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Finance vs. Accounting – Is There a Difference?

By DeVry University

October 1, 2021
6 min read

To those who have never studied finance or accounting, the two terms can seem similar. There are ways in which these related fields work very closely together, but after breaking down finance vs accounting, it’s apparent that the fields are actually quite distinct. They are different worlds where accounting documents the details of financial transactions while finance focuses on a broader 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 explore the following:

What is Finance?

Finance is a broad term that describes the management of an individual or organization’s assets and liabilities, acquisition planning and mapping for their future financial growth.

Finance can often be broken up into 3 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 where economics is mostly concerned with the study of money, finance analyzes the way money is utilized to draw conclusions and make plans about how to put it to use.

Skills Needed for Finance

A medley of analytical, technical and workplace skills is essential in finance. Including:

  • Accounting skills: To analyze financial statements and offer financial advice, finance professionals need accounting skills like budgeting, cash flow management, accounting principles, financial management and cost analysis.

  • Analytical skills: Problem solving and analytical skills like logic, planning, financial analysis, forecasting and strategic planning help finance professionals understand a variety of situations and act upon them thoughtfully and intelligently.

  • Tech skills: In finance or accounting, technology makes it easier to process the huge amounts of information that are sometimes needed to do the job. This is where tech skills that go far beyond spreadsheet proficiency, like financial modeling, financial engineering, IT software and SAP are essential.

  • Communication: Written and verbal communication are the core of soft skills you will see mentioned across job descriptions, and for good reason. In finance, the ability to inspire trust, give financial advice clearly and persuasively, and communicate in all forums is crucial. Skills like financial advising, leadership, nonverbal communication and relationship management are all valuable communication skills.

Potential Careers in Finance

Finance is a vast field that can encompass a variety of different professional roles. Employment opportunities can span a range of industries, as major companies need financial experts to help them maximize profits for shareholders and the company. Some common finance careers 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, as loan officers do.
    • Insurance: Finance plays a critical role in insurance. Working in insurance companies, these professionals are trained to balance risk against potential reward to effectively manage the company’s bottom line.
    • Brokerage: Brokers research the markets 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: Professionals in financial planning 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 college education.
    • 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.

What is Accounting?

Accounting is an area of business administration that involves the measurement and reporting of an  organizations or individuals money. It’s an important function in areas like strategic planning, fundraising, external compliance and operations management.

Regardless of the size of the business, accountants are responsible for financial reporting that includes compiling reports, measuring assets and liabilities, and navigating the complexities of the tax code while adhering to the double-entry system and Generally Accepted Accounting Principles (GAAP). There are several different types of accounting, each with its own unique focus and standards, including financial accounting, managerial accounting, tax accounting and cost accounting. 

Skills Needed for Accounting

A career in accounting can be a good choice for people who are detail-oriented and numbers-focused. Here are 7 technical and workplace skills needed for accounting:

  • Organization: Strong organization skills help accountants meet deadlines, follow reporting guidelines and keep track of the financial records of multiple clients or departments.

  • Analytical skills: An analytical mind helps accountants read and interpret financial results. This skill goes hand-in-hand with attention to detail, which helps accountants carefully review information to identify inconsistencies and create accurate, dependable reports.

  • Critical thinking: Strong critical thinking skills contribute to accountants’ abilities to analyze a financial situation and propose solutions in an objective, well-informed manner.

  • Accounting principles: Accountants must know how to apply the set of standards known as GAAP in recording financial information and creating reports consistently.

  • Software proficiency: Proficiency with various software tools, like spreadsheet programs and specialized accounting programs, is a useful skill that helps accountants and their staff generate financial reports.

  • Service orientation: You may not think of accounting as a service business, but accountants must have strong customer service skills and the desire to act in their clients’ best interests.

  • Problem solving: The ability to recognize and solve problems that may arise from errors in accounting or record keeping is another useful skill. When a problem is recognized, a skillful accountant should know how to identify potential solutions, asses the options and then select and implement the best solution.

Potential Careers in Accounting

Accounting contains several different disciplines that can be applied to a wide variety of professions. A short list accounting careers includes:

    • Public Accountant: In public accounting, CPAs, or accountants that hold the Certified Public Accountant license, help individuals and businesses file tax returns, audit financial records, and 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: In forensic accounting, 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.

Finance vs. 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 vs. Accounting: Differences

The difference between finance and accounting can be summed up pretty simply: Accounting looks back, while finance looks forward.

