Sage and Rakbank Join Hands to Support Accounting Needs of UAE Businesses
Sage, the market leader in cloud business management solutions, and the RAKBANK announced a partnership agreement. This would entail RAKBANK to offer Sage accounting software to support its Business Banking customers of all sizes and across all industries.
Through this partnership, RAKBANK’s business customers can benefit from Sage Business Cloud Accounting software at preferential rates. Sage accounting solutions will enable the Bank’s customers to easily manage their businesses in compliance with the Value-Added Tax (VAT). RAKBANK is one of the largest SME lenders in the UAE and is committed to the growth of the sector through strategic partnerships that provide efficient and convenient solutions to its customers. Five of Sage’s VAT accounting products were accredited by the UAE Federal Tax Authority earlier this year in March, and are on the Approved Accounting Software list.
On the partnership, Mansoor Sarwar, Director of Technical Services and Pre-sales at Sage Middle East, said: “RAKBANK is one of the UAE’s most dynamic financial institutions, and it has a dedicated focus on small and medium businesses. They are aligned with Sage’s vision – to help business builders realise their ambitions – especially as Sage also started as a small business and grew beyond what seemed imaginable. We are honoured to partner with RAKBANK, and together support every type of business in the UAE with their business finance and accounting needs.”
Commenting on the partnership, RAKBANK’s Managing Director of Business Banking, Dhiraj Kunwar said: “Many SMEs face difficulty in the accounting and cash flow management aspect of their business, especially with the implementation of the VAT. RAKBANK’s partnership with Sage will offer our Business Banking customers new features that meet all their VAT and accounting needs. As one of the largest SME banks in the region, we are delighted to have partnered with a company like Sage. This partnership is in line with our strategy of assisting businesses by offering them convenient digital solutions that support their exact financial requirements.”
In a survey conducted by Sage in the first quarter, 37 per cent of small and medium businesses stated that they struggle the most with accounting, and added that they were ill-prepared for complying with VAT regulations. “Entrepreneurs who are concerned about not managing their business finances or VAT effectively should look at implementing smart accounting products that are capable of automating the majority of these processes. Business owners should be focusing on their core purpose, rather than be burdened by administrative tasks,” added Sarwar.
UAE Banks Federation Launches UAE’s Financial Literacy Handbook for SMEs
In view of financial literacy’s critical role in the success of an economy and sustainable development of a society, the UAE Banks Federation (UBF), has stepped up its efforts to increase the level financial awareness in the country. For organizations, financial knowledge is the foundation for long-term growth as understanding business finance enables companies and business owners to use appropriate information to make effective decisions. Basing financial planning on proper knowledge and skills will prepare business owners to build a viable business that will scale and withstand Market and economic downturns.
Representing over 60 per cent of the country’s GDP and employing 42 per cent of its workforce, small and medium enterprises (SMEs) form the backbone of the UAE’s economy. SMEs, which make up 94 per cent of all companies operating in the country, account for a good share of the customer base of local banks, another cornerstone of the country’s economy. Given the enormity of the SME sector as an economic force, financial literacy skills of entrepreneurs have thus become of immense importance.
In response to the growing relevance of financial awareness and closely aligned with the increasing focus of the UAE government and banks in the country on financial education, UBF s releases a groundbreaking handbook, titled ‘Financial Literacy for SMEs’. Highlighting different aspects of business finance, including governance, financial management, access to finance and borrowing, debt management, the handbook seeks to equip business owners with knowledge and skills that will enable them to make sound financial decisions and ultimately operate their businesses successfully.
“In an increasingly complex financial environment, it is essential for entrepreneurs – particularly owners of SMEs – to have a strong grounding in the principles of business finance to keep their business afloat. SMEs play a critical role in an efficient and competitive economy, and a thriving SME ecosystem will positively contribute to a society’s economic stability and development” said HE Abdul Aziz Al Ghurair, Chairman of UAE Banks Federation.
“Financial education offers entrepreneurs a deeper understanding of business strategies and objectives, as well as the availability of financing options and support services. It also leads to proper financial planning, which enables small businesses to maximize their chances of business success by taking advantage of business opportunities and weathering business downturns. Taking into account the importance of financial awareness of businesses, the UAE Banks Federation has launched ‘Financial Literacy for SMEs’ handbook, which seeks to address various aspects of business finance to empower entrepreneurs with essential knowledge and skills to make sound financial decisions towards operating their businesses effectively.”
