Year-End Accounting Checklist for UAE Businesses in 2025

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Year-end Accounting

As the year draws to a close, businesses gear up for one of the most crucial periods of the accounting cycle: the year-end. To ensure a smooth and compliant transition into the next financial year, here is a practical and actionable checklist tailored for UAE businesses in 2025.

1. Reconcile Accounts

Reconciliation ensures your financial records are accurate. Begin by reconciling bank accounts to verify that balances match your bank statements. Extend this process to petty cash, vendor balances, accounts receivable, and other critical accounts.

Actionable Insight: Schedule regular reconciliation reviews throughout the year to avoid last-minute discrepancies at year-end.

2. Perform Adjusting and Closing Entries

Year-end adjustments, such as calculating depreciation, posting accruals, and adjusting prepayments, are critical for accurate reporting. Create a fixed asset schedule to track depreciation, netbook value, and any disposals.

Actionable Insight: Maintain a checklist of recurring adjustments to ensure no item is overlooked during the year-end process.

3. Undertake a Physical Inventory Count

For inventory-based businesses, a stock count is vital to reconcile physical inventory with book records. Under International Financial Reporting Standards (IFRS), inventory should be valued at the lower of cost or net realizable value. Write off obsolete or unsellable stock as needed.

Actionable Insight: Use inventory management software to track discrepancies and automate valuation adjustments.

4. Review Revenue Recognition

Ensure compliance with IFRS 15 by reviewing how revenue is recognized. Verify that revenue corresponds to completed performance obligations rather than when cash is received. Adjust for deferred or unearned revenue (e.g., advance payments for services to be delivered in the next year).

Actionable Insight: Maintain a contract tracker to monitor performance obligations and automate deferred revenue adjustments using accounting software.

5. Analyze Accounts Payable and Receivable

Perform an aging analysis of both payables and receivables. Identify overdue payments or potential bad debts. Adjust accounts as necessary, such as recognizing bad debt expenses or increasing allowances for doubtful debts.

Actionable Insight: Implement automated reminders for overdue invoices to improve cash flow management and reduce bad debts.

6. Prepare Financial Statements

Once reconciliations and adjustments are complete, prepare the trial balance. Use this as a basis to produce the balance sheet, income statement, and cash flow statement. Resolve errors or omissions beforehand to ensure accuracy.

Actionable Insight: Leverage accounting software to generate error-free trial balances and streamline financial statement preparation.

7. Prepare for Audit

Whether legally mandated or voluntary, external audits require meticulous preparation. Organize financial records, perform reconciliations, and finalize accounts well in advance. Collaborate with auditors to address any queries effectively.

Actionable Insight: Create an audit preparation folder with all required documents categorized for quick access by the auditors.

8. Address Tax Matters and Compliance

With 2024 marking the inaugural corporate tax period for many companies in the UAE, it is essential to ensure that provisions for corporate tax payable are accurately accounted for in accordance with IFRS and UAE Corporate Tax regulations. For businesses with FY ending in December 2024, ensure your books are prepared for tax filing and compliance requirements. Audited financial statements may be mandatory for certain entities, so gather relevant data early to avoid penalties.

Actionable Insight: Collaborate with a tax consultancy firm like Creative Zone Tax & Accounting (CZTA) to ensure compliance with corporate tax regulations and prepare accurate tax provisions.

9. Internal Reporting and Strategic Planning

Year-end is a key time for management reporting, including budgeting and forecasting. Compare actual results with budgets to identify performance gaps. Use this data to set realistic goals and allocate resources for the upcoming year.

Actionable Insight: Develop a year-end KPI dashboard to provide actionable insights for strategic decision-making.

10. Organize and Preserve Documentation

UAE businesses are required to retain financial records for at least seven years. Organize both physical and digital records to ensure compliance and facilitate smoother audits.

Actionable Insight: Use cloud-based storage solutions to securely archive financial documents and ensure easy access when needed.

11. Assess Business Continuity, Risk Management, and Technology

Year-end is the perfect time to review your business’s risk management strategies, including insurance coverage, cybersecurity measures, and business continuity plans. Simultaneously, evaluate your accounting and operational systems to identify outdated tools or inefficient processes. Upgrading to more advanced ERP or accounting software can improve accuracy, efficiency, and security.

Actionable Insight: Conduct a combined risk assessment and technology assessment to identify vulnerabilities, streamline processes, and explore automation opportunities for the upcoming year.

Why a Year-End Checklist Matters

This checklist provides a structured approach to ensure compliance, enhance decision-making, and prepare your business for the coming year. By addressing each point with actionable steps, you can streamline your accounting process and avoid last-minute stress.

Partner with Creative Zone Tax & Accounting

At Creative Zone Tax & Accounting, we simplify your accounting and tax responsibilities. From bookkeeping to compliance, we help businesses navigate the complexities of UAE regulations with ease.

Contact us today to ensure your year-end accounting process is seamless, compliant, and stress-free!

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