About VAT in UAE

The UAE  has levied Value Added Tax (VAT) from January 2018. The rate of VAT will be 5 per cent.VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue. Reach Online VAT Accounting Software -save cost – connect multiple branches instead of Tally erp 9.0 is discussed below.

Implication of VAT on individuals

VAT, as a general consumption tax, will apply to the majority of transactions in goods and services. A limited number of exemptions may be granted.

As a result, the cost of living is likely to increase slightly, but this will vary depending on an individual’s lifestyle and spending behaviour. If an individual spends mainly on those things which are relieved from VAT, he is unlikely to see any significant increase.

The government will include rules that require businesses to be clear about how much VAT an individual is required to pay for each transaction. Based on this information, individuals can decide whether to buy something.

Implication of VAT on businesses

Businesses will be responsible for carefully documenting their business income, costs and associated VAT charges. Businesses that meet the minimum annual turnover requirement (as evidenced by their financial records) will be required to register for VAT. Businesses that do not think that they should be VAT registered should maintain their financial records in any event, in case the ministry needs to establish whether they should be registered.

Registered businesses and traders will charge VAT to all of their customers at the prevailing rate and incur VAT on goods/services that they buy from suppliers. The difference between these sums is reclaimed or paid to the government.

Steps to be taken by Business to be VAT ready

Certain key measures to be ensured by the management of the company when doing business under VAT in UAE. Important amongst them are –

1. Proper documentation and maintenance of records
2. Inventory control
3. System readiness
4. Tax points
5. Timely filing of VAT return and payments

1. Documentation and Record Maintenance

It is highly essential for the management of the company to ensure that proper documents with minimum contents required for each such document, as specified by FTA or in proper format are required. For instance, Tax invoice requires certain minimum contents to be specified there in at the time of raising the invoice. For VAT compliance all the relevant documents and records required for raising the invoices to customers on supply of goods or services, purchase invoices and related documents from suppliers with their TRN no. (for local purchases) to claim input credit, Tax credit note, records of export of goods and services, records relating to import of goods and services, agreement with suppliers and customers etc. need to be preserved at least for a period of 5 years.

2. Keep track of your inventory for VAT

Under VAT concept the input tax you paid at the time of purchase of raw material or semi-finished or finished products can be claimed/set off / recovered against the output tax payable which ensures that no burden on the company’s cost of operations. For confirming the same, the management of the company has to ensure that all the items in the inventory whatever stages or form be, properly maintained and controlled, which otherwise also quite necessary to run the company’s operations successfully. Then the question arose – what is the status of the inventory on hand (closing stock as on 31-12-2017 or opening stock as on 01-01-2018) at the effective date of commencement of VAT implementation by Federal Tax Authority (FTA) in UAE from 01-01-2018

It may be noted that input tax which paid at the time of purchases only can be claimed/recovered against output tax payable. For items purchased before 01-01-2018, no VAT is applicable and paid, hence there is no question of recovering any tax paid at the time of procuring inventory. Whereas all purchases of inventory from 01-01-2018 for which tax has been incurred can be claimed against output tax payable to the government unless the entity is under the tax-exempt category.

For claiming the input tax credit, proper documentation and record maintenance is highly important to prove before the tax authority (FTA) at any time in the future. The FTA may request those details within next 5 years after a transaction takes place. In order to have proper clarity of details and information, it is always better for the entities to have correct details of inventory before 01-01-2018 and on or after 01-01-2018. This will facilitate the management to have clarity of information whether the tax is incurred on the inventory at hand, its recoverability, and tax reconciliation at the time of filing return.

From January 1, 2018, onwards, the management of the Company should be in a better position to ensure that all inventory purchases are properly tracked, and all input taxes paid are recovered in the same tax period, by ensuring that purchases are made from a tax registered supplier.

3. System Readiness – Accounting system and proper accounting

One of the most important steps, management of the companies  should ensure while entering tax regime is to have a proper accounting system in an accounting software. It should be better if it is in a reliable, user-friendly and one which best suits the needs of the business. Keeping records manually (without double entry system) or excel based record maintenance will be risky and they are not as per accounting standards. The person who records the entries in an accounting system preferably should be a good accountant, with reasonably sufficient knowledge of accounting and related standard accounting practices. If the person who is going to record the transactions are not from an accounting background or not a good accountant, support from good accounting or audit firm should be ensured for proper accounting and timely filing of return for VAT compliance. Security of the accounting system also to be ensured by taking timely backup data preferably, daily.

