- March 2, 2022
- Posted by: admin@ecabahrain
- Category: Accounts
Accounting and Bookkeeping in Bahrain
The National Bureau for revenue has made it mandatory for all the VAT payers to maintain proper books of accounts relating to the taxable business transactions. Though NBR has made this mandatory for tax purposes, accounting and bookkeeping in business have multiple benefits.
A bookkeeping service involves keeping financial records and transactions chronologically. Since the introduction of various laws, maintaining the books of accounts has become a mandatory compliance requirement, apart from tracking the receivables and payables.
Accounting is the language of business that is used for communicating the financial information of an enterprise. It is the art of recording, classifying, and summarizing financial transactions and interpreting the results thereof. The accounting process involves the analysis of financial reports for the purpose of making business decisions. It provides you with a better understanding of actual business profitability and cash flow.
Benefits of Accounting and Bookkeeping
Accounting is a source of information to the stakeholders of the business. Every step-in accounting generates valuable information for its users. A few of the primary benefits of accounting is detailed below:
Maintaining Systematic records of business transactions:
All the financial transactions are maintained systematically through the books of accounts. Numerous amounts of varied transactions such as sales, purchases, receipts, payments, etc. that take place in the day-to-day operations of a business are recorded in a systematic manner. Proper and complete records of all business transactions are kept regularly. This acts as evidence and also enables the verifiability of transactions.
Depicting financial position of an entity:
Accounting provides a proper record of the assets owned by the business and its liabilities. Thereby it helps to ascertain the financial position of the business at the end of every accounting period. The proper recording of assets and liabilities of the business is ascertained by the preparation of the Balance Sheet.
Calculation of profit and loss:
Accounting provides the information about the net results of the business operations periodically. One of the major objectives of accounting is to ascertain the profit earned or the loss sustained by the business. This is ascertained by the preparation of the Profit and Loss account for the period.
Ensures statutory compliance:
Proper accounting systems assist the business in addressing its statutory compliances. Accurate accounting information enables businesses to file their VAT return without any error. It enables the business to accurately pay its Output VAT liability and claim the Input VAT incurred without missing any data.
Providing significant accounting information to the stakeholders of business:
The stakeholders of the business include the owners, the management, potential investors, creditors, banks, government, etc.
The accounting helps the stakeholders in the following ways:
- The owners/investors can use the data available through accounting to identify whether they are getting a satisfactory return on the investment made. They can also use it to assess the financial health of their company.
- The directors or the managers can use them to make both internal and external comparisons of the accounting records in order to evaluate the performance of the business. They can compare the financial performance by comparing the data of the current year with that of the previous year of the same company. Also, they can compare the financial position of the company with the industry figures in order to ascertain the company’s performance as compared to its competitors.
Management is also concerned with ensuring that the money invested in the company/business is generating an adequate return and that the company/business is able to pay its debts and remain solvent.
- The creditors or even bank is interested in knowing the credibility and liquidity of the company, which is the ability of the company to pay its debts as they become due. This can be assessed by analyzing the financial statements of a company.
- The prospective investors use the financial data to assess whether or not to invest their money in the company.
Benefits of Outsourcing Accounting and Bookkeeping Services in Bahrain
Access to the expert team of accountants.
A highly trained accounting professional will be provided for the company. The highly experienced professionals will possess specialized knowledge in all areas of business. Hence, outsourcing the accounts can enjoy the advantage of having an expert team to take care of your accounting function and to ensure the continued success of your business
Hiring a team of quality accountants and training them can be expensive for many businesses. Retaining such talented accountants can also be very difficult as the needs of the businesses can change from time to time. By outsourcing the bookkeeping services, all these processes are transferred to them at a fixed cost (No visa cost and other benefits) which is obviously cheaper than hiring an accountant.
The business environment is changing every now and then. The laws of a country also change every year. By outsourcing the accounting and bookkeeping services, you are partnering with companies who have already updated themselves with these changes, and hence, they can get you to access to the changes. This allows you to free up time and focus on other areas of business functions that add value to the business.
Benefit from up to date financial position
Most small and medium businesses sort to cash-based accounting as it is easy and time-saving. That is, they record income when the cash is received and expenses when the cash is paid. Hence, they are unable to assess the true financial position of the business as the receivables and payables are not accounted for. The outsourced experts use accrual-based accounting, and the true financial health of the business can be assessed. This helps the management in arriving at a well-informed decision and cater long term success of the business.
By outsourcing accounting and bookkeeping services, the business can be assured of receiving professional services, complying with all Bahrain Laws and requirements.
We, at Emirates Chartered Accountants Group, have qualified accountants with experience in different industries. The Accounting and Bookkeeping Services in Bahrain that we provide will ensure you have financial records that comply with Law and strategic financial guidance, helping you grow your business to greater heights. We understand that every business is unique, and the financial requirements vary accordingly. In order to meet the different needs of a business, we offer the following services:
- Account and Bookkeeping service
- Backlog Accounting service
- Accounts Supervision
- Accounts Reconciliation
Accounting and Bookkeeping Services in Bahrain