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TAX ACCOUNTING vs. MANAGERIAL ACCOUNTING
What's The Difference and Why is it Important?
What's The Difference and Why is it Important?
All of these duties are important, and so is the tail on a dog - just understand the tail does not wag the dog! It is important that you understand tax
accounting has very little to do with helping you run your business and everything to do with paying taxes and keeping the tax preparer's boss, the
government, happy!
Managerial Accounting
Is Internal; its purpose is to help you operate and grow your business profitably.
For example...The 5 key performance Indicators, cash flow reports, accounts receivables, accounts payables, financial statement analysis, job costing,
profitability analysis, business process management, 80/20 rule implementation, when to grow the business, what markets to serve, when to hire more
people, loans, lines of credit, bonds, performance bonds, insurance cost savings, and your overall business strategy.
WHERE WE COME THROUGH...
The best way to get a clear financial picture of your business isn’t to pit the two systems against each other (managerial vs. financial/tax accounting), the key
isto use them in tandem to gain insight into different parts of your business.
Think of each system as a side of your business’s financial coin. If you only ever looked at one side of that coin, your knowledge of the company would be
incomplete. Ideally, your business needs both sides — managerial accounting and financial accounting — to be successful!
Like most accounting firms, WE PROVIDE...
Unlike most firms, WE ALSO PROVIDE...
accounting has very little to do with helping you run your business and everything to do with paying taxes and keeping the tax preparer's boss, the
government, happy!
Managerial Accounting
Is Internal; its purpose is to help you operate and grow your business profitably.
For example...The 5 key performance Indicators, cash flow reports, accounts receivables, accounts payables, financial statement analysis, job costing,
profitability analysis, business process management, 80/20 rule implementation, when to grow the business, what markets to serve, when to hire more
people, loans, lines of credit, bonds, performance bonds, insurance cost savings, and your overall business strategy.
WHERE WE COME THROUGH...
The best way to get a clear financial picture of your business isn’t to pit the two systems against each other (managerial vs. financial/tax accounting), the key
isto use them in tandem to gain insight into different parts of your business.
Think of each system as a side of your business’s financial coin. If you only ever looked at one side of that coin, your knowledge of the company would be
incomplete. Ideally, your business needs both sides — managerial accounting and financial accounting — to be successful!
Like most accounting firms, WE PROVIDE...
- General Bookkeeping
- Account Reconciling
- Processing Employee Payroll
- Completing quarterly and annual tax reports
- Preparing and processing tax payments
- Estimate and track returns
- Develop financial statements for payroll processing, account reconciliations, account receivables, account payables, revenue, expenditure, etc.
- Maintain accurate accounting records for future references
- Respond to accounting related questions and inquiries from employees
- Ensure financial records comply with company policies and accounting principles
- Perform month end closing activities such as account reconciliation, revenue accounting, expense accounting, etc.
- Assist in preparing necessary documentations for annual financial audits
Unlike most firms, WE ALSO PROVIDE...
- Annual Profit Planning
- Gathering and analyzing financial information for internal use
- Assist in account receivables and payables activities
- Monthly Profitability & Budget Reporting
- Debt Management
- Credit Acquisition
- Cost Benefit Analysis/ROI Tracking
- Assisting the company in managing its investment portfolio
- Evaluating the company’s performance using key data
- Make forecasts to assist business planning and decision-making
- Conduct risk assessment and advise on ways to minimize risk
- Advise on problems and suggest process improvements based on profitability
On the surface, financial accounting vs. mangerial accounting may not seem like it’s relevant to your business. But
pop the hood, so to speak, and you’ll quickly see how the two types of accounting are different — and why both are
extremely important for your business.
Tax Accounting
Is External; its purpose is reporting income, preparing tax forms and making certain you pay your fair share of
taxes.
For example...Quarterly tax reporting, annual tax returns, state, county, city and local business and occupation
taxes and sales tax reporting. Financial/Tax Accountants are good people, and they have their place in the
accounting world, which is to conduct regular bookkeeping and tax preparation!
pop the hood, so to speak, and you’ll quickly see how the two types of accounting are different — and why both are
extremely important for your business.
Tax Accounting
Is External; its purpose is reporting income, preparing tax forms and making certain you pay your fair share of
taxes.
For example...Quarterly tax reporting, annual tax returns, state, county, city and local business and occupation
taxes and sales tax reporting. Financial/Tax Accountants are good people, and they have their place in the
accounting world, which is to conduct regular bookkeeping and tax preparation!
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2273 McCoy Road; Suite B
Sun Prairie, WI 53590
Office: 608.295-8537
Email: info@thepowerr.com
Sun Prairie, WI 53590
Office: 608.295-8537
Email: info@thepowerr.com
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