By DeVry University
To those who have never studied finance or accounting, the two terms can seem similar. But when it comes to finance vs accounting, these topics are actually quite distinct.
There are areas where finance and accounting overlap and the two fields can tend to work very closely with one another. In a nutshell, accounting focuses on the details of financial transactions while finance focuses on the bigger picture that can include investments, analyses, economics and money and banking.
If you've ever wondered what the difference is between accounting and finance, read on to learn the basics of each field and gain an understanding of their similarities and differences. To help you distinguish these closely related fields, we'll explore the following sections:
A Career in Finance – What is It?
If you choose to pursue a career in finance, you'll explore a field that is focused on the creation, management and investment of money. Many careers in finance deal with the big picture of how a company makes money and how that money is spent or invested.
Finance can often be broken up into three separate fields: personal finance, public finance and corporate finance. As you might expect, corporate finance focuses on financial considerations for a business; personal finance deals with financial considerations for an individual or family; and public finance concentrates on the way the government impacts the economy.
Finance and economics share some similarities, but whereas economics is mostly concerned with the study of money, finance analyzes the way money is utilized in order to draw conclusions as to how it could be put to its best use.
Types of Work in Finance
Finance is a vast field that can encompass a variety of different professional roles. Employment opportunities can span across a range of industries, as major companies need financial experts to help them maximize profits for shareholders and the company. Some common career areas and related job titles in finance may include:
- Banking: Finance specialists who work in banking may work in one of two areas: at the planning or management level of the banking business where they set goals and pursue outcomes for the bank branch or company or they can work directly with customers, such as in the role loan officer.
- Insurance: Finance plays a critical role in insurance. In order to run an insurance company, these professionals are trained to balance risk against potential reward to effectively guide their clients’ investments.
- Brokerage: Brokers research the market in order to provide clients with investment plans and strategies. In certain cases, they also sell specialized financial products and services to high-net-worth clients.
- Financial Planner: Financial planners may advise companies or individuals, working with clients to help them meet their long-term financial goals. They create long-term plans that people use to stay on track for milestones such as home ownership, retirement, or a child going to college.
- Financial Analyst: Financial analysts work for financial institutions such as banks assessing the performance of various investment options. They use this research to point companies toward profitable investments.
A Career in Accounting – What is It?
A career in accounting can be a good choice for people who are detail oriented and numbers focused. Accounting specifically involves the measurement and communication of financial concerns for a business or individual. There are several different fields of accounting, each with their own unique focus and standards, but a few overarching principles exist within the accounting world. In particular, the double-entry system is standard across all accounting professions.
If you choose to work in accounting, you may find yourself tracking the revenue and expenses of a business and then turning that information into digestible reports. Some accountants are solely involved in the tracking process, but many of them help provide recommendations to businesses based on an analysis of their revenue and expenses.
Types of Work in Accounting
Accounting contains several different disciplines that can be applied to a wide variety of professions. Some jobs in the accounting field include:
- Public Accountant: Public accountants (typically referred to as CPAs or certified public accountants) help people and businesses reach financial goals through an analysis of their finances.
- Cost Accountant: Cost accountants specialize in reviewing, analyzing and reporting on the costs associated with producing and selling goods and services. Companies may rely on cost accountants to provide insights into where money is being spent or lost, as well as to identify ways to maximize financial efficiencies.
- Internal Auditor: Internal auditors review the financial reports put together by company accountants in order to identify areas where the company could improve its financial standing.
- Payroll Manager: Payroll managers oversee employee payroll procedures and staff responsible for processing time sheets to accurately compensate employees.
- Forensic Accountant: Forensic accountants audit companies and individuals who are suspected of fraud. They either ensure that no fraud is taking place or identify the fraud within a company's books.
Education Pathways: Finance vs Accounting
Despite their differences, both accounting and finance have similar paths when it comes to education. Both finance and accounting programs tend to be found in the school of business at a university, and many positions in both career fields require a bachelor's degree.
Those interested in pursuing a career in finance might consider a Bachelor's Degree Specialization in Finance from DeVry University, while prospective accountants may find value in our Bachelor's Degree Specialization in Accounting. For those further along their education path, an MBA with a Specialization in Finance or an MBA with a Specialization in Accounting from DeVry’s Keller Graduate School of Management may be the right fit.
Interestingly, the two fields even share some certifications. Industry certifications such as the CMA (Certified Management Accountant) and the CIMA (Certified Investment Management Analyst) are useful for both accounting and financial professionals. There are also specialized certifications like the CPA (Certified Public Accountant) and the CFP (Certified Financial Planner).
Finance and Accounting Similarities
Finance and accounting are similar in several ways. They both involve the analysis of a company's revenue and expenses and both are focused on helping companies make smarter decisions with their money. Both also deal with financial statements, track liabilities and assets and use accounting principles to review and manage cost accumulation and allocation.
Finance and Accounting Differences
While the two fields are broadly similar, they differ greatly in terms of execution and function. Finance is more focused on the big picture while accounting is a detail-oriented profession. Accountants track expenses and revenues down to the cent to ensure that executives receive an accurate, holistic picture of their finances. Finance professionals are more concerned with high-level objectives. They assist in the planning and management of the assets and liabilities that accountants track, and use the information gathered by accountants to plan for growth and expansion.
Start Your Journey Toward a Career in Finance or Accounting
If a career in finance or accounting sounds like your calling, DeVry University can help you build the essential skills it takes to pursue these professions. We offer a Bachelor's Degree in Accounting and a Bachelor's Degree with a Finance Specialization. We also offer MBA in Accounting and MBA in Finance programs through our Keller Graduate School of Management.
Interested in enrolling in one of these programs? Request more info to see how DeVry can help you develop your capabilities on your way to a career in accounting or finance.