Year-End Accounting Checklist for UAE Businesses: Everything You Must Do

Closing the fiscal year in the UAE demands a precise blend of local regulatory knowledge and global accounting standards. From reconciling accounts to ensuring corporate tax readiness, the year-end accounting can quickly become overwhelming for busy entrepreneurs. Our definitive checklist simplifies this high-stakes process, highlighting the important steps every UAE business must take to remain compliant and profitable. Don’t leave your financial health to chance; follow these experts’ strategies to streamline your workflow and secure your business’s long-term success.

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UAE Year-End Accounting Checklist for 2025

A meticulous year-end accounting process ensures that no important detail is overlooked. Follow this checklist to ensure that your books are fully reconciled, compliant, and prepared for the year ahead.

1. Record All Transactions Up to December 31, 2025

Ensure that all transactions are recorded in accordance with the IFRS standards, including:

• Bank and credit card transactions
• Receivables and payables
• Vendor bills, customer invoices
• Petty cash and reimbursements
• Payroll records

Additionally, ensure that prepaid expenses (e.g., rent paid in advance, insurance premiums, etc.) are properly recorded as assets and expensed over time as the benefit is received. Similarly, make provisions for expected future liabilities (e.g., bonuses, warranties, or legal expenses) to ensure your financial statements reflect a true and fair view of your business’s obligations

2. Post Year-End Adjustments

After recording all transactions, post any necessary adjustments to reflect the accurate financial position. This includes:

• Accruals for expenses that are incurred but not yet paid
• Deferred revenue or prepaid expenses adjustments
• Reclassification entries to ensure expenses and revenues are categorised correctly.

If your business deals with multiple currencies, make sure to update foreign currency balances at the year-end exchange rate.

3. Review Accounts Payable and Accounts Receivable

Run ageing reports for accounts payable and receivable to verify balances against vendor and customer statements. Reconcile any discrepancies, such as duplicate bills or unappliedd credits, and follow up on overdue invoices to boost cash flow before year-end.

If necessary, send reminders to clients with overdue accounts, or set up payment plans where appropriate. Resolving these issues before closing the books will improve liquidity and working capital.

4. Maximize Tax Benefits by Leveraging Accrued Expenses

For tax efficiency, businesses in the UAE can leverage accrued expenses such as utilities, professional fees, and operating costs to lower their taxable income. Accruing these expenses helps align costs with related revenues, maximising tax deductions, and minimising tax liabilities.

5. Provision for Bad Debts

Review your accounts receivable and assess whether any debts are likely to remain unpaid. Based on your company’s historical experience and bad debt policy, make provisions for doubtful debts. This ensures that your revenue and receivables are reported realistically and helps create a tax deduction for the expected loss.

6. Depreciation of Fixed Assets

Ensure that depreciation is calculated in accordance with IAS 16 (Property, Plant, and Equipment), which provides guidelines on how to properly depreciate assets over their useful lives. This will ensure your balance sheet reflects accurate asset values

For instance, If you buy equipment worth AED 50,000 with a 5-year useful life, you will depreciate it by AED 10,000 each year. This ensures that the cost of the equipment is spread over its useful life, matching the expense to the revenue it helps generate.

7. Check Personal Payments Made for Business Expenses

Sometimes, business-related expenses are paid for by personal funds. It’s essential to ensure these payments are properly recorded in the company’s books to avoid missing out on deductible expenses.

For example, if you paid office supplies with personal funds, record this transaction in your accounts to ensure you can claim the deduction at tax time.

8. Review Bank, Credit Card, and Loan Balances

Reconcile your bank accounts, credit cards, and loan balances with the year-end statements. This includes confirming that principal and interest payments on loans are accurately recorded and reviewing clearing and suspense accounts to ensure all temporary or pending transactions are resolved.

It also involves verifying that any outstanding balances or uncleared items are properly identified and reflected in the books. Proper reconciliation helps avoid errors, discrepancies, and potential fraud. It also gives you a clear picture of financial obligations heading into the next year.

9. Inventory Valuation

Conduct a physical count of inventory and reconcile the actual numbers with your recorded inventory levels. Ensure the valuation of inventory follows your accounting policy (FIFO, weighted average, etc.) and write down any slow-moving or obsolete stock. Accurate inventory reporting helps calculate the correct cost of goods sold (COGS) and ensures that profits are not overstated.

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10. Carry Out Intercompany Adjustments

If your business has multiple entities or operates within a group structure, ensure that all intercompany transactions are properly adjusted and eliminated during the year-end process. This includes:

• Eliminating intercompany profits and transactions to avoid double counting in consolidated financial statements.
• Reconciling intercompany balances (e.g., loans, receivables, payables) to ensure they match across entities.
• Ensuring that transfer pricing policies are adhered to, and that intercompany transactions are priced in compliance with applicable regulations, particularly under the UAE Corporate Tax Law.
• Reviewing any intercompany dividends or distributions and ensuring they are correctly accounted for in both the parent and subsidiary ledgers.

