Manufacturing industry is in a constant need of surveillance due to the many uncertainties in the market. The dynamic business environment keeps on changing and the various businesses in the manufacturing industry domain have to keep themselves updated with the numerous changes in process and procedures, legal changes as well as the changes in the lead time and the variable costs. This problem can be greatly reduced by hiring an accountant and implying accounting procedures in the company.
With the exceptional advancements in technology, a business can now take help of a business software or an accounting software which will provide the solution according to the requirement of the company. Using a software would be of great help as it is highly customised and can be updated according to the present rules and regulations. It will also keep a track that the company complies to the regulations as set by the concerned authorities.
Let us gain knowledge about the manufacturing industry in UAE and how can accounting and bookkeeping services help a manufacturing industry in the Middle East.
Manufacturing Industry in the UAE
The manufacturing sector in UAE is following a growing trend and the country’s efficient transport and logistics hub take the potential of this sector to new heights. Not long ago the Ministry of Economy, UAE announced that the country is looking forward to increase the GDP share of the manufacturing sector to 25% by 2025. UAE is also trying to achieve a better ranking in the global manufacturing indices and with this in mind, the Department of Finance, Dubai has created a National Industrial Coordination Council (NICC).
The government of UAE is trying to focus more on the manufacturing sector as they so not want to be solely dependent on the oil and gas sector. Being dependent on only one sector may lead to downfall of the economy during times of crisis.
How Can Accounting Help the Manufacturing Industry in UAE?
Accounting can provide a number of benefits to a manufacturing business. These benefits are enumerated below:
1.Keeps an Eye on Expenses
The accounting function would keep a note of all the expenses incurred by the business. The proper analysis of these expenses would help the management management to properly monitor the trend of the company and plan business strategies accordingly. Just to cover all the bases, the expenses of the company must comprise of both the fixed and the variable expenses. Handling the fixed expenses may not pose a problem but the accountant must be vigilant while tracking and noting the variable expenses.
2.Recognize and Focus on KPI’s
As the accounting services will track of all the processes and procedures of the company, it will be easier to understand and compare the results of the various processes being followed in the company. This will allow the management to recognize the relevant KPI. KPI here stand for Key Performance Indicator and can be defined as the goal or metric which has been set by the business. A KPI is a very important to the company as they not only help in figuring out which part or department of the company is preforming better but it also helps in the decision making of the management and allows creation of business strategies according to the findings of the business.
3.Set Correct Margins
With proper accounting systems and appropriate transaction recording, the business can set proper margin for each of its product and service. This would allow them to properly price them and make any future plans and strategies accordingly. There are many ups and downs in the economy or the prices of the labours and raw materials change, etc. and in such cases setting correct margins of the offering will keep the business out of bankruptcy.
With the advancements in technology, there is an increase in the number and types of accounting software. There is a new software every month with added functions and new functionalities and these provide a great help to manufacturing companies, especially the budding companies which cannot afford to have a permanent accountant in the company.
5.Tracks and Manages Inventory
With proper accounting methods, a company can keep track of all its present inventory which would help the company to order for raw materials only when required. This would greatly reduce any wastage of the resources and will allow greater control over the production and manufacturing function of the business.
Accounting is one of the basic function which should be performed by the management of every company regardless of the type of industry. With the greater prospect of the manufacturing industry in UAE, a number of companies are being established in the country which would increase the need of accounting and auditing firms in UAE.
If you have setup your company in the manufacturing domain and are looking for accounting firms in Dubai or the anywhere in UAE which would provide you customised solutions according to the business problem of your company, then you must avail the services of “JAXA”. Our team consists of certified public accountants in Dubai and have an experienced team of professionals who are knowledgeable and will stand with you during every single step in the Business. For more details on the services we provide do contact us – we would be happy to help.