Accounting Reconciliation Services in the UAE
Nearly all businesses (large or small, corporate or societal) in UAE require Accounting Reconciliation Services. But why is that? In this article, we will discuss the use of accounting reconciliation services, as well as:
- Bank Statement Reconciliation Service
- Vendor Reconciliation Service
- Customer Reconciliation Service
- Inter-company Reconciliation Service
- Prepaid Reconciliation Service
- How can Mubarak Al Ketbi Chartered Accounts help you regarding Accounting
Reconciliation Services in UAE?
What is Accounting Reconciliation?
Accounting Reconciliation is the process of reconciling accounting records between two separate ledgers / books of prime entry / suppliers & customers / businesses. It ensures that two balances of the same entity in two different accounts are the same. This eliminates errors in the accounts of the business, allowing the business to prepare more accurate financial statements to help assist the owners in making business decisions. This is especially important in the UAE, where having incorrect and fraudulent accounting records can lead to heavy fines and even revokal of a business license!
This article will discuss the different types of Reconciliation Services that Mubarak Al Ketbi Chartered Accountants provides.
1. Bank Statement Reconciliation Service:
Businesses that undertake a large amount of transactions using cash/cheque from the bank often have to reconcile their Bank Statement with their cashbook. Especially for larger businesses, this can be very time taking. The best choice is to outsource this work to trusted accounting and auditing Services in Dubai companies, like Mubarak Al Ketbi Chartered Accountants.
The documents needed for this process are:
- Bank Statement
- Cashbook
The accounting balances for each document are equated and balanced. Correcting entries are made to reconcile the difference in the general journal.
The advantages of conducting a Bank Statement Reconciliation is:
- Improves cash-flow forecasting.
- Spots mistakes made in the cashbook, eg. double payments, missed payments,
payments with incorrect values, etc. - Helps in year-end closing of accounts
- Improves the accurate of financial statements
- Helps to keep better track of trade receivables and trade payables.
2. Vendor Reconciliation Service:
Reconciliation between a business and its supplier can get more difficult over time, especially for large businesses. This happens when the business creates a high number of transactions between the business and the supplier.
The documents needed for this process are:
- Ledger a/c of the supplier
- Debit Notes to supplier
- Credit Notes from the supplier
- Invoices from the supplier
- Bank statements to verify transactions
- Contracts/Agreements between customer & supplier (if any)
The advantages of conduction a Vendor Reconciliation Service through a qualified accounting team like MAKCA are:
- Ensures timely payment to suppliers
- Reduces chance of argument between business & supplier over payment dates,
amounts, etc. - Helps to create a relationship of trustworthy trade between business & supplier.
- Ensures that amounts paid/received are correct as agreed.
- Ensures that goods received and returned are correct as agreed
3. Customer Reconciliation Service:
Reconciliation between a business and its customer can get more difficult over time, especially for large businesses. This happens when the business creates a high number of transactions between the business and the customer.
The documents needed for this process are:
- Ledger a/c of the customer
- Debit Notes from customer
- Credit Notes to customer
- Invoices to customer
- Bank statements to verify transactions
- Contracts/Agreements between customer & supplier (if any)
The advantages of conducting a Vendor Reconciliation Service through a qualified accounting team like MAKCA are:
- Ensures timely income from customer
- Reduces chance of argument between business & customer overpayment dates,
amounts, etc - Helps to create a relationship of trustworthy trade between business & customer
- Ensures that amounts paid/received are correct as agreed
- Ensures that goods sold and returned are correct as agreed
4. Inter-company Reconciliation Service:
Transactions between the Head Office of a company and it’s branch locations/franchises/joint ventures can often become complicated in the long run if a lot of transactions are made.
The documents needed for this process are:
- Contracts/Agreements between branches (if any)
- Accounts from branches/party
- Accounts from Head Office / Company
- Credit Trading documents (invoices, credit notes, debit notes, bank details, etc.)
5. Prepaid Reconciliation Service:
Prepaid expenses are any kind of expenses that are paid by the business in advance. There are not recorded yet, but they are treated as a current asset in the balance sheet.
Once the benefit of the prepaid expense is realized or incurred by the business, then it is recorded as an expense.
Tracking all of the prepaid expenses of a business can be tricky. Prepaid Reconciliation Services can help to reconcile the errors and adjust the entries for these types of expenses.
The advantages of a Prepaid Reconciliation Service is:
- Ensures that the auditing process is proper
- Improves the accuracy of the financial statements
- Helps for decision making for the business owners (by understanding the
financial position of the business better) - Reduces error in the accounting records
How can Mubarak Al Ketbi Chartered Accountants help my business?
As you have read, it is essential to obtain proper accounting reconciliation statements. One of the leading accounting and auditing firms in the UAE is Mubarak Al Ketbi Chartered Accounts. We have over 10+ years of experience and have served over 2000+ happy clients. We provide services in Corporate Tax Services UAE, Auditing, Accounting, VAT Services in UAE and more. Contact us today, and we guarantee you professional services!
