Small businesses are the primary growth drivers of the world of commerce since the last decade.
Entrepreneurs look for the right opportunity and instantly act on them to build the perfect venture
for themselves. But the job of small business owners is not an easy one. It is a rollercoaster ride with
lots of ups and downs making it difficult for small businesses to sustain and make it to reach the
moments of glory. An entrepreneur strives to tackle the big problems and dream of the greater
picture as they get engrossed in countless hours of hard work and diligence. However, they often fail
when it comes to the most vital aspect of the small businesses which is Maintaining the Finance and
Accounts. Finances are a major aspect concerning all businesses and the failure to efficiently handle
it often results in failures and facing roadblocks difficult to surpass. Accounting mistakes can greatly
hinder the growth of small businesses and hence it is very important to understand the right way to
maintain the financial records and Accounts.
There are various ways in which small businesses can combat accounting and finance challenges and
the following 5 are the main aspects:
1. MAINTAIN ACCURATE ACCOUNTS
It is essential to maintain accuracy in bookkeeping records for transactions related to the
business. The accurate and up to date accounts make the day to day tasks easier to handle
and track in a less stressful manner. Careful tracking of the finances helps track the current
financial status of the business, prevent theft and fraud and help being prepared to account
for tax returns. It keeps the owners informed about the status of creditors, debtors and
expenses thus resulting in smooth handling of the budget and resources.
2. INVEST IN LATEST ACCOUNTING SOFTWARE
With the advent of digitization and the penetration of apps in the day to day space, there
are numerous efficient and simple softwares available in the market for smooth financial
planning for the small businesses. Such Accounting softwares help to keep the owners
updated and guided with the accurate financial information of theie business. The owners
can well organize the revenues, expenses, invoices, receipts, vendors, and employee list
through this softwares and instead focus more on the other aspects of business leaving the
accounting worries aside.
3. RECRUIT A PROFESSIONAL TAX ACCOUNTANT
Small business owners may be on a constricted budget and hence be reluctant to spend
additionally on professional tax accountants. While they may prefer to handle taxation
issues on their own, not hiring the right professional tax accountant can actually cost them a
lot. The professional accountants possess specialized experience and knowledge required for
tax saving and hence benefit the business monetarily. They are also updated on the ever-
changing tax laws hence capable enough to offer the right and desired advice to tackle the
potential tax hikes.
It is therefore very crucial to hire them in order to gain the best organized information for
expenditure incurred on business. Remember, good professional bookkeeping is wisdom
when it comes to investment that will continue to reap good results.
4. MAKE PROPER FINANCIAL PROJECTIONS AND KEEP CASH RESERVED FOR THE EMERGENCIES
It is very crucial for entrepreneurs to make proper financial projections for each year for a
minimum of 3 years. They must be able to predict the amount they expect to make from the
venture they undertake and keep a proper track of the budgets and simultaneously track the
minute details such as staffing plans and equipment expenditures.
In spite of efficient planning of the finances of a business, the future of financial status of
small businesses is often uncertain owing to unpredictable circumstances that they may not
be prepared for. Owners may often fail to sustain due to improper cash reserves. To be
believed, it is wise to invest a small amount of profit made in the business in a cash reserve
for the future. One must keep a track of this reserve on a quarterly basis and make sure that
it is enough to keep the business running safe for at least six more months at the times of
5. SET APART BUSINESS AND PERSONAL EXPENSES
Newer entrepreneurs often fail to understand the importance of a separate account for the
business and personal expenses. They mostly end up using the personal account for business
purpose and end up with lots of confusion and mess leading hassles that lead to improper
profit results. This also creates lots of chaos while maintaining the records of the
transactions and dealing with the accounts and taxes of the business.
It is very important to use a separate bank account for the business to avoid such stress in
Maintaining the finances and accounts may seem complex to most of the small business
owners but effective planning can simplify the task greatly. The above-mentioned tips are
easy to follow an equip businessmen with the capability to keep the business afloat even
during the times of tough financial crisis.
Thales Group, a French multinational company focusing in aerospace, space, defense, ground transportation and security sectors, expressed its keen interest in the Kingdom’s military productions.
The group will focus on assisting Saudis in localizing activities in the defense industry, security and civil businesses through training and knowledge-transfer programs, noted Patrice Caine, chairman and CEO of Thales Group.
