Accounting vs. Finance: Understanding the Differences by Janie Kiser
Though accounting and finance are two different disciplines, many students, job seekers, and even employers are not fully aware of the differences between the two fields. Whether you are looking to employ a finance manager or an accountant, choosing a career, or selecting an educational program, it is essential to know how accounting and finance are distinct from each other. Keep reading to learn what distinguishes these two fields.
Points of Differences
There are various ways of differentiating between accounting and finance. Apart from differences in meaning, they don’t have the same course contents. The job specifications of accountants are also different from the job definition of finance officers or managers. Given the difference in tasks handled, people in these fields don’t receive the equal salaries, even from the same organization.
Differences in Meaning
Accounting, as a discipline, is a study of the art of recording and reporting the financials of an organization or business entity, including all receipts related to particular purpose or period. An account ledger contains all the income of a company and also shows how these revenues are expended and for what reasons. Students of accounting learn various accounting standards for keeping records and track of financial statements.
Finance, on the other hand, teaches the student how to manage the fund or finance of a business entity efficiently to maximize profit and reduce costs. The course also studies money, its acquisition, and time value. Finance as a field of studies covers accounting. Put differently; accounting is a child of finance while finance is the mother of accounting.
Difference in Job Titles and Specifications
Job titles in the accounting department of business include auditors, bookkeepers, accounts payable clerks, financial reporting accountant, accounts receivable clerks, tax accountants, treasurers, controllers and others. All the employees in accounting departments are under the control of the chief financial officer of the business because they report to him or her. Job titles in the financial department of a company include financial purchasing manager, financial manager, financial analyst, investment bankers, personal financial advisor, financial examiner, money manager and others.
Places of Work
Both accountants and financial professionals can work for the same business but in different departments. An accountant will work in the accounting department of a business such banks, government agencies, business entities and others. Similarly, a finance officer can work in accounting department of the same business including corporate or consulting finance business, insurance companies, bank and others.
Difference in Salaries
The salary ranges in both fields are not the same. According to Bureau of Labor Statistics’ projection, there are fantastic prospects in both areas now and in the future. The BLS also projected the increase in job opportunities for finance professionals and accountants between now and 2024. In general, the salary ranges of people in the finance departments of businesses are higher than those of people in accounting departments.
Accounting and finance are related in a number of ways. In the first instance, they are all part of economics. Accounting forms part of finance and finance depends on accounting to a considerable extent. It could be said that account ends where finance begins. Some of the courses studies in accounting are also studied in finance.
Both accounting and finance have good future prospects. With expertise in either of the two, your chances of getting a rewarding job are high. However, it is important to understand the differences between the two so that you apply for a position that fits your area of specialization. If you are looking for employment opportunities, Delta Dallas can help. To learn more, reach us at (972) 788-2300. You can also make your inquiries or ask us any question by completing our contact form and one of our customer care managers will get back with you, as soon as possible.