Month-end close for UAE SMEs: a practical checklist.
Closing the books every month is what turns bookkeeping into information you can use. It also makes VAT returns and year-end accounts far quicker. This is the checklist we work through for our clients, with the parts that are particular to the UAE.
A month-end close does not need to be complicated. It needs to happen every month, in the same order, by the same date. We aim to close our clients' books by the 15th of the following month. Here is the order we work in.
1. Bank and card accounts
Reconcile every bank account, credit card and payment gateway to its statement. Every line should be matched to a sale, a purchase, a transfer or a known charge. Unmatched items are listed and chased, not left for later.
2. Post-dated cheques
Post-dated cheques are still common in the UAE, especially for rent and for supplier terms. Keep a register of cheques issued and received, with their dates, and check it against the bank each month. A cheque that bounced or was never presented can distort both cash and payables.
3. Sales and customer balances
Confirm that every sales invoice for the month has been issued and recorded, and that customer payments are matched to the right invoices. Review the aged receivables list and follow up anything older than your normal terms.
4. Supplier bills and credit notes
Record all supplier bills for the month, including those that arrive late, and any credit notes. Keep the tax invoices: they support the VAT you recover on purchases.
5. Rent and other annual payments
Office and warehouse rent in the UAE is often paid once a year or in a few cheques. Record the payment as a prepayment and spread the cost across the months it covers, so each month carries its fair share. The same applies to insurance and annual software subscriptions.
6. Payroll, WPS and end-of-service gratuity
Check that payroll agrees with the salaries paid through WPS. Then record the month's share of end-of-service gratuity for each employee, so the liability builds up gradually rather than arriving as a surprise when someone leaves.
7. Petty cash
Count petty cash, match it to receipts, and record the month's expenses. Small amounts add up, and petty cash is where missing receipts usually hide.
8. Fixed assets and depreciation
Add any equipment, furniture or vehicles bought in the month to the fixed asset register, and record depreciation for the period.
9. VAT control account
Check that the VAT on your sales and purchases in the books agrees with what will go into the next return. Fixing a difference now takes minutes; fixing it on the deadline day takes much longer.
10. Review the numbers
Compare the profit and loss account with last month and with the same month last year. Large movements should have a reason you can explain in one sentence. If they do not, something has been missed.
In the UAE, VAT records must be kept for at least five years from the end of the tax period they relate to, and Corporate Tax records for at least seven years from the end of the financial year. Keep invoices, bank statements, contracts and your monthly close files for at least that long, in a form you can find again.
Why the close date matters
A close that happens "when there is time" drifts into the next month, and then into the VAT deadline. A fixed close date turns the books into a monthly report you can actually use: cash, margins, who owes you and whom you owe.
If you would rather hand this over, our monthly bookkeeping service includes the full close and a monthly report, with books closed by the 15th.
Talk to an accountant who knows the UAE.
Tell us about your business in three quick questions. We reply within one working hour to set up a call, with no obligation.