The handbook stresses that SME owners must acquire skills to distinguish between personal and business finances and possess sufficient knowledge of key accounting standards and book-keeping as well as legal and regulatory frameworks, rights and resources in order to become financially literate. Emphasizing the importance of knowing the right business structure, the handbook highlights different types of companies and various characteristics of robust and effective corporate governance framework, which is an indispensable building block in creating stable businesses.
Financing is the fuel on which a business runs and companies will require funding across various stages of their development and growth. The ‘Financial Literacy for SMEs’ handbook offers a comprehensive understanding of financial management, which includes managerial finance, book-keeping and accounting, financial statements, financial planning, as well as budgeting and forecasting.
From meeting daily operating expenses, to funding the expansion of business into new markets or products, companies encounter varied instances of the need for finance. The handbook offers an overview of main sources of finance available to SMEs, to keep their business afloat. It further details key factors that affect borrowing and invites the attention of SME owners on key considerations before seeking finance.
Business of all types and sizes establish relationships with banks and for SMEs, building a strong long-term two-way relationship is necessary to enable themselves to thrive in their business. The handbook highlights the importance of such relationships and how SMEs can benefit from establishing a rapport with banks. In addition, it offers tips on increasing financing opportunities and improving the chances of increasing credit limits for SMEs. Furthermore, the UBF handbook discusses ways to build a healthy credit history, which will help create a strong company-reputation and boost the chances of obtaining business loans from banks.
It is important for SME owners to manage debts to protect their business. The ‘Financial Literacy for SMEs’ handbook offers an in-depth insight into different aspects of debt management, and provides tips for identifying debt warning signs and effectively managing debt. Additionally, it sheds light on different types of fraud that can affect a business, including compensation fraud, invoicing fraud, skimming, and cheque fraud, among many others. Furthermore, the handbook offers important tips for SME business owners to prevent fraud.
SMEs are a key pillar of the UAE’s business sector and a driving force of economic growth and employment creation. However, the small firms have often found it difficult to secure credit lines as banks reduced their exposure to the SME sector after several SMEs failed to sustain in the business and repay their loans. With the objective of improving SME lending environment in the country, UBF has launched several initiatives including the ‘modus operandi,’ a mechanism to rescue SMEs in distress that meet specific qualifying criteria. The federation has consistently stressed for stronger market-wide support for SMEs, better auditing standards in the sector and improved due diligence by banks.
Dubai Investments posts 25% jump in Q1 net profit
Dubai Investments has reported a 25 percent jump in first quarter net profit, rising to AED362 million ($98.5 million).The company also said total income increased by 33 percent to AED927 million while assets rose to AED19.2 billion.
Khalid Bin Kalban, managing director and CEO of Dubai Investments, said the strong Q1 results were driven by the strategic acquisition of additional 50 percent stake in Emirates District Cooling (Emicool).
He added: “The company has a strong pipeline of ongoing real estate developments such as Mirdif Hills and is also working on several other projects and transactions which will continue to enhance shareholder’s value.
“These include launching a multi-asset class REIT expected to be listed on the local market, the IPO of Emicool and the establishment of the University of Balamand in Dubai.”He said the company is also targeting investments in sectors related to financial services, education, healthcare and entertainment.
The company’s portfolio currently includes 35 subsidiaries and joint ventures across a range of sectors. In March, Dubai Investments announced plans to lead a consortium of investors to launch Arkan Bank, a wholesale Islamic financial institution with an initial paid-up capital of $100 million.
Arkan Bank is applying to the Dubai Financial Services Authority (DFSA) for approval for a prudential Category 5 licence to operate as an Islamic financial institution.This will be the first home-grown Islamic bank to operate from Dubai International Financial Centre (DIFC).
Law for Dubai Financial Audit Authority issued
Dubai: In his capacity as Ruler of Dubai, Vice President and Prime Minister of the UAE His Highness Shaikh Mohammad Bin Rashid Al Maktoum issued Law No. (4) of 2018 regarding the establishment of the Financial Audit Authority (FAA); and Decree No. (14) appointing Deputy Ruler of Dubai His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum as President of the Authority.
Shaikh Mohammad also issued Decree No. (15) appointing Abdullah Mohammad Saeed Ghobash as Director General of the Authority.
The Law and the two Decrees are effective from their date of issuance and will be published in the official gazette.
