Budgeting & Cash-Flow Forecasting · United Arab EmiratesVAT, Corporate Tax, rent cheques and licence renewals fall on dates you already know. We put them in one cash-flow forecast.
We build an annual budget and a rolling cash-flow forecast from your reconciled books in AED, report budget-versus-actual each month and go through the figures with you.
At a glance
- Our fee
- Quoted on scope
- Authorities
- Federal Tax Authority (FTA)
- Forms & references
- VAT 201Corporate Tax return
- Deliverables
- Annual budget, budget-versus-actual report and cash-flow forecast
- Forecast horizon
- Usually a 13-week view and a 12-month view
- Built around
- VAT and Corporate Tax payments, renewals, rent cheques and payroll
- Cadence
- Monthly, after the books are closed and reconciled
Overview
What it is, and why it matters.
A budget sets out what you expect to earn and spend over the financial year. A cash-flow forecast shows when the money actually arrives and leaves. The two rarely move together, and a profitable month can still end with less in the bank.
In the UAE, several large payments fall on dates known well in advance. Each VAT 201 return, and any VAT due, must reach the FTA by the 28th day after the tax period ends, and Corporate Tax is paid within 9 months of the end of the tax period. Trade licence and visa renewals, office rent paid by post-dated cheques and salaries through the Wage Protection System, where it applies, add to the list.
Other costs are less visible. End-of-service gratuity builds up with each employee’s service and has to be funded when they leave, and foreign-currency receipts and supplier payments change in AED as exchange rates move.
We build the budget and the forecast on reconciled books in AED, usually as a 13-week view and a 12-month view. Each month we compare actual results with the budget, roll the forecast forward, add simple financial analysis and go through it with you. It is a defined service with set deliverables, not a CFO appointment.
Who needs it
Who typically needs it.
- 01
Owner-managed mainland companies
Businesses funding rent cheques, WPS payroll and VAT payments from one account, where the owner wants to see the balance weeks ahead.
- 02
Free zone companies trading in several currencies
Companies that invoice in dollars, euros or sterling and pay suppliers abroad. The dirham is pegged to the US dollar, but other currencies move against it.
- 03
Businesses adding staff or premises
Companies about to take on salaries, visas, gratuity and a larger lease that want to test the cost before they commit.
- 04
Project and contract-based firms
Contractors, agencies and consultancies whose customers pay on long terms while salaries and suppliers fall due every month.
- 05
UAE subsidiaries of overseas groups
Local companies that send a budget and a monthly budget-versus-actual report to a parent in Pakistan, the UK or the US.
- 06
Businesses paying Corporate Tax for the first time
Companies that have not yet had to set cash aside for a tax payment due within 9 months of the year end.
When you need it
The moments that usually trigger it.
- Your financial year is about to start and there is no budget for it.
- The business is profitable on paper, but the bank balance keeps falling short.
- Your first Corporate Tax payment is coming and nothing has been set aside.
- A VAT payment, a rent cheque and a licence renewal are due in the same few weeks.
- You’re deciding whether you can afford to hire, take a larger office or buy equipment.
- Your bank, an investor or your parent company has asked for a budget or a cash-flow forecast.
- Customers are paying later than they used to and you want to see the effect on cash.
Scope
Exactly what we handle.
Our engagement letter lists these specifically, so you know what is included before any work begins.
- 01
Building an annual budget in AED, month by month, from last year’s actual figures and your own assumptions on sales, costs and hiring.
- 02
Monthly budget-versus-actual reports that show each significant variance and the reason for it.
- 03
A rolling cash-flow forecast, usually a 13-week view and a 12-month view, opened from the reconciled bank balance.
- 04
Placing known outflows on their dates: VAT payments, the Corporate Tax payment, trade licence and visa renewals, post-dated rent cheques and payroll.
- 05
Estimating the Corporate Tax and end-of-service gratuity building up during the year, so cash is set aside before either is paid.
- 06
Showing foreign-currency receipts and supplier payments in their own currency and in AED, so a shortfall in one currency is visible.
- 07
Simple financial analysis each month: gross and net margins, working capital, break-even and runway, meaning how many months the cash lasts.
- 08
A monthly financial review with you, covering the variances, the updated forecast and the decisions coming up.
The process
How it runs, step by step.
Timings depend on the authority and on how quickly documents come together. We tell you what’s typical for your case at the start.
Start with a conversationScope and starting point
We agree the deliverables, the forecast horizon and how often it is updated, and check whether the books are reconciled up to date.
Collect the fixed dates
We list your VAT tax periods, financial year end, licence and visa renewal dates, rent cheque schedule, payroll dates and loan repayments.
Build the budget
We draft the budget by month from your actual figures and your assumptions, and revise it with you until it is a plan you are prepared to be measured against.
Build the cash-flow forecast
Starting from the reconciled bank balance, we map expected receipts and payments week by week for 13 weeks and month by month for 12 months.
Monthly update
Once each month’s books are closed, we report budget-versus-actual, roll the forecast forward and update the financial analysis.
Review with you
We go through the figures with you, point out the weeks where cash looks tight and record any assumption that needs to change.
Fees
What it costs.
Our professional fee for this work. Government and third-party charges are separate, and you have your total in writing before we start.
