Chart of Accounts for a UAE Small Business: A Simple Starter Structure
A practical chart of accounts for UAE SMEs, including VAT, payroll and gratuity accounts, and how to keep it simple.
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The chart of accounts is the list of categories every transaction is recorded against. A simple, consistent one makes VAT returns, Corporate Tax and management reports easier. Here is a starting structure.
The five groups
- Assets (what you own)
- Liabilities (what you owe)
- Equity (owner's interest)
- Income (what you earn)
- Expenses (what you spend)
A starter list for a UAE SME
Assets: Cash in hand, bank accounts, accounts receivable, inventory, prepayments and deposits, VAT input (recoverable), fixed assets (equipment, vehicles, furniture) with accumulated depreciation.
Liabilities: Accounts payable, accrued expenses, VAT output (payable), VAT payable to FTA, salaries payable, end-of-service gratuity provision (see the gratuity calculator), loans.
Equity: Share capital, owner's drawings, retained earnings.
Income: Sales (standard-rated), sales (zero-rated), sales (exempt), other income.
Expenses: Cost of goods sold, salaries, rent, utilities, marketing, professional fees, bank charges, depreciation, licence and visa fees.
Tips
- Keep VAT on separate accounts so the return reconciles quickly
- Separate zero-rated and exempt sales
- Do not create an account for every vendor, use sub-ledgers
- Review it once a year, not every month
Let the software do the structure
Good accounting software starts with a sensible chart and posts documents to it automatically. Pyalm Books includes a chart of accounts, manual journals and period locking, and is free during beta. Start free.
Rules and deadlines change. Confirm the current position with the Federal Tax Authority (tax.gov.ae) or a qualified adviser before you file or pay.