Accounting and finance are two phrases that are often used in the same context. While they are closely related, there are evident differences that set them apart. Individuals who are interested in pursuing a career in either one of the fields must understand the difference between them in order to identify their interest and make a clear career choice.
Accounting professionals summarize, analyze, and record financial information in order to maintain financial statements that adhere to the Accounting Standards (AS). Accounting also involves generating reports that are to be presented to management, shareholders, investors, creditors, auditors, etc. at the end of every financial year. Post an audit, the financial statements are made public, where anyone can view the position and performance of the respective company for the respective period.
Finance is denoted as the science of acquisition and investment of the fund in the most effective manner. It is a broader concept that includes constant analysis of money and capital market along with the arrangement and management of funds. Financial risk management here helps in analyzing the budget for determining an investment plan, thereby lowering the financial risks for an enterprise.
Accounting vs Finance
Following are the key difference point between accounting and finance:-
|Meaning||Accounting focuses on the daily movement of money within the company||Financial management is a broader concept that includes the management of money and assets and planning for the company’s financial growth.|
|Nature||It involves tracking and reporting the flow of money and ensuring compliance with the best accounting practices||It focuses on increasing the ROIs and mitigating the possibilities of financial losses.|
|Objectives||Accounting professionals need to be meticulous with every detail associated with day-to-day transactions.||Financial management professionals need to plan and work to meet the long-term financial objectives of the company.|
|Career Options||You can have a career as a controller, tax manager, fund accountant, staff accountant, treasurer, etc.||You can be a financial analyst, investment banker, financial examiner, personal financial advisor, etc.|
Starting a Career
To start your career in either one of the above fields you have to first obtain a bachelor’s degree (BAcc or BAFM). Subsequently, if you want to pursue a career in accounting, then you need to obtain an MBA degree in your preferred field of accounting (tax accounting, government accounting auditing and assurance services, cost accounting, etc.). To become a financial management professional, an Advanced financial management course online would help you strengthen your portfolio and gain a competitive advantage in the job market.
The transaction records and reports generated by the accounting team serve as the basis of work for the financial team. Evidently, both spheres complement one another and hold equal prominence in any company. Additionally, both fields offer good compensations (provided you do well in your chosen field), making them equally fruitful career options.