In 2009, Tailored Accounts, then known as Harry’s Bookkeeping, was founded as a bookkeeping company. In 2012, to expand its services range to financial consulting and training, the firm was renamed to Tailored Accounts. Although bookkeeping still contributes greatly to Tailored Accounts’ annual revenue, Tailored Accounts aims to position itself as Canberra’s leading management accounting company in the next 10 years.
This vision was derived from our prediction that with digital disruption, many bookkeeping activities will be automated. Thus, there will not be many bookkeepers in 2025, and only a few outstanding bookkeepers who could adapt well and take on advisory roles in the digital economy could survive and grow.
With the desire to be one of the survivors, moving toward management accounting was be a strategic movement of Tailored Accounts.
“I could see there was a gap in the market between a bookkeeper and an accounting firm. No one was providing services like what I wanted to offer, which was management accounting.”, Harry Hoang, Executive Director of Tailored Accounts.
So, what is the difference between bookkeeping and management accounting?
Bookkeeping is the process to record, analysis and interpret financial transactions and is considered as a part of accounting process in business.
Bookkeeping activities are performed by a bookkeeper. The duty of a bookkeeper is to record day-to-day financial transactions of a business and then produce financial statements so that an accountant can easily perform legal and tax management in a timely manner. In the past, these activities involve much manual jobs. Financial records must be up to date and accurate since it is essential to the business performance evaluation.
Some tasks that are regularly undertaken by a bookkeeper can include:
- Processing invoices, receipts, payments, and other financial transactions
- Processing and maintaining payroll system
- Preparing initial financial statements
- Reconciling accounts and preparing reconciliation reports
- Managing your accounts receivable and accounts payable, i.e. amounts owing by debtors, and amounts owing to creditors
- Calculating GST
- Preparing and lodging your BAS
- Designing, establishing and reviewing accounting systems
2. Management accounting
Management accounting is a field in accounting beside financial accounting, auditing and tax accounting. Management accounting involves the process of producing management reports consisting of accurate and timely financial and statistical information, mainly for internal management to make day-to-day and short-term decisions.
Main duties of a management accountant include:
- Advise managers about the financial implications of projects.
- Explain the financial consequences of business decisions.
- Formulate business strategy.
- Monitor spending and financial control.
- Conduct internal business audits.
- Explain the impact of the competitive landscape.
- Bring a high level of professionalism and integrity to business.
From the preceding analysis, it is obvious that bookkeeping is the base for management accounting. Hence, as Canberra’s leading bookkeeping firm with a team of qualified accounts, Tailored Accounts had no issues with the transition. In fact, the contribution of management account sector has been increased over the last four years, and Tailored Accounts is confident in achieving its objective.