Finance Vs. Accounting Differences That You Must Know

Finance Vs. Accounting: Differences That You Must Know

Although there are many similarities between finance and accounting, they are two distinct disciplines. Do you have a keen interest in financial figures? If yes, then choosing a career in accounting or finance can be a wise option. But, choosing between the two degrees can be difficult, but with a few tips, you can choose one. In this guide, you’ll get a clear overview of the two career fields and which of the two is suitable for you. 

 

Also read:- 

Types of Account That You Can Become in Future 

 

Difference Between Finance Vs. Accounting

The main difference between finance vs. accounting are:- 

Those who work in finance focus on planning and directing the organization’s financial transactions. 

 

However, those who work in accounting focus on recording and reporting those financial transactions. 

 

Accounting  Finance
Clients Individuals, businesses, governments Individuals, businesses, governments
Main Employers Public accounting firms & corporations Banks & corporations
Financial Statements Prepares them  Analyzes them 
View Point Backward looking Forward looking
Focus Accuracy & reliability Insights & analysis
Business Purpose Communicating financial position  Focus on adding value 
Attention Span High High
Designations CPA MBA, FMVA

 

What is Finance? 

Finance is a comprehensive term related to managing money that includes budgeting, forecasting, saving, lending, and borrowing. The finance industry comprises three subcategories personal finance, corporate finance, and public finance. 

 

Careers in Finance

Careers in finance may include:

  • Financial broker
  • Investment banker
  • Financial planner
  • Financial manager 
  • Financial advisor 
  • Financial analyst

 

The financial advisors evaluate, control, or govern the finances, investments, and assets of an organization to provide profitability. Working in the finance sectors gives exposure to working with other organizations such as government agencies, banks, investment firms, services, stockholders, and suppliers. 

 

What is Accounting?

Identifying, recording, and communicating an organization’s economic result is accounting. The main areas of specialization in accounting, according to Investopedia, are financial accounting, managerial account, and cost accounting. The professionals in accounting make use of a standard set of rules and principles, known as the GAAP. GAAP extends as generally accepted accounting principles for tracking and reporting on business financial transactions. Also, they manage the general ledger, cash flow, and tax obligations. 

 

Accountants have to measure business activities, process the information into reports, and impart decision-makers’ results. 

 

Careers in Accounting

Careers in accounting include:

 

  • Auditor
  • Accounts clerk
  • Tax accountant
  • Cost accounting manager
  • Bookkeeper 
  • Financial reporting accountant 
  • Controller
  • Treasurer
  • Technical accounting manager

 

According to a 2016 Robert Half Survey, the CFOs value both hard and soft skills equally when filling positions. They include Excel, ERP experience, SQL, Microsoft Visual Basic, and Business Intelligence Software in hard skills. More so, the soft skills include communication, leadership, and customer service. 

 

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