The Financial Audit Authority is tasked with controlling public funds, and its spending and management. The Authority also seeks to ensure that departments under the purview of this Law spend public funds efficiently and effectively.
In addition, the FAA is tasked with ensuring and enhancing high levels of accountability and sound management practices within these entities and departments; and creating a conducive environment for control and risk management while ensuring high levels of transparency and integrity.
The Authority is also tasked with making sure that administrative decisions and processes conform to Dubai’s regulations and its high standards of transparency and integrity.
The Law defines the responsibilities of the Authority, which include reviewing and auditing unified financial statements, issuing regulations that govern the preparation and presentation of financial statements and reports and The General Final Account of the Government.
The Authority is also responsible for investigating any financial or administrative irregularities discovered by the FAA or entities under its control, identifying the reasons behind it and taking appropriate action.
It is also tasked with verifying complaints, data, and information received by the Authority about potential financial abuses committed by entities under the FAA’s control.
The FAA is also responsible for providing financial and accounting expertise to entities under its control when assigned such tasks by the Dubai Ruler or the FAA President, or as per requests from government entities.
It is also tasked with ensuring that entities under the FAA’s control comply with regulations and policies; verifying the calculation and collection of public revenues and financial returns from the provision of services; ensuring that banks operating in Dubai adhere to regulations; and making sure that fees, prices, taxes, sales revenues, profits, etc. are correctly calculated as per the provisions of the regulation.
The Authority is also tasked with providing comments and views on The General Final Account of the Government and developing reports for presentation to the Ruler in order for actions to be taken before the deadline for approval.
In addition to providing recommendations for improving the performance of government and related authorities, the FAA is also tasked with following up on the collection of revenues accrued from fines for financial and administrative violations, as well as reviewing work processes and identifying gaps in oversight that have led to violations, and finding ways of addressing them.
The FAA is also responsible for providing a direct channel for customers of authorities under its control to submit complaints related to financial and administrative violations and taking necessary action in response to such complaints.
The Authority is also tasked with conducting research and studies that will help in enhancing financial and administrative integrity; creating a record of financial and administrative violations; and recommending solutions to address them, apart from organizing forums for discussing the enhancement of transparency and integrity.
According to the Law, FAA, through its Director General, is authorized to seek clarification from any official of the entities under the FAA about data and information related to any violation that has been committed in that entity. These officials are required to fully collaborate with the Authority in this regard.
The Law specifies the procedures for the appointment of the President and Director General of the Authority, and their functions and duties, as well as the supervisory work that will be carried out by the Authority with regard to financial control and compliance.
It is responsible for monitoring procedures for performance management as well as the efficiency and effectiveness of control systems. The FAA is tasked with monitoring and reviewing various control systems, ensuring the safety of procedures, identifying shortcomings and recommending ways to address them.
The provisions of this Law shall not override the jurisdiction of the Dubai Electronic Security Center which was established under Law No. (11) of 2014 and is tasked with ensuring the security of government data and government systems.
The FAA is authorized to monitor data security and information systems of non-government entities and entities that are under the FAA.
According to the Law, if any person attempts to obstruct the work of the FAA, the Director General of the FAA or an assigned employee is authorized to take the necessary actions for safeguarding the documents being reviewed and audited, and seek the help of relevant authorities including police to ensure its work is not impeded.
As per the law, employees will be held accountable for any financial and administrative violations and irregularities committed by them, even after the end of their service.
They will also be subject to legal actions resulting from these violations. The resignation of an employee who is under investigation will not be accepted until the end of the investigation and its final ruling.
The FAA is authorized to liaise with federal, regional, and international authorities, sign agreements with external organizations, and become a member of regional and international organizations.
All the rights and obligations of the Financial Audit Department will be transferred to the FAA. All employees working in the Department will be transferred to the FAA on the date on which the new Law becomes effective. All the rights of the employees will be retained.
Apart from this Law or any other Law issued by the Ruler of Dubai, or the FAA President, the Director General of the Authority is authorized to issue decisions required to implement the new Law.
This Law will replace Law No. (8) of 2010 pertaining to the Financial Audit Department and its amendments.
The new Law annuls any legislation that contradicts it.
The regulations, decisions, and instructions issued pursuant to Law No. (8) of 2010 shall continue to apply to the extent that they do not conflict with the provisions of this Law until the issuance of the regulations, resolutions, and instructions that replace them.