Industries · Manufacturing
Finance advisory for manufacturers in the UAE
In a factory, margin is won or lost in the costing. If the bill of materials is out of date or overheads are spread by a rough percentage, some products look profitable when they are not. We help manufacturers get product costs, yields and inventory right, so pricing and production decisions rest on real numbers.
Where do manufacturers usually lose margin?
- Out-of-date bills of materialsStandard costs that no longer match what the floor actually uses.
- Rough overhead allocationFactory overheads spread evenly, so complex products are subsidised by simple ones.
- Yield and scrap not trackedWaste shows up only at stock count, months after the cause.
- Inventory valuation issuesSlow-moving and obsolete stock carried at full cost.
How does Valorin help manufacturers?
- Costing reviewWe test bills of materials against production records and rebuild unit costs where needed.
- Overhead allocationOverheads assigned by what actually drives them: machine hours, changeovers, inspections.
- Yield reportingStandard versus actual yield by product line, with variances explained every month.
- Inventory controlsCycle counts, minimum and maximum levels and an obsolescence policy under IAS 2.
Hypothetical example
- A manufacturer's Product A shows an 18% gross margin using a flat overhead rate.
- When setup and inspection costs are assigned by activity, Product A turns out to lose about 2%.
- The company reprices it and moves capacity to products that carry their costs.
An illustration, not a client result.
Frequently asked questions
How should a UAE manufacturer calculate product cost?
Start from an up-to-date bill of materials and routing for each product, add direct labour at real hours, and spread overheads by what drives them, such as machine hours or setups, rather than one rate on sales. Then compare the standard cost with actual cost every month.
How often should product costs be reviewed?
At least once a year, and whenever material prices, yields or the product mix change materially. A monthly variance report shows when a standard has gone out of date.
Does UAE e-invoicing apply to manufacturers?
It applies to in-scope businesses regardless of sector. Revenue decides the phase: AED 50 million or more is Phase 1, below AED 50 million is Phase 2, with an ASP to be appointed by 31 March 2027.
Muhammad Imran, ACMA
Founder and Managing Director · 20+ years in finance
You work directly with the founder, from the first meeting to delivery. Valorin Finance & Advisory LLC, licence no. 2644595.01. About us
Get your product costs right
Tell us what you make and how you cost it today. We'll suggest where to look first.
General information only, not legal or tax advice.
Valorin is an independent advisory firm, not affiliated with the FTA or MoF.