at a price, and it is relatively easy for large-scale businesses bear this huge cost of hiring professional accountants as employees. Small businesses lack these economies of scale. So, to keep up and reduce expenses without compromising on the quality of service rather than hiring employees within the company, small and medium-sized businesses can gain a competitive advantage by outsourcing bookkeeping services to professional accountants who are skilled in their field and have expertise in activities that are outside of the business’s core functions. Outsourcing of accounting function is the most efficient and cost-saving method which allows the small business owners to focus on its core operations.
Online Accounting Services in UAE
The UAE is an ideal country for entrepreneurs & start-ups and each month thousands of new businesses are registered. These small businesses and start-up during the initial months ignore the bookkeeping part and this creates backlog and problems at the later stage. For these start-ups low-cost online accounting services is the best solution, as business grows, more financial planning and bookkeeping assistance is needed. A skilled online accountant will not only save your time, but they will be able to provide the company the insight and knowledge.
Cloud-Based Accounting Solutions
Below is the list of commonly used cloud-based accounting applications in UAE for online accounting services are:
- QuickBooks Online
- Microsoft Dynamics 365 Business Central
- Zoho Books
- Xero
- FreshBooks
- SAP Business One HANA
Best Online Bookkeeping and Accounting firm in Dubai
Virtual Accountants LLC is a well-known and licensed accounting firm specializing in remote accounting, bookkeeping & VAT services throughout the UAE. We have a team of certified accountants, bookkeepers, consultants, VAT experts who can assist you in all matters relating to accounting & finance function such as accounting, financial consultancy, VAT, Economic Substance regulations.
We provide a wide range of on-site & off-site services and some of our services are listed below.
- On-site and online accounting (Daily, Weekly & Monthly)
- Online accounting supervision
- Accounting reconciliations
- Backlog accounting and cleanup
- Inventory management and reconciliation
- Financial reporting, i.e., preparation of financial statements
- Internal & external audits
- Online VAT registration & return filing
Begin Working with Online Accountants Right Away!
At Virtual Accountants LLC we use cloud-based accounting solutions and have well-defined in-house procedures for providing online & remote accounting services. We have 16 years of expertise in traditional accounting and now have effectively transformed that expertise in online accounting services during the past two years. Contact our team now to find more, no matter if you are in the United Arab Emirates or abroad. You can call/WhatsApp us at 0509626046, email us at sales@virtualaccountants.ae or you can fill the
contact us form.
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