11. Payroll Reconciliation

Ensure all payroll records align with your general ledger, including wages, taxes, and benefits. Accrue any unpaid bonuses, salaries, or leave balances as of December 31. In the UAE, compliance with the Wages Protection System is required for most private-sector employers, except for certain UAE-national employers like owners of fishing boats and public taxis, banks, and houses of worship. Salaries must be processed through approved banking channels and recorded accurately, while accounting for end-of-service benefits and accrued leave in line with UAE labour laws.

12. Ensure VAT Compliance

Businesses must ensure that VAT transactions are recorded correctly, and that VAT returns are filed accurately. This includes:

• Confirm that all sales, purchases, and expenses are properly recorded with VAT. This includes ensuring VAT on imports and exports is accounted for according to the UAE Federal Tax Authority (FTA) guidelines.
• File VAT returns on time based on the tax period assigned by the Federal Tax Authority; typically quarterly for most businesses, and monthly for larger businesses (often those with annual taxable supplies of AED 150 million or more)—accurately reporting VAT payable or recoverable.
• For goods or services imported from non-UAE suppliers, account for 5% VAT under the Reverse Charge Mechanism in the VAT return, and recover the VAT as input tax where eligible, supported by supplier invoices and import documentation.

13. Corporate Tax Compliance

With the introduction of corporate tax, all businesses (except those operating in free zones with certain conditions) are subject to corporate tax at a rate of 9% for profits exceeding AED 375,000. Here’s what to focus on:

• Ensure that your business is calculating taxable income correctly, considering all allowable deductions, such as operating expenses, depreciation, and interest payments.
• Confirm whether your business qualifies for exemptions under the new law.
• Prepare all necessary documentation for filing your corporate tax return. This includes reviewing your financial statements, assessing any tax deductions, and ensuring that your books are in order before submitting your tax filings.
• If applicable, ensure that intercompany transactions are properly documented and comply with transfer pricing rules under the UAE Corporate Tax Law.

14. Review Related Party Transactions and Transfer Pricing

Review all related party transactions (e.g., sales, purchases, loans) and ensure they are properly documented and disclosed. Verify that these transactions are conducted at market rates, according to transfer pricing regulations. Ensure compliance by preparing proper transfer pricing documentation to mitigate tax risks and ensure accurate financial reporting, avoiding penalties.

15. Prepare Financial Statements

Once all adjustments have been made, compile your financial statements for 2025. These should include:

• Statement of Profit and Loss and Other Comprehensive Income
• Statement of Balance Sheet
• Statement of Cash Flow
• Statement of Changes in Equity
• Notes to Financial Statements

Ensure the figures are accurate and aligned with the adjusted balances, as these statements are crucial for internal analysis, tax filing, and attracting investors or securing financing.

16. Finalize and Backup All Documents

Before the year closes, ensure all necessary documentation, such as payment receipts, sales of purchase, bank statements, and contracts()are properly filed and backed up. Both digital and physical copies should be stored securely for easy retrieval if needed for tax audits or financial reviews.

17. Create a Financial Close Schedule

Draft a financial close schedule for the year-end process, listing all tasks, deadlines, and responsible parties. A well-organised close schedule ensures that everything is completed on time, reducing stress and last-minute rushes.

18. Backup All Financial Data

Finally, ensure that all financial data, including reports, ledgers, and statements, is backed up securely, both digitally and physically. Use encrypted cloud storage or secure drives to protect sensitive information. Regular backups will safeguard against data loss due to system failures or cyber threats.

How Outsourced Accounting Services Simplify Year-End Accounting for UAE Businesses

When year-end accounting deadlines approach, many UAE businesses feel the pressure of reconciling accounts, meeting VAT requirements, and finalising financial reports on time. The rush to close the books often leads to errors, compliance risks, and missed insights that could have supported better decisions for the year ahead. Outsourced accounting services remove this burden by bringing structure, accuracy, and clarity to the year-end close process.

By partnering with Whiz Consulting, UAE businesses can rely on accounting outsourcing to hand over their year-end accounting to experienced professionals who manage reconciliations, VAT filings, financial statements, and compliance checks end to end. With strong expertise in modern accounting software and well-defined processes, we ensure your books are closed accurately and on schedule.

Connect with us to see how accounting outsourcing for year-end activities reduces stress, maintains compliance, and sets you up for a growth-focused new financial year.