Manufacturing is the process of creating a finished or semi finished goods through value addition to the raw material using machines, labour, tools, chemical and biological processing.The manufacturing process combines a variety of human activity, from handicraft to high tech, but is most generally applied to industrial production, in which raw materials(like plastics, coals, cured oils, gasses etc.) are processed and transformed into finished or semi finished goods on a large scale which are able to use by the other manufacturing units or by the end consumers.
Unique International Financial Reporting Standards for Manufacturing Business
The manufacturing industry has to deal with high level of inventory stock to support its production units, so the most commonly used accounting standard in such industry is IAS 2 – Measurement of Inventories, which is explained below:
IAS 2 – Inventories The standard underpins the guidance for recognition of inventory in financial statements.The standard explains that inventories should be measured at the lower of net realizable value(NRV) and cost and defines methods of determining its cost, including specific identification( in some cases), first – in first – out(FIFO) and weighted average cost.
Standard costing is a significant toolfor a manufacturing business.Standard costs are commonly associated with a company working in manufacturing sector, the costing method used in calculating standard costs of direct material, direct labor, and manufacturing overhead.
Rather than assigning the actual costs of direct labor, manufacturing overhead and direct material to a product, many manufacturers used to assign the expected or standard cost and the comparing this standard cost with actual cost incurred, by this they can find the variances in the estimates.So they can find the area which is consuming higher cost than expected.This will help to reanalyze the inefficient process to ensure better productivity and efficiency.
WeAccountax team will ensure adherence to the accounting standardfor measuring and recording of your inventory of raw material, work in progress and finished goods, together with giving best recommendations to achieve the desired efficiency of your manufacturing processes.
Accountants Specialized in Manufacturing Sector
WeAccountax is London based, well reputed firm of expert accountants and business advisors with many years’ experience supporting a vast range of sectors including manufacturing businesses.
At WeAccountax, our professional accountants having specialized knowledge of manufacturing can offer the practicable and realistic recommendation for your business which surely will help to remain your business competitive.You will have an allocated accountant working alongside you who has a vast experience in achieving results for other businesses similar to your own manufacturing industry.
We are currently working for more than 30 manufacturing businesses, which are primarily family run SMEs and owner – managed working in London and EU countries.
By working closely with a vast portfolio of manufacturing businesses for many years, we come to know the significance of advice, planning and high quality financial reporting for manufacturing businesses.We can quickly source the most qualified specialists in any region, whether you are opening a branch office in Asia, contemplating a merger in South America, initiating an expansion plan in the Eastern Europe, or property venture in United States.
The challenges and opportunities presented in the manufacturing industry are often exceptional and can be highly complex. We support clients with a full range of accounting services for manufacturing tailored to their specific requirements. This often includes: