Year-end case studies: Hidden financial issues UAE businesses catch too late (A must-read for 2026)

In one trading company’s journey, timely supplier invoices were a rare sight. Purchases were logged as soon as goods arrived, but the supporting invoices lagged behind. This mismatch created a striking AED 280,000 difference between the company’s internal payables and what its suppliers recorded. 

The risk didn’t stop there: missing tax invoices meant output VAT couldn’t be reclaimed confidently, prompting auditors to demand extensive backtracking before sign-off. 

Lesson learned: Operational and finance teams must move in sync. Treating delivery notes as final financial evidence leads to year-end surprises that disrupt company financials year end reviews. 

At a manufacturing company, staff were frequently advanced funds for visas, petty cash needs, and urgent travel. But when several employees resigned without clearing their balances, the problems snowballed. 

Many advances were settled informally in cash through department heads with no documentation. These unverified amounts lingered in the ledger and were flagged immediately during audit procedures. The finance team had no choice but to contact ex-employees directly for written confirmations. 

Key insight: Businesses with large or fluid workforces often uncover mismatches during year end bookkeeping that never surface during regular operations. 

A service firm noticed persistent AED 30–40 monthly debits that no team member could explain. After investigation, the culprit emerged: sales staff had subscribed to digital tools on the corporate card, with auto-renewals quietly running in the background. 

These seemingly insignificant amounts created unnecessary reconciliation delays and extended month-end closing by days. 

Takeaway: Small, unmanaged subscriptions create big friction. Regular card monitoring prevents reconciliation fatigue at company financials year end. 

A distributor performed its first stock count in 18 months and the results were alarming. Shelves held piles of expired and slow-moving items still valued at full cost in the system. 

The outcome: an overvaluation of inventory by nearly 14%, inflating reported profits and triggering major adjustments during audit. 

Moral: Inventory is a discipline. Routine counts are essential for accurate reporting and reliable tax calculations. 

One Free Zone company accounted for visa fees, rent, and annual insurance costs entirely in the month they were paid even though these expenses covered 12–24 months. 

The result was a dramatic “profit roller coaster,” with some months showing spikes and others plunging into the red, creating a distorted picture of business performance. The cleanup at year-end required rebuilding accruals and prepayment schedules from scratch. 

Pro tip: Spread multi-year costs over their actual coverage period for dependable profitability insights and smoother year end bookkeeping. 

A mid-sized professional services firm stored contracts, tenancy agreements, and employee files across email, WhatsApp chats, and personal laptops. 

When auditors requested documentation, it took the team five days just to gather the basics. The absence of a centralized system led to delays, higher audit sampling, and prolonged Corporate Tax readiness checks. 

Reality check: Even perfect books collapse without organized evidence. Documentation quality is a non-negotiable part of company financials year end preparation. 

A contracting business had a long receivables list, but aging analysis revealed several invoices tied to ongoing disputes, delayed approvals, and project-stage disagreements. Some were over 540 days old. 

These amounts remained in the accounts as collectible, even though recovery was unlikely. Auditors required provisioning, which materially reduced reported profit. 

Insight: Year-end exposes the truth behind receivables. Not all revenue turns into cash, and unresolved disputes balloon into financial distortion. 

A services company reported lower VAT revenue than what its accounting system showed. The issue? Several invoices were recorded under generic heads like “miscellaneous income” or “general accounts,” bypassing revenue mapping. 

These misclassified amounts created output VAT underreporting and triggered concerns during review. 

Takeaway: VAT errors often originate from accounting classification not the VAT process itself. Proper chart-of-accounts discipline is crucial during year end bookkeeping. 

Across these case studies, one theme is clear: year-end financials reveal a lot of  problems. When operational habits, undocumented settlements, delayed reconciliations, and misclassifications pile up across the year, they all surface during your company financials year end audit and tax cycle. 

A disciplined, month-by-month process keeps these issues small. But ignoring them ensures they return bigger, harder, and more expensive every December. 

Avoid year-end surprises. Transform them into structured processes. Kitaab helps you build month-on-month bookkeeping discipline, identify mismatches early, and stay fully audit-ready. Get closer, clearer financials, and full compliance before the year turns. 

Book a free consultation with our accounting team