4. Tax Points

While carrying out the business, most of the transactions (depends upon the nature of business) attract VAT liability. A thorough understanding of all the transactions in the business is required to identify the point of Taxation.  Management of the company again, as to their nature of the business, needs to see that all tax events at the time of supply of goods or provision of services are properly taken care of as per VAT law. Same is the case when one is procuring of goods and availing of services to ensure that taxes are properly paid or not unnecessarily paid when dealing with the registered suppliers. Then only the liability of collecting VAT from the customers and payment to Govt. can be ensured after recovering the VAT Input Credit available.

5. Timely Filing of VAT return and payments

Registered Businesses and Individuals in the UAE have to file for their VAT Returns and payments on time. The filing of VAT return for Business entities would depend on their turnover for which it is expected to file every month (12 times a year) or every quarter (4 times a year) as decided and communicated by FTA while allotting TRN. VAT Returns are of utmost importance as it is the authentic record of tax compliance by the registered persons for discharging their liabilities in this regard. These records can be used by the FTA for auditing purposes if required in future. The procedure to file for VAT returns will be an online process in the FTA portal (www.tax.gov.ae )where one will find Return Filing option and with the use of TRN and password, one will be able to access it.

Reach Online VAT Accounting Software will prove to be the perfect partner for your business in the VAT era.

Reach Online VAT Accounting Software -save cost – connect multiple branches instead of Tally ERP 9.0

REASONS TO CHOOSE Reach  Accountant

• Cost Cutting and Reduced Overhead Expenses
• Time Saving and Improved Procedural Efficiency
• Getting your Accounting performed by a Team of Professional Accountants
• Quick and Remote Access to your Financial Data at your Ease
• Connect to multiple branches with real time data.
• Increased Automation using Cloud-Based Technologies

Flaws Of Tally ERP 9.0

Tally ERP 9 is powerful and feature-rich. However, Tally lags on user-friendliness. Maintaining and accessing accounting information from Tally ERP 9 is a breeze for those trained and experienced on the software, having accounting knowledge. Whereas, Tally ERP 9 can be a nightmare for those not trained or accustomed to the software. Therefore, Tally ERP 9 is suitable only for businesses with dedicated accounting professionals. Entrepreneurs not having Tally experience would also find it hard to access and understand accounting information or reports or data generated by Tally.

Tally ERP 9 is offered as a software.A PC running Windows XP or higher is required. Tally ERP 9 is a works as a stand-alone software and the accounting information is stored on the PC’s hard-drive. Tally ERP 9 does have powerful remote connect capabilities allowing persons not connected with the PC storing the accounting information to work on the same data from a different PC running Tally. Tally ERP 9 presently doesn’t offer any iOS or Android App and is thus accessible only through a PC running Tally ERP 9.

Using or extracting information from Tally ERP 9 will be a challenge for those not trained or experienced on the software.

Need a lot of outside works. not easy to export data to another program or import data from another program.

On site training and customer care by company. Add ons are very difficult to understand in software. Support for add on facility like auto signature , is out sourced and the details are not updated in the system.

There is no web version only desktop version available,in case you don’t have access to your computer then the work cannot be completed. Cloud services not available in Tally ERP 9.0 this being one of the major drawbacks data is not cloud synced so if you lose your computer or if the hard disk crashes, your data is lost.

Access or operate business from anywhere is not possible as it is not cloud computed.

No multiple connectivity of  branches at the same time on same platform.

Some advance features missing like auto bank statement download, regular auto posting , mobile or Tablet not supported.

Remote Working is slow takes time to understand the complete system  No Maker – Checker system

User Interface is complicated, user guide is not so easy to understand ,error messages does not specify or give suggestions to rectify it.

Reporting tools should be added in tally giving various reports of department, functions etc

Thus Reach Accountant a cutting edge over Tally ERP9.0

Benefits of Online Accounting Software for Businesses

Most business owners have a number of tasks on their plate each day in order to help the company stay successful.

A solution that many businesses are starting to use is online accounting software. These applications make the process of calculating revenue, cash flow, and payroll easy and accurate. Your company’s financial information will be secure, but you can access it from anywhere with the correct security code. Simply put, online accounting software is a great investment for any small business.

Here are some of the benefits a business can discover through online accounting software:

1. User Friendly

Online accounting software is generally easy to learn and use in day-to-day business operations. Once it is set up, you can keep your accounts up to date with a few regular data entries – information from bank statements and invoices can be automatically uploaded and processed into the correct categories. This means that you and your employees don’t have to worry about advanced accounting details – you can do what you need efficiently with a few clicks.

