How is Finance Different from Accounting?
When an individual excels in mathematics, the two options considered most often are a degree in finance or a degree in accounting. The difference between the two is more substantial than most people realize. To answer the question of how is finance different from accounting, we realize the skill set of each individual in addition to these differences is important.
The Duties of an Accountant
An accountant is responsible for preparing detailed financial statements. An accountant often works for a business, manages the incoming and outgoing cash flow, and creates plans and budgets. An accountant must know the exact amount of money available to the business, and if the cash flow is enough to cover all of the bills month after month. There is a lot of paperwork involved, with attention to detail critical for success. The cash flow for the company is managed by the accountant.
The Responsibilities of Financial Experts
The financial field is broader than accounting. A financial specialist evaluates the financial statements for the business as opposed to preparing them. We recommend this type of position for individuals capable of making important decisions concerning finances. Anyone choosing this career path must understand how the business invests and spends money.
Accounting or Finance Degree?
Both accounting and finance degrees require the ability to understand numbers, math, and meticulous details. The individuals we have seen achieve the greatest success are business savvy. A financial degree teaches how to plan and distribute assets, and manage investments and money for a business, government, corporation, or individual. Finances are essentially the management of capital to help ensure the business earns substantial returns.
Accountants report, summarize and record financial transactions. An accountant is responsible for the accuracy of financial transactions, account balances, and statements. When considering accounting or finance degree, we believe understanding the specific differences is important. The accountant prepares reports while ensuring accuracy. The financial expert makes projections and analyzes financial statements. Both careers are necessary for nonprofit organizations and governments.
What Are the Career Sectors After the Completion of Degrees in Finance?
When an individual earns a bachelor’s degree in finance, a large choice of careers becomes available. The most popular careers for a financial expert include the following.
A financial analyst must understand how money markets including mutual funds, bonds, and stocks perform. Their responsibilities include making investment recommendations and identifying current trends. Financial analysts work for businesses, individuals, or corporate finance for the creation of good business forecasts. Strategies are developed, and investment opportunities assessed to enable their clients to make better investments.
We recommend a financial background including understanding the use of financial insights and market trends to provide recommendations for the organization’s budget. A budget analyst ensures budget compliance and determines how the organization’s finances can be improved.
Operations and General Managers:
Money must be managed properly for any business to become successful. A career as an operation or general manager involves managing organizations, work teams, and daily operations, creating new policies, and hiring new employees.
The responsibilities of a loan officer include evaluating individual and business finances. This individual assigns loans for automobiles, business, college, and housing. A loan officer helps clients with the process of applying for a loan while offering recommendations to best serve the needs of their clients.
A financial manager is responsible for the financial goals of organizations and businesses. Financial data is analyzed, and financial reports prepared. Recommendations are provided for the best possible financial practices within the company. Market trends must be understood to ensure management makes better and educated decisions regarding finances.
Personal Financial Advisor:
This career involves working with families and individuals to help them reach their financial goals. A financial advisor analyzes the financial situations of their clients including the way the individual intends to spend their money. The advisor can then make recommendations regarding retirement, estate planning, and investments. The recommendations of a financial advisor must help clients meet their goals.
A financial background is required for a credit analyst. This career is responsible for ensuring the credit of an individual or business qualifies for a credit extension or a loan. Credit data and financial statements are obtained and examined to determine the risk of lending money to the organization.
When an individual earns an accounting degree, numerous careers become available. The most popular careers for accounts include the following.
Auditors and Accountants:
We recommend these positions for individuals able to work with a wide variety of clients including families, individuals, corporations, businesses, and governments. Financial records are prepared and financial statements reviewed to make certain all records are legally accurate. There are several types of auditors and accountants. The responsibilities include:
• Working with financial documents including balance sheets and tax forms
• Analyzing and recording financial information
• Preparing income tax returns with current tax advantages
• Organizing and balancing budgets to optimize financial costs
• Looking for any mismanagement of funds
• Ensuring financial accuracy
• Analyzing the cost of providing services or manufacturing products
• Investigating financial crimes
• Reviewing financial statements to verify accuracy and locate errors
An accounting background is required for credit analysts. The responsibilities include preparing and verifying financial statements and reports for credit data. A credit analyst usually offers recommendations for credit extensions and lending money by using reports to identify the risk level.
A background in accounting is required for budget analysts. The responsibilities include the preparation of budget reports for compliance. Errors are identified, and accuracy confirmed by reviewing budget proposals and analyzing spending. Individuals choosing this career confirm fund availability, determine budget status, and work with the other managers.
Revenue Agent and Tax Collectors and Examiners:
All of these positions are responsible for making certain businesses and individuals pay taxes due to the federal, state, and local governments on time. The additional responsibilities include conducting audits, reviewing tax documents, and collecting taxes.
A financial examiner ensures the responsibility of lenders and banks. Fair treatment is received by borrowers due to the use of the compliance laws. Financial institutions are monitored to make certain all transactions are performed both optimally and legally.
Accounting vs Finance Salary
Two of the most popular options we have seen regarding students interested in business are accounting and finance. One of the key concerns is the accounting vs finance salary. The students want to earn a better than average income once they have graduated and received their degrees. A college degree has become a necessity in the majority of industries due to the competition for numerous positions. We believe having a plan is just as important as earning a degree.
The cost of completing school combined with the cost of living increases throughout the United States means students must be aware of which positions offer the greatest earning potential. Both accounting and finance degrees are good options. When the average salary and job security are considered, finance majors have a slight edge over accounting majors.
The Average Salary of Finance Majors
According to a recent study, the starting salary of finance majors with a bachelor’s degree upon graduation is approximately $57,000. When all potential degrees are considered, this is the seventh-largest starting salary. We believe other considerations are just as important as the starting salary. Students need to be aware of how much their salary can potentially increase as experience is gained over time. The best starting salary in the world pales when there are no financial benefits for the experience.
