Most bookkeeping problems are caused by a handful of recurring mistakes, patterns we see in client files weekly. Knowing what they look like, why they happen, and how to fix them spares you the year-end clean-up sprint.
What you'll learn
→ Mistake 1: mixing personal and business spending → Mistake 2: posting bank transfers as expenses → Mistake 3: VAT on the wrong side → Mistake 4: forgetting non-cash entriesMistake 1: mixing personal and business spending
The owner pays for a personal expense from the business card, or a business expense from a personal card. Both happen. The fix is consistent: if business uses personal funds, post as 'Director's Loan from' (a payable to the owner). If personal uses business funds, post as 'Director's Loan to' (a receivable from the owner).
Reconcile director's loan accounts monthly. Net them through dividends or settlements. The CT and FTA implications of mixed personal-business expenses are serious, the FTA disallows the personal portion and may impose penalties.
Mistake 2: posting bank transfers as expenses
Inter-company or inter-account transfers booked as expenses inflate the P&L and double-count cash movement. Fix: every bank transfer between two of your accounts should net to zero in the P&L, only the moves into/out of customer or supplier accounts hit the P&L.
Easy to spot: if your bank statement shows a transfer between two of your accounts, both legs should be in your books, and they should cancel. Acowntant auto-detects this; manual systems require attention.
Mistake 3: VAT on the wrong side
Posting VAT to a wrong control account. Output VAT (sales) and input VAT (purchases) need separate accounts. Posting them together makes the VAT return reconciliation impossible and triggers FTA queries.
Set up your VAT accounts at the start: 22001 VAT Output, 22002 VAT Input, 22003 VAT Payable (the net liability after offsetting). Most UAE accounting systems do this automatically; if you set up your own chart, get this right from day one.
Mistake 4: forgetting non-cash entries
Depreciation, amortisation, accruals, prepayment release, the non-cash entries that make accrual accounting accurate. They get skipped because they are not 'real' (no cash moves). The result: P&L overstates profit, balance sheet stops balancing.
Build a month-end checklist with non-cash entries listed: depreciation by class, amortisation of intangibles, prepayment release for the period, accrual for known unbilled liabilities, FX retranslation. Tick each one before closing the period.
This guide is general information, not professional advice. For situations that involve specific facts, talk to your accountant, or hire one of ours from the marketplace.