2. Security

Since online accounting software stores data online, some business owners might be worried about security. However, security is a top priority for online business software companies. In addition, the online connection makes it easy to invoice clients, link up with bank information, and assess your business’ financial health wherever you are.

3. Cash Flow

Effectively managing your cash flow can help your business save money. Online accounting software makes it simple to determine incentives for employees and discounts for creditors or customers. In addition, the manager or business owner can view profits and losses in a comprehensible way.

4. Invoicing

One of the most important aspects of any business is invoicing, because it brings revenue to the company. Creating invoices with online accounting software saves you time and prevents losses caused by human error. You can even send invoices directly to clients through email to save paper and stamps.

5. Accuracy

For all types of business computations, accuracy is essential. Mistakes made in calculations can possibly lead to significant losses or other issues. Online accounting software keeps you from making these mistakes.

6. Cost

One of the greatest benefits of online accounting software is the cost savings. For small businesses running on tight budgets, hiring an accountant can be expensive. Even running software on an in-house server can end up costing a lot with all the upgrades and system tools. When a business buys online accounting software, it only has to worry about paying for the software and training employees to use it. And since many online software companies run on subscriptions, you’ll only have a small fee each month instead of a large one-time purchase.

7. Productivity

Paperwork can be tedious and tiring, causing employees to get distracted and become less productive. Online accounting software is much more efficient than filling out paperwork because half the work is already done. This helps employees be much more productive than they were before.

8. Opportunities

Many types of online accounting software help businesses track trends, losses and profits far better than they could in the past. This may help the business discover new opportunities to improve revenue.

9.Inter Connectivity of Branches: As online accounting software are cloud based company branches have the option of being inter connected with one common real time data of the business such as current stock held, any transaction details which needs to be shared among all the branches instantly any many other details for the growth of the business.

Top Features of the Reach OnlineVATAccouting Software are:

• Accounting Management: All functions relating to accounts are inbuilt with the software. You can manage your Accounting Ledgers, Bank & Cash Operations, Purchase & Sales Estimates, Warehouse Allocations, Expense Recording, Expense Grouping, Payments – Part or Full, Journal Entries, Income and loss a/c, Balance sheets, Receipts – Part or Full, Contra Entries, Financial Reports, Day book.

• Tax Management: Our accounting Software automatically calculates the taxes relevant for every bill created. The Software is designed as per the government norms for calculation of VAT. It also has the option to add any number of taxes relevant to the business. In case of change in tax percentages a change it in the software on your own. All you have to do is add your tax percentage and our software will calculate the taxes automatically. This multiple tax scheme can also be applied to multiple products on a single purchase.

• Income Management: The Company can create Quotations then the same can be converted as a Sales order or Pro-forma invoice or Invoice. From Invoice you can create Receipts as well. Accountants will be able to know what payments have been received and what are pending in the reports. You can also set reminders for receiving payments.

• Expense Management: You can create Purchase Orders then the same can be converted as bill or payments. You can also create Debit notes for purchase returns. Accountants will be able to know which purchase bills have been paid and which are pending in the reports. You can also set reminders for making payments.
• Invoicing: Generates VAT compliant invoice of the company in the specified design as requested by the client or can choose from the available templates in the software. It also converts quotes to invoice .One of the features is the software can convert the Foreign currency invoices to base currency and further calculating the VAT at UAE standard rate.

·         Print Tax Invoice In Arabic: Reach software lets you print invoices in Arabic, English or both, as per the mandated guidelines of GAZT and FTA.

• Auditor View: Full-fledged Financial reports, Tax reports VAT reports, read process by auditor, with e-filing options, PF & ESI Reports, Tax Consulting Modules are some to be named.
• Check Post for VAT returns: As the software has been designed exclusively to aid individuals and entities to be VAT compliant in UAE, the set of rules and regulation laid by FTA (Federal Tax Authority) of UAE are embedded in the software. Hence any process error will be popped up by the application can be viewed .For instance wrong Tax Registration Number, incorrect taxable figure, wrong taxation period.
• Automatic Update on Tax legal Sections: As the Reach software are cloud computed software gets upgraded to update any revised tax laws and section if any in future.
• Computation Of VAT Returns: The software is inbuilt with all the detailed crucial information  on tax computation Tax Assesee can  fetch all the details of all the taxable transactions It lists down transactions which are included and excluded in the VAT return  calculate input tax, reverse charge and output tax to avail claim if any 