Once the student has gained experience, their average salary is dependent on which specific career was chosen, whether the individual is working for a business, an individual or the government, and the part of the country the person is living. The projections of the BLS or the Bureau of Labor Statistics are an average annual salary of approximately $84,000 for analysts. In certain sectors, an analyst can earn more than $100,000 annually.
The Average Salary of Accounting Majors
Accounting majors also have a large selection of potential careers. The majority of graduates go to work as either a junior-level professional or an assistant. According to the most current data, an entry-level accountant earns an annual salary of approximately $51,000. The average salary after gaining experience or receiving advancements is approximately $69,000 annually. There is no way to accurately predict which careers will offer the largest salary.
The actual salary is based on a lot of contributing factors. Specifics for these factors is necessary to calculate the potential salary. A study was conducted regarding the difference between the salaries of finance and accounting majors. The results showed the majority of finance majors earn more than accounting majors.
The Final Word
Both finance and accounting majors are important positions of both influence and importance. We believe every student should conduct research prior to choosing a major. The student should consider their interests, skills, potential salaries, and what is required for both careers. We want every student to take the steps necessary for a financially stable and rewarding career.
Why study accounting & finance?
If you feel you are great with numbers and money management, you can consider studying finance or accounting. Both of these careers require knowledge of math and business, but more importantly, each one has great benefits. First, accounting is one of the oldest careers globally. The job of an accountant manages the account statements and handles the financial and accounting administration processes for making decisions on credits. In this career, there is an opportunity to work in a company or as a self-employed person, but you will always have to be autonomous in the organization on tasks and time management. For an accountant, it is positive the opportunities that national and international companies offer to graduates of the Accounting career. Now, finance is a branch of the economy that studies the exchange of capital between people, entities, and states. Nowadays, business is increasingly globalized. A Master in Finance will open the doors to opportunities in any company. These two professions are highly valued at the business level, as they help the continuous improvement of a company. Finally, it is important to note that salaries are very well paid and superior.
What skills and attributes does an accounting graduate need?
In these times, a graduate chartered accountant needs to perform different responsibilities in economic-administrative areas. The profile required in an accounting profession is a visionary person who has the ability to create strategies by anticipating possible crisis events within a company or organization, where decision making is vital to success. This person has to be able to synthesize information and communicate it in an effective and timely manner in financial management and accounting firms.
The skills you must have to consider being a certified public accountant are the following:
- Creative – To be able to adapt to changes in our environment, as well as to provide solutions for the professional and socio-economic development of the country.
- Visionary – To create solutions for the inescapable changes.
- Disciplined – To meet the established goals or objectives.
- Leadership – To have the capacity to direct and coordinate the work team.
- Synthesis capacity – To analyze the accountancy information in a timely manner.
- Logical Reasoning – To have a correct analysis of the strategies to follow.
- Numerical Ability – To develop useful strategies, when counting, measuring, or estimating.
- Teamwork – To generate a greater number of ideas.
- Critical thinking – To obtain expected results based on the accountancy information.
- Public Relationships – To establish alliances and assertive communication with individuals and finance professionals.
Is accounting and finance hard?
Not easy are the greatest things in life, but those things are worth every sacrifice. Consequently, It all depends, as in any other degree you have to be enthusiastic and sure of what you want. Many people are afraid of these two careers because they involve mathematics. It does require commitment and effort on the part of the student or the worker, but the difficulty really depends on your skills and your commitment. If you do not feel like it, the situations can become difficult. Although mathematics is indispensable, in the accounting careers they are not usually as advanced or difficult as in physics or pure mathematics. It takes a passionate person to become a professional accountant. In finance, there will always be unforeseen events that may affect many industries. However, this does not take away from the fact that there will always be the right decisions to make. Most people think that accounting and finance degrees are difficult careers, but we have to remember that these careers are in our day-to-day lives. The finance industry is in the macro and microeconomic environment, in companies, and even on a personal level. Certainly, It is always necessary to ask ourselves if we really like it, and if we are motivated to keep going and make everything an easy path.
What do accountancy and finance graduates do?
In the university world, accounting and finance degree prepares professionals with a high level of technical knowledge to be able to develop their careers in the financial and managerial accounting areas. The education in Finance and Accounting allows the graduates to assume responsibilities both in the global field of financial accounting organizations and in more specific areas. At a general level, graduates in Finance and Accounting specialization are qualified to perform, for example, inside the functions they can advise in any type of company and, in particular, in financial institutions (banking and insurance). They can also carry out accounting audits, act as intermediaries in the financial markets or with chartered financial analyst experts, asset management, manufacturing firms, investment valuation, and others. Moreover, graduates can go back to business school to offer finance programs and courses, also colleagues or students can join an accounting program to assist in accounting courses, accounting major, and further. On a more specific level, since these studies are related to advise for financial analysis investments, insurance, financial planning, management accounting, pension plans, etc. Therefore, its work is both in economic activity companies, financial institutions, and insurance companies.
What is the purpose of accounting and finance in business?
All the decisions in a company are made not before analyzing its financial statement. Accounting and finance are at the heart of every company. So, It is from accounting and finance that a company knows its economic, financial, and asset situation. The main purpose is to have control over resources and operations so that they are optimally managed. Hence, business owners, investors, or shareholders make decisions or carry out a major financial transaction, not without first observing a company’s financial state, all the available data, and determining how profitable or profitable the decision may be. This is to say, all the useful information to make decisions that involve the complete future of a business at an economical level. Besides, accounting and finance are not only responsible for the reliable and accurate collection a company information, but also the interpretation of this data through a financial statement, income statement, balance sheet, and also cash flow statement.