Do you too have no idea of “Finance vs Accounting”
Some students think that finance and accounting come under the same domain of expertise. But, ask a finance guy or an accountant who has been working in a company. They would tell you how different these areas are in their nature, areas of expertise, and scope of work.
In this post, we will discuss both the domains and investigate how dissimilar they are. And yes, they are related. For instance, to become a proficient finance professional, you must have a basic knowledge of accounting. But, this does not mean that these are the same.
Let us get started the comparison!
Finance vs Accounting: A Comparison
To give you a clearer picture of the differences, we have tabulated the major points in the table below. So, hang tight and read on. Let us have a close look at the table below:
|Definition||Finance field is nothing but the science and technique of planning the distribution of assets and resources within the firm||Accounting is an art of reporting, summarizing, and recording the finance-related transactions|
|Education Requirements||To jump-start in this field, you must have a bachelor’s degree in finance, economics, accountancy, mathematics or an MBA degree or CFA, PRM, FRM, CFP, etc.||For this field, you need a bachelor’s degree in accounting or a master’s degree in accounting, or CA, ACCA, CPA, CMA, and CIMA|
|Networking Opportunities||Professionals of this field typically work within the financial sector. Alumni network is quite strong but not diverse as found in the consulting||The professionals will not get many opportunities as it is restricted within the specific domain alumni network|
|Compensation||As per the reports of the PayScale.com, the median salary for financial management professionals is USD 84,800 per annum||As per the reports of the PayScale.com, the median salary for accountants is $65,940 per annum|
|Existing Career Options||· Investment Bankers· Private Equity· Research Sell-Side Analyst· Buy-Side Analyst||· Chief Financial Officer (CFO)· Managerial Positions· Corporate Finance|
|Career Options||· Investment Banking· Corporate Finance· Equity Research· Risk Management· Quantitative Analysis· Project Finance· Technical Analysis||· Forensic Accounting· Management Accounting· Public Accounting· Financial Accounting· Auditing· Government Accounting|
|Employers and Clients||· Banks (Retail, Investment, and Commercial)· Insurance Companies· Operating Companies (Regular Businesses)· Research Companies||· Public Accounting Firms that Audit Larger Companies· Personal Tax Filing Firms· Operating Companies (Businesses)|
|Career Outlook||The US Bureau of Labor Statistics projected the growth of this field 12% between 2014 and 2024||As per the reports of the US Bureau of Labor Statistics, the expected growth for this field is 8% between 2014 and 2024|
One of the major differences between finance and accounting careers is the type of personalities and skills that are drawn to each of them. We have listed the personality difference below. Take a look:
- Business Development Skills
- High Attention to Details
- Problem-Solving Skills
- Concerned with Adding Value
- Think about Scenarios
- Risk Management
- Rules-Based Thinking
- Concerned with Accuracy
You can also understand the difference between finance and accounting based on responsibilities and job functions. Look at the following corporate functions to see the difference:
- Raising Capital (Equity and Debt)
- Funding the Business
- Seeking the Best Possible Risk-Adjusted Returns
- Optimizing the Weighted Average Cost of Capital of the Firm
- Budgeting and Forecasting
- Corporate Strategies
- Mergers and Acquisitions
- Financial Reporting
- Risk Management
- Internal Reporting
- Tracking of Expenses and Revenues
Finance vs. Accounting: Which is better?
The decision can be extremely difficult for an individual if they have not worked in either industry before. If you are also one of them, then you must consider all the factors listed above to decide the best fit option as per your educational background, interest, personality, skills, and career objectives.
To help you with the decision of Finance vs Accounting, a dedicated team of AEC is always there for you. Students can get in touch with us as we provide them with a list of top-rated universities/colleges around the world. We also help our students shortlist the universities and courses along with admission, study visa, scholarships, etc. Get in touch with AEC on +91-8448446609 or 011-43334444 or share your queries at firstname.lastname@example.org to get assistance for your career. You can also directly come to our office by booking your FREE counseling session.