Bookkeeping
Bookkeeping for Trading Companies in Dubai
We keep a trader's books the way margins really work: every shipment costed to the shelf, every import VAT line in the return, every stock count agreed.
- Landed cost per item, so your margins are real
- Customs duty and import VAT posted to the right accounts
- Stock agreed to physical counts at least every quarter
Who this is for
- You import by container or by courierAnd price from the supplier invoice, not the landed cost.
- You sell on creditSo knowing who owes what, and for how long, is cash.
- You pay suppliers in dollars, euros or yuanAnd exchange differences sit unexplained in the ledger.
- Your stock never agrees to the countAnd nobody can say whether it is shrinkage or bookkeeping.
What is included
- Purchase invoices, freight, duty and clearing booked to each shipment
- Landed cost per item calculated and carried into stock
- Import VAT accounted in the return under the reverse charge
- Sales invoices, credit notes and customer ageing every month
- Foreign currency payments revalued and exchange differences explained
- Stock reconciled to physical counts, with slow-moving lines flagged
- VAT returns prepared from the reconciled ledger
Why trading books go wrong
A trader's profit lives in three numbers: what the goods really cost, what they sold for, and what is still on the shelf. Most trading ledgers get at least one of them wrong.
The usual cause is costing stock at the supplier's invoice price. Freight, insurance, customs duty and clearing charges are then booked as expenses, so every item looks more profitable than it is. Under IFRS, which UAE companies follow, inventory is carried at the lower of cost and net realisable value, and cost includes the costs of bringing goods to their present location.
Customs duty for most goods entering the UAE is 5% of the CIF value under the GCC common tariff. For a VAT-registered importer, import VAT is normally accounted for in the VAT return under the reverse charge rather than paid in cash at the border.
A worked example: one container
A Deira trader imports 1,000 units invoiced at USD 20,000. At the dirham's peg of 3.6725, that is AED 73,450.
- Freight and insurance: AED 4,550, so the CIF value is AED 78,000
- Customs duty at 5% of CIF: AED 3,900
- Clearing and local transport: AED 1,100
Landed cost is AED 83,000, or AED 83 a unit, not the AED 73.45 on the supplier invoice. Price at AED 90 believing the margin is 18% and the real margin is under 8%.
Import VAT is 5% of the CIF value plus duty: 5% of AED 81,900, which is AED 4,095. Posted correctly, it appears as both output and input tax in the same return, so it costs nothing. Missed, it leaves the return wrong.
Gold, diamonds and precious metals
Dealers in the Gold Souk face an extra layer. Supplies of gold, diamonds and certain precious stones between VAT-registered dealers generally run under the domestic reverse charge, which only works if the buyer's declarations and the supplier's records line up. We keep those declarations on file against each invoice, so the reverse charge holds up in an audit.
The mistake we see most
Treating the supplier invoice as the cost of stock.
It flatters every margin report, understates closing stock and makes the year-end adjustment a surprise. Cost each shipment when it lands, and the numbers you price from are real ones.
How it works
- Send one month and one shipmentBank statements, sales invoices and the paperwork for a recent import.
- Free reviewWe show you the landed cost on that shipment and what your books say.
- Fixed monthly quoteBased on shipments, invoices and stock lines.
- Monthly close with marginsEach close pack shows gross margin you can trust.
Bookkeeping for Trading Companies in Dubai — questions we get asked
Do you handle customs duty and import VAT?
Yes. Duty is added to the cost of the goods; import VAT for registered importers is accounted in the VAT return under the reverse charge, and we reconcile it to the customs declarations.
Can you manage stock in our software?
Yes, in Zoho Books, QuickBooks, Xero or Tally, or alongside a separate inventory system if you already run one.
How often should stock be counted?
At least at every quarter-end for most traders, and monthly for high-value lines. We reconcile each count to the ledger and explain the difference.
We trade in several currencies. Is that a problem?
No. We record each transaction at the right rate, revalue open balances at month-end and show exchange gains and losses separately.
Do you work with Gold Souk and Deira traders?
Yes. Our office is in Deira, and precious metals and wholesale trading are the kind of books we keep every month.
Book your free compliance review
Fifteen minutes, no charge, and you leave with a written summary of where you stand whether or not you engage us.
