Accounts V/s Finance

Accounting

Accounting is nothing but ‘recording of transaction in a systematic manner’. It is mainly concerned with recording the business and any other transactions in a monetary form whether the cash is involved or not at the time of recording the business transaction. It may be cash or credit transaction. Transaction is recorded for the future reference in only accounting or monitory form.

Accounting includes following functions :

1. Day-to-day recording of transactions in Day-Book

2. Verification of the prime books like cash book Journals and Bank book

3. Preparing & presenting financial statements (P&L and B/S).

Finance :

Finance mainly involves generating funds to meet the various cash flow needs of an entity. Finance functions begins with collecting the cash flow information from the accounting records and also prepare projections of cash flow. Finance activities are concerned with preparing budgets and compare the same with the actual results for finding variances. Here the sources and application of funds are prepared for both the budgets and actual scenarios.

Finance includes,

1. Co ordination for Bank transactions

2. Sourcing and Application of required funds

3. Preparing Budgets

4. MIS and EIS reporting

Finance is a part of Account as it encompass through the Accounting and Operations aspects of an organization.