What's the Difference Between Finance and Accounting?

If you know you're interested in a career that involves money and numbers, then going into accounting or finance may be the right path for you. Although there are some similarities between accounting and finance, these are two very distinct fields. With this in mind, how can you determine which field is best suited to your own interests, strengths and professional goals?

By understanding the differences between accounting and finance, as well as the career paths available with an accounting vs. finance degree, you can better decide which path to pursue.

Accounting vs. Finance: Core Differences

While both accounting and finance are critical to the management and success of any business, they differ greatly in terms of their overall focus, tools and technology used, responsibilities and regulatory involvement.

Focus and Objectives

When it comes to scope and overall focus, accounting tends to be more concerned with the "here and now," whereas finance is more centered on what could happen in the future. For example, accountants may maintain records and generate reports to help business owners better understand their day-to-day finances. Finance professionals, on the other hand, will use those reports and other financial information to provide advice to business owners on strategies to optimize future success.

Roles and Responsibilities

Accountants and finance professionals also take on different roles and responsibilities. For example, accountants are often responsible for tasks like bookkeeping, budgeting, risk management and financial reporting. Meanwhile, finance professionals may be responsible for duties such as investment management, policy development and regulatory compliance.

Skill Sets

Working in accounting also requires a different set of skills than working in finance. For instance, while both accountants and finance experts need to have a solid understanding of math and numbers, accountants need to be more versed in generating financial reports and financial statements. Finance professionals may need to have a more strategic mindset that involves creative problem-solving and analytical thinking.

Tools and Technology

Accountants use a wide range of tools and technology to make their jobs easier. For example, an accountant may rely on accounting software (such as QuickBooks) to generate a financial statement. Accountants may also rely on payroll software, inventory management software and even payment systems as part of their everyday work.

Financial professionals, however, use different kinds of software and tools to handle such tasks as financial modeling and forecasting. They may also rely on data visualization tools to help clients visualize and understand projections in an accessible way.

Client Interaction

Accountants and finance experts can also differ in the amount of client interaction they have in their everyday work. Accountants typically have less direct interaction with their clients, often working behind the scenes to handle tasks like payroll and reporting. Finance professionals usually have more direct interaction with clients because they are more involved in making strategic recommendations to key decision-makers.

Regulatory Involvement

Both accountants and finance professionals need to remain in compliance with key regulatory laws. Accountants must follow the rules set forth by the Securities and Exchange Commission (SEC) and the best practices of the American Institute of Certified Public Accountants (AICPA). Meanwhile, those in the finance field are bound by regulations from the Financial Industry Regulatory Authority (FINRA).

Career Opportunities

So, what can you do with an accounting degree or a finance degree? These fields open the door to a wide range of career opportunities, from managing corporate budgets to advising individuals on their financial goals.

Types of Accounting Careers

Many accounting degree graduates pursue their CPA licenses, which allows them to work in public accounting. However, there are also plenty of non-CPA roles worth exploring, such as:

• Accounts payable specialist
• Accounts receivable specialist
• Internal auditor
• Staff accountant
• Director of accounting
• Freelance accountant

 

Types of Careers in Finance

Those with degrees in finance can explore a wide range of potential job opportunities, including such roles as:

• Financial analyst
• Financial planner
• Finance manager
• Treasurer
• Director of finance
• Chief financial officer (CFO)

 

How Finance and Accounting Overlap

Despite their differences, accounting and finance do see some overlap, as both fields involve the recording and assessment of financial transactions. Working in these fields also requires extensive business knowledge, communication skills and a formal education.

Accounting vs. Finance Degree: Which Is Right For You?

When deciding between a career in accounting and a career in finance, there are a few considerations to keep in mind. First, are you more interested in the detail-oriented work of reviewing financial statements, or do you prefer to think more analytically about the future? If you're more about the "big picture," finance may be better suited.

Also consider your current strengths and long-term career goals. If you have strong analytical skills and a higher propensity for risk, then you may be suited for a role in finance. Conversely, if you prefer a more stable role that allows you to put your quantitative skills to use, then accounting may be your best choice.

Ready to Pursue Your Degree?

Despite a few similarities, both accounting and finance are two distinct fields with their own unique objectives, responsibilities, roles and required skill sets. Ultimately, choosing between accounting and finance will depend on your own interests and career goals.

Regardless of the path you end up pursuing, The University of Memphis Global has degree programs to suit your needs. This includes our Bachelor of Business Administration in Finance with a concentration in Business Finance, a program that consists of 120 credit hours and can be completed entirely online. Likewise, our Bachelor of Business Administration in Accounting has the same credit hour requirements and can be completed online for your convenience.

Learn more about either of these programs by getting in touch with our knowledgeable team. Ready to get started? You can start your online application for admission today!