• Filing Of VAT Returns: The registered businesses in UAE are required to generate the VAT return File from their accounting software, login to the FTA’s e-tax portal and upload the return file. Reach VAT software is designed to ease the process of filing returns and comes under the purview of FTA prescribed set of rules and regulations.
• VAT Reports etc.
• Calculate VAT automatically.
• VAT support in Sales, Purchase, Sales and Purchase returns, Journal entries.
• Generate Federal Tax Authority compatible tax reports.
• VAT Paid (charged by suppliers) and Vat Collection (Charged to customers) Analysis.
• Transaction wise details of VAT paid and VAT collected.
• Attach every Vendors/Customers VAT number and other details.
• VAT supported for Goods (stocked) and Service (non-stocked) items.
• Online application accounting.
• VAT Account Reconciliation, VAT Collection & VAT Paid analysis report.
• Report export to excel and other standard formats.
• VAT returns statement compatible with Federal Tax Authority standards.

Online accounting VAT software enables you to file vat returns, manage accounts and other business operations from any geographical area be it at the comfort of the house.

• Receipt: Receipts can either be manually entered or imported it in excel format easily.
• Payments: Payments can either be manually entered or imported it in excel format easily.
• Multi Company: Manage business through comfort of the smart phone.
• Multi Branch: Gives the option of owning the business individually. No matter how widespread your organization becomes, you need to work hard to retain team cohesion and the philosophy that everyone is on the same team regardless of where they work

Reach Accountant Online VAT Accounting Software addresses the below issues which a jewellery store with multiple branches may face.

1. Out-of-site-out-of-mind syndrome. When things get busy at your primary location, it can be hard to give your employees based at other locations the time they deserve and training.
   2. Loss of spontaneous communications.Because you do not see your employees of different branches at the same time and also fail to get real time information, there is very little natural or unplanned communication.
   3. Attenuated logistics. Anything that cannot be sent electronically, must be mailed, which causes time delays and increased effort.
   4. Complicated work assignments. It is harder to perform certain types of jobs or collaborate on them when employees are based in remote locations.
   5. Lack of team cohesiveness. Your team members will not know each other as well. This can easily be taken care by ReachVAT software
   6. Concerns over general supervision. If you have a remote office that has a clients visit, it’s virtually impossible to see if your employees are arriving on time, working appropriate business hours  or wearing proper business attire.

To tackle these and other challenges, then, organizational leaders need to focus on three key areas: systems, technology, and communication.

• All these challenges can be easily resolved by Reach VAT Accounting Software.
• Tally Import: Tally files can be easily imported to Reach Software of various periods and manage business easily.
• Auditor’s Report: Full Financial Report are available,Read process by Auditor,Tax Reports,VAT Report with e-filing options,PF & ESI Reports,Tax Consulting Modules are some featuress mentioned.
• Mobile Application: Access business information through tabs and android smart phones, pick photos of expense vouchers and attach to expenses, daily profitability and other key reports can be viewed on phone.
• Bank Synchronization: Bank Statements can be imported in to Reach software through excel files.
• Security: There is complete security of data stored in the servers. Data can be accessed and control by creating access restriction. One time password facilities also ensures a check in the log in to the website.

• Run Business from anywhere: The business can be run access data from anywhere at your comfort. Just like checking mails from the laptop or systems.

• Free and Automatic Upgrades: At Reach Accountant you will be provided free services of upgrading the software frequently with new features and use it absolutely free. 

• No investment in expensive hardware: The software is browser based. It just requires internet connection which can be connected to multi computers without using LAN and servers. 

• API: The client can integrate the existing software with Reach accounting application , 

• Automatic Data Backup: Reach stores all the data in servers offsite with regular backups. Hence business information is safe and secure

·         User Interface & Complexity:The software is designed to make its use friendly and easy,no cumbersome process to operate the application and software.

• Scalability:It is an VAT accounting software which can scale with your business needs. . Some software companies offer only one version of the product and some have progressive versions depending the business type or size. Reach Accounting software offers both integrated an entry level version as well as a feature rich version which you might not need for the current business processing but will definitely need in future for business development.

Business Intelligence Dashboard: The software has a feature of  providing you key statistics of the business at any given point of time.The dashboard displays work status, profit and loss, expenses graphically.It also features  best Selling Executive, Highest Selling product, Largest value customer for the month. Every night the client gets a SMS summing up the entire sales , expenses ,case production ,and stock value for the day