Bookkeeping

Bookkeeping involves accounting for the assets and liabilities of a company. There are three main flavors of accounting: financial accounting, management accounting and tax accounting.

Financial Accounting

Financial accounting is concerned with gathering, analysis and reporting of financial transactions in relation to a company’s activity. Financial statements are prepared from this information for both inside and outside users. It is important for these statements to be prepared using standardized guidelines (Generally Accepted Accounting Principles - GAAP) to give a true picture of the company’s finances.

Management Accounting

Management accounting is communicating financial information to the manager’s of a company, to enable them to take action in pursuit of achieving the goals of the business. Management accounting is a tool for internal decision making which may be used to ascertain the cost of a product or to decide whether to make or acquire that product for resale.

Tax Accounting

Tax accounting is an accounting method that is focused on taxes rather than the appearance of the financial statements. Tax accounting is governed by the comprehensive rules of the Internal Revenue Code which must be followed by business and individuals when preparing their tax returns. If applied correctly, the rules of the code can ensure that you pay only the taxes that you are liable for.