In accounting, the focus is on the day-to-day accurate reporting and analysis of business transactions in compliance with laws and regulations. Finance is a forward-looking discipline that involves planning, risk analysis and mitigation, and the future acquisition of assets. In finance, the focus is on management of money and other assets to help individuals, businesses and organizations reach their financial goals.

Another way to illustrate the difference between the two is by looking at the potential careers in each field. As we’ve previously described, if you’re interested in a career in accounting, you might be able to explore opportunities in public accounting, forensics, financial accounting, auditing and payroll management. If you set your sights on a finance career, you may want to consider roles in financial analysis, investment banking, personal financial advising or financial management. Because of these differences, the education and coursework required to prepare to pursue a career in each area also differ.

Education

If you’re planning to pursue a career in either accounting or finance, it’s important for you to familiarize yourself with the education requirements for each field. Accountants and auditors and financial analysts alike need a bachelor’s degree in accounting or business to pursue entry-level employment, according to the Bureau of Labor Statistics (BLS). The BLS also notes that some employers prefer to hire job candidates with a master’s degree, and that accounting students may gain practical on-the-job experience through internships with accounting or business firms. 

Coursework

A side-by-side comparison of the coursework found in an accounting degree program and a finance degree program will clarify how the two academic pathways differ. At DeVry, students enrolled in our Bachelor’s Degree in Accounting program will complete coursework specific to accounting and auditing, such as Accounting Research, Auditing, and Professional Ethics for Accountants. Students enrolled in our Bachelor’s Degree Specialization in Finance will complete finance-specific coursework, such as Investment Fundamentals and Security Analysis, Money and Banking, and Fixed Income Securities Analysis.

Both our Bachelor’s Degree in Accounting and Bachelor’s Degree Specialization in Finance programs share core coursework in basic accounting, such as Intermediate Accounting I, Federal Tax Accounting I and II, and Advanced Cost Management, but then diverge along the lines of each specialty.

Scope

Another area where we can compare accounting and finance is their scope. Based on the similarities and differences we’ve identified here, the finance discipline, with its alignment with financial planning and long-term strategic financial mapping, has a broader scope. Its methods can be applied to a broader variety of scenarios and entities. 

The nature of accounting, with its emphasis on the gathering, reporting and analysis of financial data based on past transactions and cashflows, is somewhat narrower in scope. 

Finance vs. Accounting Job Outlook

The employment outlook in finance and accounting over the next decade is favorable, based on job outlook data from the BLS.

The BLS projects employment of financial analysts to grow 8% from 2022 to 2032, with about 27,400 job openings projected each year, on average, over the decade.1 This projected increase in demand is attributed to an increase in overall economic activity as new businesses are established, existing businesses expand and emerging markets throughout the world provide new investment opportunities.   

The BLS projects employment growth for accountants and auditors to hold steady at 4% during the same period. This is about as fast as the average for all occupations, but with a significantly larger projection of job openings – about 126,500 each year, on average, over the decade.2 The BLS attributes this growth to a growing economy, a complex tax and regulatory environment and the continued globalization of business.

It's important to keep in mind that the job growth for both occupations are projected on a national level, and that local growth will vary by location. It’s also important to note that these projections are not specific to DeVry University graduates and may include earners at all stages of their careers.

Finance vs. Accounting: Which Path Should You Choose?

Now that you have a better understanding of the differences between accounting and finance, consider which career path suits you personally, and which is the best fit with your goals. 

    • You might consider accounting if: You excel in a highly structured environment, with regular deadlines for reports and filings. The information you work with is obtained directly from the business records, or books, of organizations and individuals, requiring little, if any, research. You might also consider this career if you enjoy collaborating with others in the financial community, such as financial analysts.
    • You might consider finance if: You enjoy doing research, monitoring financial markets and participating in a more speculative environment that may require quick responses to market fluctuations or thorough investigation of various investment opportunities. Your work could involve helping individuals make better investment decisions, helping new or existing businesses grow through sound financial planning, mergers or acquisitions, or analyzing the characteristics of different properties to help investors decide which to buy.

Start Your Journey Toward a Career in Finance or Accounting with DeVry

If a career in finance or accounting sounds like your interest, DeVry can help you build the essential skills 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.

Study on your terms at DeVry. Our 6 academic sessions per year allow you to start when you’re ready and learn at your own pace, finishing on a regular or accelerated schedule that meets your personal and professional goals.

1 https://www.bls.gov/ooh/business-and-financial/financial-analysts.htm
2 https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm

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