Finance and accounting might sound like similar words, but they are actually two different terms. Both finance and accounting offer interesting career opportunities for youngsters and university graduates.

If you’re an undergraduate student, or if you’re simply curious to know what these terms mean, then this article will help you expand your knowledge. In particular, we will examine the differences between finance and accounting.

Definitions

Before discussing the differences between finance and accounting, it’s important to know what these terms mean. Therefore, definitions are presented below.

What Is Finance?

Finance is concerned with the management of the money of an individual or an institution. In other words, one can also say that the term finance deals with the investment of the money of an institution or individual.

In addition, finance is a broader term for the management of liabilities and assets for an institution.

The field of finance provides great career options, including in financial planning, wealth management, and investment banking. These professionals work on behalf of a business, company, or any other institution.

What Is Accounting?

The process of maintaining and recording a company’s financial records is known as accounting.

Accounting can often be an excellent option for undergraduate students in terms of career opportunities. If you aim to become a professional in this field, then you will be focusing on the day-to-day flow of money for an organization or company.

In addition, accounting professionals are responsible for checking account balances and ensuring the accuracy of financial statements.

Accounting and Finance: Major Differences

Accounting is a field that prepares and reports details about the financial records of a company or organization. These financial records are given for a fixed period of time (e.g., 6 months or 1 year).

On the other hand, finance is all about growing the money of an organization or company by investing it or managing it in a profitable way.

So, if you are interested in maintaining financial records and balances, then you should opt for accounting. Likewise, if you are interested in growing an organization’s money, the field of finance is a better option.

Both fields provide good salaries, which means that the decision you make as a student will mainly be based on your personal interests.

Accounting information is a key aspect to keeping an eye on the financial status and position of an organization. By contrast, finance is helpful for forecasting the performance of the company in the future.

Types of Clients In Accounting and Finance

In both accounting and finance, clients may be individuals, organizations, businesses, or governments.

Finance

  • Banks
  • Insurance companies
  • Research companies
  • Business startups

Accounting

  • Public accounting firms
  • Personal tax filing firms
  • Operating companies

Conclusion

As a student, choosing between accounting and finance might be difficult. To work in both fields, subject-specific skills and education are required. In addition, both fields provide good working environments and career opportunities.

In the sphere of business, both accounting and finance are extremely important. This is the reason why studying in either subject area is likely to generate many interesting career options for you in the future.

Frequently Asked Questions

How is finance different from accounting?

The world of finance and the field of accounting have a lot in common. First, almost all companies rely on accountants to maintain their daily financial records, including those that use finance professionals as well. Second, both fields offer good career opportunities that allow graduates to secure attractive salaries.

What is the career outlook for someone with a degree in finance?

Finance degrees open up a range of opportunities in many different industries. For example, you could work as a financial analyst, personal banker, credit controller or investment banker. In addition, many graduates go on to start their own businesses.

What is the career outlook for someone with a degree in accounting?

Public accounting firms are always on the lookout for graduates with accounting degrees. These firms offer excellent training and development programs that teach you how to become a successful finance professional. In addition, accounting careers give graduates a chance to work in a variety of different fields due to the extensive knowledge and expertise they have gained during their studies.

Which field pays more, accounting or finance?

Finance degrees tend to pay more than accounting degrees. However, this is not always the case, as some accounting jobs offer high salaries. The important thing is to research the different job options available in both fields and find the one that suits you best.

What is the difference between financial accounting and managerial accounting?

Financial accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions. Managerial accounting, on the other hand, provides information that helps managers make decisions about how to improve an organization's performance. In addition, managerial accounting focuses on internal financial information, while financial accounting focuses on the company's financial position and performance relative to other organizations.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.