DUBAI – Small- and medium-sized enterprises (SMEs) are the backbone of the UAE’s economy, comprising over 90 percent of businesses in the region. However, despite their significant contribution, SMEs face many challenges, especially in managing expenses efficiently. In a rapidly evolving business landscape, where time and resources are crucial, cumbersome expense management systems can hinder growth and productivity.
A recent report sheds light on the intricacies of expense management within the UAE’s SME sector, revealing critical insights and opportunities for improvement. Over the years, SMEs in the UAE have undergone significant evolution driven by innovation and adaptability. Yet, amid their growth trajectory, challenges persist, especially in administrative processes like expense management. The complexities of filing expenses, limited resources, and time constraints pose significant hurdles for entrepreneurs and employees alike.
According to a study by Pemo, a leading spend management platform, 21 percent of UAE employees and entrepreneurs refrain from submitting expenses regularly due to the complexity of existing filing systems. This reluctance impacts individual finances and translates into substantial revenue losses for businesses, averaging 13,206 AED per year per employee. The burden of inefficient expense management falls disproportionately on SMEs, diverting valuable time and attention from core business operations.
At A Glance * SMEs are crucial to the UAE's economy, representing over 90% of businesses but face challenges in efficient expense management. * A study by Pemo reveals 21% of UAE employees and entrepreneurs avoid regular expense submissions due to system complexities. * Inefficient expense management costs UAE businesses an average of 13,206 AED per employee annually. * Digitalization and automation are recommended to improve expense management efficiency and transparency. * 51% of respondents believe automated systems could save 1-3 hours per month. * The UAE's strategic location, pro-business policies, and diverse economy offer SMEs significant growth opportunities. * Access to global markets, venture capital, and a skilled workforce supports SME innovation and expansion. * Initiatives like the Dubai Future Foundation and the UAE Golden Visa program foster a conducive environment for SMEs.
Ayham Gorani, Co-Founder of Pemo, emphasizes the detrimental impact of convoluted expense processes, stating, “Employees throughout the UAE are losing staggering amounts of money yearly because the process is often too complex and time-consuming. We might as well be throwing money out the window.”
Valerie Konde, Co-Founder of Pemo, echoes this sentiment, highlighting the challenges faced by SMEs reliant on manual expense platforms: “Many of these businesses rely on cumbersome, manual platforms to manage their corporate spending, which are not fit for purpose.”
Employees throughout the UAE are losing staggering amounts of money yearly because the process is often too complex and time-consuming. We might as well be throwing money out the window.
Ayham Gorani, Co-Founder of Pemo
The report suggests practical solutions to streamline expense management processes and alleviate the burden on SMEs. By embracing digitalization and automation, businesses can enhance efficiency and transparency in expense reporting. Simplified, user-friendly platforms and tools such as automated spend management systems offer promising avenues for optimization. Additionally, empowering employees through corporate cards fosters a culture of responsibility and accountability, facilitating seamless reimbursement processes.
Despite existing challenges, optimism remains high regarding the impact of innovative expense management solutions. A significant portion of respondents (51 percent) believe that implementing automated systems could save between 1-3 hours per month, demonstrating the tangible benefits of technological advancements in this domain. As SMEs navigate evolving business landscapes, embracing digital solutions becomes imperative to drive growth, foster efficiency, and unlock the full potential of the UAE’s entrepreneurial ecosystem.
Why the UAE?
The UAE holds unparalleled strategic significance. Its strategic location facilitates seamless connectivity to key markets, making it an ideal hub for international trade and commerce. With state-of-the-art infrastructure, including world-class airports, ports, and logistics facilities, the UAE offers SMEs unparalleled access to global markets, enabling efficient distribution and supply chain management.
Many of these businesses rely on cumbersome, manual platforms to manage their corporate spending, which are not fit for purpose.
Valerie Konde, Co-Founder of Pemo
The UAE’s pro-business policies and regulatory framework have garnered international acclaim, fostering a conducive environment for SMEs to thrive. The UAE encourages entrepreneurship and innovation with minimal bureaucracy, favorable tax regimes, and investor-friendly laws. Free zones further incentivize foreign investment, providing SMEs unparalleled flexibility and autonomy to operate within designated areas.
The UAE boasts a diverse and dynamic economy with robust growth across various sectors. From finance and technology to tourism and healthcare, the country offers numerous opportunities for SMEs across industries. Dubai, in particular, has emerged as a global business hub, hosting numerous conferences, exhibitions, and networking events that facilitate collaboration and growth for SMEs.
Access to capital is crucial for SMEs looking to scale and expand their operations. In the UAE, abundant investment opportunities abound, with access to venture capital, angel investors, and government-backed initiatives supporting entrepreneurship and innovation. Moreover, the UAE’s thriving financial sector provides SMEs access to various financing options, including loans, grants, and crowdfunding platforms.
The UAE is synonymous with innovation and technological advancements, spearheading initiatives to drive digital transformation and foster innovation across industries. With robust support for research and development and initiatives such as Dubai Future Foundation and Area 2071, the UAE provides SMEs with access to cutting-edge technologies and resources to fuel growth and competitiveness.
The UAE’s rich cultural tapestry and cosmopolitan environment attract talent from around the globe, creating a melting pot of creativity and diversity. SMEs benefit from access to a skilled workforce with diverse backgrounds and expertise, facilitating innovation and collaboration. Additionally, initiatives such as the UAE’s Golden Visa program incentivize qualified professionals and entrepreneurs to contribute to the country’s growth and development.