Small and medium enterprises (SMEs) are an integral part of any economy and the UAE is no exception. However, they need to grow and thrive in a very competitive environment. Hence, they require funding from time to time. However, this becomes difficult if the accounts are not properly audited and maintained by the SMEs. Here are various ways in which auditing firms can help SMEs in securing finance:

1. Accounts: The first requirement of a firm to secure funding is to maintain proper records of capital, assets and income. The balance sheet and profit and loss accounts provide a snapshot of the financial state of a business to a prospective lender. Most small businesses fail to have proper accounting systems and thereby become ineligible for funding.

2. Purpose of Funding: When seeking funds, the purpose has to be clearly mentioned. Auditors can assess the company and point out the requirement of funding- whether it is working capital, startup funding or expansion.

3. Repayment Capability: Lenders are concerned about the repayment ability of small enterprises. Auditing firms can identify the source of income, and key product or services offered. This enables the lenders to understand the cash flow in the organisation, and future growth prospects.

4. Anti-Money Laundering Compliance

Auditing firms will help SMEs to adhere to compliances of Know Your Customer (KYC) requirements of banks and lending institutions or Customer Due Diligence (CDD) measures. Creating a good borrower profile and meeting credit rating requirements are also vital for getting funding in Dubai. Such processes become simpler when assisted by experienced auditors. Companies must comply with the Anti-money laundering and Combatting Financing of Terrorism laws in force in UAE. Auditing firms can ensure that you comply with the norms and if there is something lacking in the documents, auditors will rectify and help in compliance.

Auditing firms of the 21st century are not just bookkeepers preparing accounts at the end of the year. They understand the business of the SMEs and the market in which they operate and help prepare plans for growth. For SMEs, it is essential to seek the support of an auditing firm with expertise in business valuation, taxation, management, accounting, compliance, and business process consultancy. Such firms have the capability to understand your business, industry and mentor SMEs in the right direction.

Please note that this memo is for information purposes only and should not be construed as an advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.

If you would like to discuss Tax & VAT services or ESR or CBcR , please drop us an email at info-oman@premier-brains.com or call us at +968 9808 1315 and /or +971 4 3542959.

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