Accounting and cash flow management most challenging aspects of managing business finances, according to Sage survey
Business management solutions provider Sage, recently hosted an accounting roadshow across Dubai to raise awareness of value-added tax (VAT) regulations and compliance requirements.
As part of the roadshow, Sage held VAT-readiness workshops at start-up incubators and co-working spaces and conducted surveys with over 50 entrepreneurs to understand the challenges they face with regards to business finances. The survey found that 37 per cent of start-ups and small and medium businesses struggle the most with accounting and cash flow management, followed by 14 per cent struggling with reporting of expenses, and 12 per cent tripped up by billing and invoicing.
Regarding VAT, 76 per cent of the respondents were concerned about its impact on their businesses, and of these, 57 per cent said their biggest concern was their lack of understanding about VAT regulations and procedures, followed by 18.4 per cent concerned about returns-filing. Moreover, the majority of entrepreneurs surveyed also do not have a VAT-compliance accounting system in place.
“It is only natural that small businesses are concerned about the financial and operational impact of VAT, especially since a tax environment is new to them. Business owners realise that if they are not prepared for VAT, it could impact various aspects of their business, from cash flow to operations, which could result in fines. Fortunately for UAE businesses, the tax authorities have been proactive in offering more clarity on regulations, and they have shown flexibility, by waiving penalties for nonregistration and extending the timeline for filing the first VAT returns,” said Mansoor Sarwar, Director of Technical Services at Sage.
The majority of the respondents offered positive feedback about the UAE as an entrepreneurial hub, though a few also raised concerns such as rising costs and overheads of running a business.
“Business owners who worry if they are not effectively managing business finances or VAT-compliance should try to find a smart accounting product capable of automating these processes. This will allow entrepreneurs to focus on growing their businesses instead of getting bogged down by administrative tasks,” added Sarwar.
Earlier in March, Sage Accounting was one of five Sage products that received accreditation from the Federal Tax Authorities after undergoing a stringent vetting process.