11 Apr Accounting vs. Finance: Which One Should You study?
Finance and accounting are two terms that are often used interchangeably and are even mistaken to be the same. Even the people who are struggling to choose one of these to study are sometimes not very clear about the difference. Both the fields are very different and someone working the job would know the exact difference. To put it simply, Accounting can be defined as the preparation, evaluation, and management of financial records. Finance, on the other hand, is the science of planning the distribution of assets and resources within the company. The difference is not limited to the definitions of the two, there are a many more differences that are mentioned here, and which could help you make a choice between the two.
Primary roles of accounting and finance professionals
It’s important for a company to be profitable not only in reality but on papers as well. By the means of accounting, the company keeps a track of how the liabilities that they have, the assets that they own, the taxes they need to pay and how profitable the overall performance of the company is. Doing this helps the business gain some clarity about making changes in their resource allocation plans or go on with the same arrangements. As an accountant, You need to keep a track of the payment status of the organization’s creditors. All these payments should be properly measured and the schedule for these needs to be maintained by the accounting professionals.
One of the most important functions of finance is to source the funds for the operations of the company. The organizations need to find ways to source the funds from various places and the finance professionals take charge to do this for the organization from a number of different places. The main goal of the finance professionals is to work towards maintaining the perpetuity of business. To ensure this, they need to invest money into building the organization’s core competencies. Finance professionals also give suggestions on resource allocation and practice financial decision making for them. Should the firm reinvest into the business to improve its processes? Should the profit be shared among shareholders? These are the questions that a finance manager helps in answering.
Specialization in choosing Accounting
You can specialize in topics such as auditing, tax, risk management and international accounting. Accounting careers typically involve analyzing and utilizing financial information in order to evaluate a the financial position of a business. This may involve anything from basic book-keeping to managing the balance sheets and income statements. The primary focus would be on the past records and the present reports of the organizational performance involving the creation and analysis of these records.
Specializations in choosing Finance
Some common specializations for those who study finance at a higher level include corporate finance, financial evaluation, capital markets, behavioral finance, econometrics investment management and some aspects of accounting as well. Finance careers typically focus on the management of current and future strategies of a business or organization, recording of the past and present income and expenditure. They also have the added responsibility of predicting and analyzing the potential for profit and growth, assessing the monetary resources, utilizing accounting statistics and reports and looking for future funding options.
Education qualifications to pursue accounting and finance
People interested in accounting can get a degree in Bachelor of Accountancy or Bachelor of Arts in accounts and can get certified as a Chartered Accountant(CA) as well.
People pursuing a degree in Finance can get a Bachelor degree in Bachelor of Arts of Finance and Master of Finance and can get certified as Chartered Financial Analyst (CFA) as well.
Potential career options for Accounting
- Budget Analyst
- Tax Advisor
Potential career options for Accounting
- Commercial Banker
- Financial Consultant
- Financial Manager
- Financial Trader
- Insurance Officer
Pursuing any of the above options will require you to get a degree first. You will have to put up with all the assignments, projects and the homework you will receive from the university. As much as a bulk of work it will be, the rewarding knowledge and marks will give you an edge when getting hired by the renowned firms and top business organizations.