What is accounting and finance, and what’s the difference between them? More importantly, if you’ve been considering a career in either, which one will be best suited for you?
In this article, we’ll take a deep dive into accounting vs. finance, and lay out the basic skills, education, and considerations of both prospective careers so that you can choose what’s right for you.
What Is Accounting?
Accounting takes care of the day-to-day management of money flow. This may include managing financial reports and records, as well as keeping track of the finances in businesses or private individuals. The field requires detail-oriented personalities and the ability and skill to manage numbers.
What Is Finance?
Finance, on the other hand, focuses on strategizing for company finances by projecting future growth, analyzing expenditures, and trying to influence numbers, as opposed to recording them.
Accounting vs Finance: The Basics
Both accounting and financing require an attention to detail and lots of numbers. The main difference lies in the focus of those numbers.
Typically, accountants draw up financial reports, which then finance uses to strategize future growth for companies. The difference between the two jobs require different skills, personalities, and goals.
While accounting is focused on risk-management in financial matters, finance is more future-oriented and focused on business development and growth.
Accounting vs Finance: Skills
Accountants need to be detail-oriented and usually think in terms of rules and predictable procedures. Accountants are concerned with accuracy and reporting, as opposed to working with the numbers. Accountants need to be very involved with tax laws and procedures, and so these personalities will need to have an interest in learning the ins and outs of the tax laws.
People in the finance careers will need to be analytical and business-minded. They will also need a high attention to detail. But in their case, they use the information that they gather for future business growth, and will therefore need problem-solving skills and future-oriented thinking. Their education focus will be more about business administration than tax laws.
Accounting vs Finance: Degrees
Both accounting and finance require at least a bachelor’s degree in order to get into the field, and some employers may look for master’s degrees in accounting or business administration as well. In general, further education is helpful if you wish to work in a specialized job.
If you’re interested in the finance world and looking for a high-quality yet affordable and flexible program, University of the People offers business administration degrees completely online along with some potential certificate programs in business administration. We are dedicated to ensuring that quality education is affordable for all prospective students, and that’s why our accredited programs are completely tuition-free.
Prospective accountants may need to become Certified Public Accountants (CPA) in order to file reports with the Securities and Exchange Commission (SEC). The degree in accounting will focus on quantitative analysis, internal auditing, income taxation, business law, tax law, and accounting methods, practice, and theory.
Advanced or specialized careers in finance may require up to 5 years of experience in related fields. Education in finance will focus on mathematics, financial markets, investment portfolios, investment analysis and valuation, economics, and international finance.
Accounting vs Finance: Careers
Accounting and finance graduates have many options and opportunities for a career, as these positions are in high demand, and job growth is predicted to continue steadily. Those who earn specialized degrees or master’s degrees with specializations will likely have a leg up.
Accountant jobs include:
- Tax manager
- Fund accountant
- Valuation analyst
- Financial reporting accountant
- tax accountant
Accounting careers deal with the flow of money in and out of businesses, and manage tax obligations for companies. This involves keeping track of invoices and the daily operations of a business, creating quarterly and annual financial reports, analyzing profits, managing debt, auditing transactions, and reporting earnings.
Some finance jobs may be:
- Financial analyst
- Investment banker
- Financial examiner
- Personal financial advisor
- Money manager
Finance careers deal with evaluating assets and investments of a corporation with the goal of improving profit. This may involve strategizing and advising in the area of investments and spending in order to budget, invest, lend and borrow, and forecast future gains.
Accounting vs Finance: Salary Expectations
The median salary for accounting and auditing, according to the Bureau of Labor Statistics (BLS), is between $71,550 and $76,540. In addition, the BLS predicts a 6% job growth between the years 2018-2028.
The median salary for finance careers ranges depending on the job. For example, a financial analyst makes a median salary of $85,660, according to the BLS, and financial managers make a median salary of $129,890. Finance jobs, such as financial analysts and managers, are also predicted to have a 6% growth rate between 2018-2028.
Making the Choice
If you’re choosing a career in the business field, choosing between accounting and finance careers can be crucial. Whether you’re a new student, ready to take out student loans and begin your education, or whether you’re making a career change, it’s always good to look ahead at your different options.
Based on the information laid out in this article, let’s go over some of the considerations when choosing between accounting and finance. Ultimately, it will be important to look at your own skills and strengths, and choose a career based on your own considerations, such as education options and interests.
If you choose a career in accounting, you can expect to report to the chief financial advisor in your company, and may hold the title of tax manager, financial reporting accountant, or fund accountant. Alternatively, you can earn your Certified Public Accountant (CPA) license and work for a public accounting firm. In an accounting firm, or personal tax filing firm, you can expect the titles of accountant, budget analyst, bookkeeper, and others.
If you choose a career in finance, you can expect to work for individuals, corporations, large businesses, or governments, with your main employers being banks or corporations. Jobs that are available in this field range from titles such as financial analysts, financial advisors, investment bankers, and personal investment advisors.
The Bottom Line
Though accounting and finance are in similar fields, we’ve seen that they are two different and unique career paths. Deciding between accounting vs. finance may be an obvious choice for you after reading the basics, or maybe you’ll need some time to weigh the options.
Either way, both accounting and finance can be steady and successful careers for graduates and prospective students, so if the business field is right for you, start earning your bachelor’s degree now so that you’re one step closer to your dream job.