We often hear the term ‘human error’. Quite clearly, it is possible to leave an error in day-to-day business operations. However, several errors can burn a massive hole in your business’s financial pocket if left unnoticed and not rectified timely.
This is one of the many reasons to conduct an internal audit for your hotel business in Dubai!
In basic terms, an audit is a detailed examination and analysis of your business’s financial statements and records as well the internal operational practices you follow, typically done by an external independent auditor.
Internal Audit vs Statutory Audit in Dubai
Now, there are majorly two types of audits done for most types of businesses in Dubai– Internal and Statutory.
Let’s understand the difference and the significance of each of them.
1. Internal Audit:
- An internal audit is like having your own employee find the errors. Generally, most restaurants have an internal team do their audit or outsource the task to a third-party, in case they do not have the required team or are falling short on time.
- Every internal control is thoroughly assessed, and the auditing team focuses on maximising operational efficiency and risk management.
- The audit is conducted with a key goal: to improve operational processes, identify areas for improvement, and identify and eliminate process inefficiencies and frauds.
- It offers actionable data and insights to the restaurant’s management, facilitating decisive plans and overall enhancements.
2. Statutory Audit:
- Unlike an internal audit that can be scheduled as per the organisation’s or restaurant’s administration’s plan, the statutory audit is mandated by an external team of any registered and reliable auditing firm in the UAE.
- Regulatory and legal authorities such as the Dubai Economy or the DFSA (Dubai Financial Services Authority) assess compliance.
- The external auditing team also thoroughly checks financial statements and records of your restaurant for AS (Accounting Standard) compliance, accuracy and other additional factors.
- This process helps assure regulators, investors and other restaurant stakeholders of the accuracy of your financial statements and records.
Things to Remember for a Successful Hotel Audit in the UAE
Now that the distinction between internal and statutory audit is clear let’s explore the 5 best practices for a successful hotel audit in UAE. Following these tips will enable you to streamline your daily operations and boost business productivity.
1. Ensure you have well-defined the goals
Before you start the audit process of your hotel business in Dubai, set well-defined objectives and the scope of it. Assess and make a note of the key areas you want included in this audit. For instance, it could be regulatory standard compliance, operational steps, guest experience and financial statements and records.
Determining these in advance will help you dedicate the auditing team’s effort to areas that need the most attention. While you are at it, assign timelines to each and communicate them to all internal stakeholders so everyone is informed.
2. Auditing consultants to rescue
For hotels that do not have an internal team for auditing the financial records and operations, auditing consulting firms come to the rescue. Even if you have a finance team in-house, it is advisable to opt for the services of an audit consultant firm in UAE or business consultants in Dubai. There are a plethora of reasons why!
Many audit consulting firms specialise in auditing the hotel business in Dubai. Thus, such consultants are able to uncover inefficiencies and establish controls that others may skip. You can elevate your hotel’s performance and brand image by leveraging its capabilities.
3. Timely internal audits are the best way to be prepared for statutory audits
Prioritising your internal audits as per their schedule for your hotel operations is directly connected with streamlining and stress-free statutory audits. You must review all financial records and processes on a timely basis. This helps find any discrepancies and errors before they come to the surface at the time of statutory audits.
Also, make sure your internal audit is customised according to the nuances and regulations relevant to the hospitality industry in UAE. Altogether, an internal audit helps improve your hotel’s image and brand reputation and ensures trust amongst the stakeholders.
This is a good time to see how you can improve your operational process, remove manual and repetitive tasks and optimise cost. Lastly, evaluate resource utilisation and optimise wherever required.
3. Utilise the expertise of all departments
If you are conducting the internal audit in-house for your hotel, ensure you include all department heads in it. This means, collaborating with customer experience specialists, human resources, operations, marketing and finance. All these departments have their monthly expenses that need to be thoroughly accounted for and assessed as a part of your internal audit process.
5. Chalk out a plan and reporting
Hotel audits are ongoing throughout the period. In fact, the audit does not end after the audit process. The most important part starts thereafter.
Once you have completed the audit, it is time to evaluate the findings, make proper reports of them, and then get to even more important aspects—corrective actions. Check the progress of the rectifications done from time to time and add more checks to enhance the results. Following this will help ensure sustained improvements and success.
6. Create an ongoing audit plan:
Audits for any hotel business in Dubai or restaurant business setup in Dubai can never be a one-time thing. In fact, you will understand this after you do the first audit of your hotel and find all the gaps.
Besides an internal audit, hotels in the UAE are also required to conduct an energy audit every month. With effect from 15 March 2023, all hotels in the UAE must assess their carbon footprint and report the amount monthly.
The Strategic Advisor of the Middle East Solar Industry Association, Abhayjit Sinha shared this mandate in a panel discussion about renewable energy projects for the Middle East Energy Dubai summit. As per the new regulations, hotels in Dubai are also required to share the details of the water and electricity units they consume as well as the waste management initiatives executed every month.
Abhayjit Sinha further said, “It’s going to be through energy audit to measure power and water consumption, waste management, how many tonnes of waste is generated from food and non-food and materials which have been washed. If you are using more laundry per room, you are using more water and more water means you are using more electricity because of the use of desalinated water, which all contribute to carbon footprint.”
Further, if your numbers cross the threshold, you can be penalised, and if they are less, the UAE’s Department of Economy and Tourism (DET) will incentivize you at the end of every month.
If you want to outsource this to another firm, AB Capital is a great choice. We can handle the financial audit of any type and size of hotel business operation in the UAE, so you can relax and focus on other areas that need your attention.
Book a free consultation with our experts and learn how we can do a successful internal audit for your business with the best business consultants in Dubai.