Finance and reporting
| Service | Fee |
|---|---|
| Budget and cash-flow forecast | Quoted on scope |
Where an audit is required, the audit report comes from an independent registered auditor, whose fee is separate.
What we’ll need
The information to have ready.
A typical checklist. After the first conversation we send a version specific to your situation, so you don’t gather anything you don’t need.
Books and bank
- Adviser access to your accounting software, with the books reconciled to date
- Bank statements or feeds for every account, including foreign-currency accounts
- Aged receivables and payables listings
- Last financial statements and management accounts for the current year
Fixed commitments
- VAT tax periods and financial year end
- Trade licence and visa renewal dates
- Tenancy contract and the schedule of post-dated cheques
- Loan, lease and credit facility agreements with repayment dates
People
- Payroll reports, including WPS reports where they apply
- Staff list with start dates and salary details, for the gratuity estimate
- Planned hires and leavers
Plans and assumptions
- Sales pipeline, signed contracts and customer payment terms
- Planned price changes, new premises or large purchases
- The currencies you invoice and pay in
Please don’t email passports or bank statements. Once we’ve spoken, you’ll get access to a secure upload.
Common mistakes
Where this usually goes wrong.
The problems we are most often asked to fix, and what they tend to cost.
- Mistake 01
Treating profit as cash
Profit is counted when you invoice, and cash arrives when the customer pays. A growing business can show a profit every month and still struggle to fund payroll.
- Mistake 02
Spending the VAT you collected
VAT you charge sits in the same bank account as your own money until the return is due, and it is generally owed on invoices issued whether or not the customer has paid. Without a forecast, the payment to the FTA comes out of working capital.
- Mistake 03
Leaving Corporate Tax out of the plan
The tax is paid within 9 months of the end of the tax period, long after the profit was earned. If nothing is set aside during the year, the whole amount has to be found at once.
- Mistake 04
Forgetting cheques already written
Post-dated rent cheques are presented on their dates whatever the balance is that week. Licence and visa renewals are missed the same way, because they come round too rarely to be part of a monthly routine.
- Mistake 05
A budget nobody looks at again
A budget set at the start of the year and never compared with actual results stops being useful within a few months. The value is in the monthly budget-versus-actual report and what you change because of it.
Worth knowing
The limits, stated upfront.
This is a defined service with set deliverables. It is not a CFO or financial controller role, and we do not run your finance function or take decisions for the business.
We do not issue an audit or assurance report on a budget or forecast. Where a lender or investor needs one, it must come from an independent registered auditor.
We do not give regulated investment or lending advice. Forecasts are estimates built on your assumptions, not guarantees of results or of any bank’s decision.
The work depends on books that are reconciled up to date. Catch-up bookkeeping is scoped separately and comes first.
Preparing VAT returns and the Corporate Tax return, and running payroll or WPS salary transfers, are separate services and are not included here.
Questions
Budgeting & Cash-Flow Forecasting: frequently asked.
If yours isn’t here, ask us directly. We’ll answer in plain terms.
Ask a questionWhat is the difference between a budget and a cash-flow forecast?
A budget is the plan for income and costs over the financial year, and a cash-flow forecast shows when money will actually enter and leave the bank. The budget is set once and measured against, while the forecast is updated as things change. You need both, because a business can meet its budget and still run short of cash.
What is a 13-week cash-flow forecast?
It is a week-by-week view of expected receipts and payments for the next 13 weeks, about one quarter, opened from the reconciled bank balance. That is short enough to build from real invoices, bills and cheque dates instead of broad assumptions. We pair it with a 12-month view for longer plans and roll both forward each month, or more often where that is agreed at the start.
Do my books need to be up to date first?
Yes. A forecast opens from the reconciled bank balance and from receivables and payables that are right, so books that are months behind produce a forecast nobody can rely on. If yours need catching up, we scope that separately and do it first.
Will a bank accept the forecast for a loan or facility?
That is the bank’s decision, and each bank sets its own requirements. We can prepare a budget and cash-flow forecast with the assumptions set out clearly, so a lender can see how the figures were reached. We don’t issue an audit or assurance report on it, and we can’t promise how a bank will respond.
How is this different from a CFO service?
It is narrower. You receive defined deliverables each month: the budget-versus-actual report, the updated cash-flow forecast, financial analysis and a review with us. We don’t run your finance function, deal with banks or investors on your behalf or take decisions for the business.
How do you plan for the first Corporate Tax payment?
We estimate the tax from the profit in the books and the forecast for the rest of the year, and show it in the month it falls due. Corporate Tax is paid within 9 months of the end of the tax period, so for a 31 December year end that is 30 September. The estimate is updated monthly and allows for any relief you expect to claim. The final figure comes from the Corporate Tax return.
How do post-dated cheques and renewals appear in the forecast?
Each one is entered on its own date, for its own amount. We take the cheque schedule from your tenancy contract and the renewal dates from your trade licence and visas, so the forecast shows them months before they clear. Where one falls in a tight week, you see it early enough to plan for it.
Related
Often needed alongside this.
Speak with a consultant
Talk to us about budgeting & Cash-Flow Forecasting.
Pick the closest match and we’ll take it from there. You’ll get a written scope and fee before any work begins.
Or use our three-step guide, or email hello@fiscorra.com