Thales Group, which operates throughout the Kingdom have over 700 employees within the country of which 30 percent are Saudis. It has offices located in Riyadh, Jubail and Jeddah.
Thales is already involved in the production of certain products exclusively for the local markets in collaboration with Saudi companies. Its move to localize part of its manufacturing sector in the Kingdom would be a great contribution to the Kingdom’s economy, in line with Vision 2030, added Caine.
Earlier in May, when Saudi Arabian Military Industries (SAMI) was launched, Caine called it a great initiative and expressed the group’s desire to work in collaboration with it.
Though the group has investments in several sectors globally, in Saudi Arabia, 60 percent of its projects are related to defense. They play a major role in providing security to the holy sites of Makkah and Madinah.
With the Middle East defense market expecting to reach $180 billion by 2020, Thales is rapidly growing in the region. Saudi Arabia and UAE are among the top 10 countries spending on defense.
Saudi Arabia is one among the top 20 countries in the world that is actively working towards improving the business sector, and is ranked second in the world’s high-income countries for business reforms, as per World Bank Group report.
Several of the business reforms adopted by the Kingdom recently played a huge role in boosting investor confidence and attracting investors and entrepreneurs to the region.
For the first time in its history, the Kingdom nailed 6 out of 10 axes determining the progress in ease of doing business for 2018. It had achieved only 4 reforms in 2009 and 2011. Few of the powerful reforms in 2018 include protecting minority investors, enforcing contracts, starting a new business, cross- border trade, registering property and settling bankruptcy.
According to the report, Saudi Arabia also ranks tenth globally in protecting minority investors. This will play a key role in attracting foreign investors to the country.
Not only that the Kingdom was able to reduce the number of hours required to pay taxes from 67 to 47 hours, it has also taken measures to assist payment of taxes by improving the electronic filing system to raise tax returns and pay taxes.
Cross-border trades have undergone drastic changes by reducing the number of documents required for customs clearance and reducing the processing time by nine days for imports and exports.
The Kingdom has also taken reforms to simplify registration procedures which will boost the efficiency of land management systems.
Taysir, a committee designed to improve business performance in the private sector and to encourage their participation in economic development in line with Vision 2030, played a crucial role in modifying the business reforms of the country.
The Ministry of Labor and Social Development (MLSD) and the General Authority for Zakat and Income Tax (GAZT) signed a deal on information sharing between the two entities.
The agreement was signed in the presence of Deputy Minister of Labor and Social Development Ahmed Al Humaidan, and governor of GAZT, Suhail Abanmi.
The agreement aims to improve cooperation between MLSD and GAZT and to implement an ideal data sharing mechanism between them. It includes exchange of information for data verification, follow up and data-updation. This would help in integrating error free data with the systems and thereby facilitate e-services.
The agreement is an addition to the ministry and GAZT’s strive towards raising awareness and organizing educational programs to highlight the importance of submitting zakat and income statements by establishments in order to avoid penalties.
With only 52 days to go before the implementation of Value Added Tax (VAT) in Saudi Arabia, the General Authority of Zakat and Tax (GAZT) reminded businesses and companies to ensure that they are well-versed with the rules and regulations of VAT.
VAT will be implemented in the Kingdom on January 1, 2018. Rules and regulations related to VAT have been published in the tax’s official website, vat.gov.sa. It also provides tools to aid businesses to prepare for the application of VAT, along with visual aids, registration and VAT application information, and the list of goods and services subject to VAT.
According to the guidelines published in the website, a standard VAT rate of 5 percent will be charged at every level of the supply chain for majority of goods and services. It also specifies few goods and services that are zero percent rated, exempt and out of scope.
Distribution of medicine and medical equipment identified by the Ministry of Health and the Saudi Food and Drug authority, supply of gold and silver for investment such that they guarantee at least 99 percent purity and are tradable in the Global Bullion Market, and exporting goods outside of GCC region are all subjected to zero percent VAT according to the website.
The new regulations stated that financial services involving money or securities, providing credit or credit guarantee for customers, life insurance and reinsurance contracts, and renting of residential property are all exempted from VAT.
Government services like issuance and renewal of passports and driving licences are out of VAT’s scope.
Moreover, businesses implementing tax before the scheduled date will face serious consequences, reminded Abdulrahman Al-Hussain, spokesperson of the Ministry of Commerce and Investment.