Accounting and bookkeeping for Manufacturing Industry

Accounting & Bookkeeping for Manufacturing Industry in Dubai

The second-largest contributor to economic growth is the manufacturing industry. Accounting & Bookkeeping are major activities that ought to be carried out by every firm.

Let’s take a look over Appliances and Machinery Manufacturing companies. This industry segment manufactures a wide variety of goods including power tools, machinery, home technology, factory equipment, etc.

Similarly, some service offered by the machine industry is the means of production for companies in the construction, mining, and agricultural industries.

The industrial machinery market is split globally by:

• Type: food product machinery, other industrial machinery, printing equipment, woodworking, and papermaking machinery, semiconductor machinery 
• Modes of operation: autonomous, semi-autonomous, and manual 
• Sizes: small, medium, and large
• And the sub-sections cover woodworking equipment, paper industry equipment, chemical processing equipment, etc.

The means of production for public utilities as well as a variety of auxiliary tools for all economic sectors.

On the other hand, it supplies consumer goods, such as kitchen appliances, refrigerators, washers, and dryers, etc.

Manufacturing Industries in Dubai

The UAE's manufacturing industry is expanding. The UAE Ministry of Economy recently declared that the nation aims to boost the contribution to the GDP of the manufacturing sector to 25% by 2025.

The contribution of the manufacturing industry to the UAE economy stands at around 14%.

Dubai's Department of Finance established the National Industrial Coordination Council (NICC), to help the UAE improve its position in the global Manufacturing company indexes.

Accounting & Bookkeeping

Even though the fundamentals of both terms are the same, accounting grows with a broader scope than that bookkeeping.

Accounting involves the interpretation, analysis, classification, reporting, and summarizing of the financial data of a corporation. On the other hand, bookkeeping is solely concerned with recording financial transactions.

They lay down the basis for evaluation, and serve as the foundation for managerial choices. Meanwhile, they give shareholders and the government crucial financial data by assuring adherence to UAE tax regulations.

Accounting Procedures for Manufacturing Industries in Dubai

According to worldwide norms and reporting guidelines, accounting for manufacturing enterprises primarily consists of two components:

• Cost of goods sold
• Inventory valuation

Inventories

A manufacturing firm is made up of a variety of raw materials that form the basis of the manufacturing process. For instance, some goods are still under development to allow for the fulfillment of tasks.

Companies with significant inventories in manufacturing include:

• Raw materials:

A necessary part of the manufacturing process. Direct materials are required for product manufacture.

• Work in Progress:

Within the production facility, incomplete processes are referred to as work in progress.

• Finished Goods:

Products that are prepared for market sale and are of a taxable type are referred to as finished products.

Cost of Goods Sold (C.O.G.S.)

One of the significant costs a company faces is the cost of goods sold. The formula for calculating it mathematically is starting stock plus purchases minus closing stock.

This recognition is possible using the matching concept. Moreover, it must be regarded as the main offset cost. It should be taken into account sooner because it happens before selling and administrative costs.

The following variables affect the cost of products sold:

• The fluctuating cost of purchasing raw materials
• Varying labor rates according to locales
• Product mix
• Techniques for allocating overhead
• Techniques for cost stacking like FIFO and LIFO
• Waste and spoilage in manufacturing

The need for surveillance in the Appliances and Machinery Manufacturing sector is uncertain due to the numerous changes in the business environment and its instability.

Comprehensible, effective, reliable, and timely accounting and bookkeeping can help the appliances and machinery manufacturing business in many ways

However, it’s difficult to run an appliances and machinery manufacturing business and keep track of the accounting at the same time.

What Important Role Does Accounting Play in The Manufacturing Sector?

Accounting is necessary for the manufacturing industry in part because of the wide range of operations and sales activities.

Implementing a well-organized accounting system benefits industrial businesses in:

• Tracking production-related earnings and costs and preparing SOA for suppliers
• Helping to manage the payroll file and process salaries
• Offer price-gouging recommendations for the goods based on the various expenses incurred and reporting of monthly costs and reconciliation.
• Use of a perpetual inventory system to reduce overstock and bottlenecks.
• Internal control measures are put in place to prevent fraud and mistakes.

Why Should Manufacturing Units in Dubai Outsource Accounting & Bookkeeping Services?

Every firm, regardless of size, must have accounting & bookkeeping systems in place. Without trustworthy, accurate, and timely financial information, you cannot function.

Some of its aids are as follows:

1. Reduces administrative burden
2. Cost reduction
3. Accuracy
4. Compliance with the law
5. Saves time and resources
6. Compliance with IFRS
7. Professional approach
8. Expert’s opinion
9. Custom-tailored services
10. Helps in decision making

To make prudent business decisions, it is vital to keep track of your company's performance, and accounting & bookkeeping services in UAE are topnotch.

What Accounting Services Do We Provide?

• Financial accounting & data entry.
• Management accounting & report preparation.
• Payroll accounting.
• Training & accounting supervision for existing accountants
• Managing payable & receivables
• Finalization of accounting & backlog completion.
• Preparation of financial statements
• Audit assistance for closing books periodically in compliance with IFRS

Conclusion

In conclusion, we bring the outsourced organization not only to provide a wide range of bookkeeping and accounting services throughout the UAE but to foreign entities too. Our technology-driven specialists endeavor to comprehend the intricacies of your firm for your specific accounting and bookkeeping needs to be met. For every service offered in the context of accounting and bookkeeping for manufacturing industries in Dubai, we provide tailored solutions to your demands at a comfort level.