Finance and accounting, these two topics play a very important role in the world of business. But, do they mean the same? How are they different? These are the basic questions that go on in an individual’s mind in case he/she is interested in business, finance, etc. These two have a lot of similarities because of which it becomes difficult for one to choose but there are many differences too and you need to know the difference between them in order to successfully choose a path for yourself.
Accounting basically involves collecting and organizing financial information and then preparing financial statements out of it. It includes financial transactions, analyzing financial health, and reporting information about financial operations. Those who go for accounting as a major usually get to specialize in topics like auditing, tax, risk assessment, international, and management accounting. Common jobs in accounting include tax advisor, risk assessment, auditor, accountant, etc.
Finance is not about collecting the financial data, it is about analyzing and interpreting that data. This is a field that deals with the manipulation and shifting of money. Finance works to plan the distribution of business assets like management of investment portfolios and seeing how the company can grow. Finance careers basically focus on the management of present and future figures of an organization and accounting records of past and present income and expenditure of the company. Common jobs in finance include commercial banking, financial advisor, investment banker, Hedge fund manager.
Accounting careers are suitable for those who enjoy diving into data and ensuring accuracy in financial transactions and statements. Accounting can be broken down into three different categories which are:
Public accounting: This involves preparing and maintaining records and financial statements on a daily basis.
Auditing: An auditor's role is to ensure that the financial records of an organization are correct. It is a very detail-oriented job, you might have to spend a great deal of time checking records thoroughly.
Tax Planning: This involves not just preparing tax returns but you might also need to do tax consulting and tax planning. At times, tax planners might even need to offer financial advice.
Finance can be broken down into two major categories which are:
Traditional Finance: An organization usually relies on the input of a finance expert for its financial health at present and also for the future. Jobs in finance requires one to make strategic and difficult decisions. Proper knowledge about global markets and investment is very essential in this area.
Financial Planning: In this area, you basically have to help people out with their finances by looking into their income, taxes, insurance, and investment. Using the knowledge of investment and taxes you then have to create an investment plan which would in turn help them achieve their goal in the particular time frame.
It is a fact that both finance and accounting careers can be extremely rewarding and are also the two most popular and respectable business degrees. There are many certifications available for finance and accounting professionals which you can take in order to improvise your career like CA, CPA, CIA, CMA, EA, etc. and there are many course providers like Wiley, Becker, Simandhar Education, CMA exam academy which will help you achieve these certifications successfully.
If you are having a difficulty in choosing between them you need to understand your strength and interest and that will help narrow down your decision. Hope this article gives you clarity on how do these two differ and on what basis you must make your choice.