Finance vs. Accounting – Is There a Difference?

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.

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

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:

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. 

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:

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

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.

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.

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. 

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.

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. 

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.

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.