Every field out there has its enthusiasts, people who enjoy doing something in particular more than other things. Some enjoy working with words, so they choose word-centric careers, and some like crunching numbers, so they go towards jobs where numbers prevail.
Today, we’re going to be talking about accounting and finance and finding the differences between them. Want to know more about this subject? Read on below.
What Is Accounting?
Accounting can be defined as the discipline that helps businesses understand, record, and organize their financial information. Through accounting, the raw financial records—taxes, transactions, projections, and others are recorded and then broken down into easy to understand pieces of information about your business’s financial state.
Thanks to accounting, a business or individual can know if they’re profiting, their cash flow, the current value of their assets and liabilities, and many other financial details.
Types of accounting
- Financial accounting
- Managerial accounting
- Cost accounting
- Auditing
- Tax accounting
- Fiduciary accounting
- Forensic accounting
Education
A bachelor’s degree in accounting is primarily needed if you want to join this field. With this level of education, you can land an entry-level job in accounting. However, students shouldn’t expect to get a job right away by earning a degree in accounting. Countless certifications can help you advance the skills and earn the experience required by an employee. So, those with goals to climb the accounting ladder should buckle up as there is a long educational journey ahead.
Accounting skills
Besides education, there are a few skills that a potential accountant should have:
- Business acumen
- Teamwork
- Proficiency in IT
- High level of numeracy
- Analytical skills
- Commercial awareness
What Is Finance?
Finance is a broad field that includes all the activities done with the intention of managing money and the process of acquiring needed funds—cash, credit, investments, capital markets, debt, and banking.
It can be easier to grasp the definition of finance when there are examples of the activities that fit under the finance umbrella. Some of the most used examples are as follows:
- Lending money to people through a mortgage with which they can buy a house
- Building budget and financial models in Excel for a particular corporation
- Investing in stocks, bonds, or guaranteed investment certificates
Types of finance
- Corporate finance
- Financial planning and advising
- Banking
- Accounting
- Investment
- Insurance
Education
To be considered for an entry-level job position in finance, you should hold a bachelor’s degree in finance or a similar business degree. However, students ought to know that the higher they want to see themselves on the ladder of success in this field, the higher their education level should be.
Finance skills
Besides a degree, potential finance employees are also required to have a set of finance skills. Find those skills listed below:
- Cash flow management
- Risk analysis
- Budgeting
- Financial planning
- MS Excel
- Problem-solving skills
- Decision-making skills
- Analytical thinking
- Verbal communication
Careers in Accounting and Finance
When deciding to join a particular industry, individuals need to know the benefits of being a worker in that field. Luckily for you, working in both these fields have numerous advantages. Let’s take a look at them.
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Working in accounting and finance isn’t always a walk in the park; they too have their drawbacks. For some, these disadvantages might be just some inconveniences that any job has, but they might be quite a big deal for some. So, take a look at some of the most common disadvantages of both the accounting and finance fields.
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Finance vs. Accounting: The Difference
Finally, we’ve come to the question whose answer we were looking to know all along. While you might have gotten an idea of what those differences might be, here we’re going to simplify it. The difference between finance and accounting is found in what these two terms entail. Finance is a broader term that includes managing the assets and liabilities, as well as the planning and organizing of future growth. On the other hand, accounting focuses on the daily money flow in and out of a business, company, or institution.
Technically, they use the same information. The very thing that makes them different is what they choose to do with that financial information. While accounting might use financial information to manage the day-to-day money transactions, finance uses it to analyze the potential growth patterns to strategize company finances.
Finance and accounting are both exciting and compelling fields to study and work in. Now that you know what that difference is and if you have decided to study one of them, Bay Atlantic University offers both of these programs and is happy to welcome you to our Washington campus. Don’t hesitate to reach out to us if you have any questions in relation to these programs.