If you enjoy working with financial figures, choosing a career in accounting or finance could be a great decision for you. Individuals seeking a challenging and rewarding profession will find that a career in financial management can be lucrative and exciting. If you’re considering a career in financial management, you may be unsure as to whether you should earn your degree in accounting or finance.
While there are many similarities between the two fields, they are two distinct disciplines. The main difference between them is that those who work in finance typically focus on planning and directing the financial transactions for an organization, while those who work in accounting focus on recording and reporting on those transactions. Put another way, accounting is the organization and management of financial information whereas finance is the management of money.
Finance is a broad field involving the management of money that can encompass anything from corporate finance to personal financial planning. Careers in finance may include jobs such as investment banker, financial broker, financial manager or planner, financial advisor or financial analyst. Those who work in finance often deal with others outside the organization, such as government agencies, banks, investment firms and services, stockholders and suppliers.
Those with careers in finance often evaluate, manipulate or govern the monetary resources, investments and assets of an organization with a focus on profitability. They may also be involved in early stages of expansions and acquisitions and often play a key role in helping an organization respond to trends in the marketplace to either capitalize on upturns or help the organization withstand downturns.
Many people consider accounting to be a subset of finance while others refer to it as the “language of business”. In the business world, those who work in accounting use a standard set of rules and principles, known as the Generally Accepted Accounting Principles (GAAP) to track and report on the financial transactions of a business and often manage the general ledger, cash flow and tax obligations. They typically work with journal entries, bank reconciliations, invoicing and similar processes that relate to the daily operation of a business. They may also create quarterly and annual financial reports, analyze profitability, manage debt, audit internal transactions and report earnings.
Careers in accounting include jobs such as financial reporting accountants, auditors, bookkeepers, accounts receivable clerks, accounts payable clerks, controllers, treasurers and tax accountants. Advanced degrees and certifications, such as the Certified Public Accountant credential, may be required for higher level positions.
Although there is some overlap in coursework for accounting and finance degrees, the curriculum for a finance degree tends to be more mathematics-intensive and focused on financial markets, portfolio and investment management theory, financial management, investments and security analysis and valuation. Courses for finance degrees are often more evaluative and analytical than accounting courses.
Accounting degrees include more coursework on quantitative analysis, internal auditing, income taxation and accounting practices and methods. Accounting tends to be more process-oriented and many degree programs offer fewer electives than finance degrees since there are more required classes for accounting majors.
A degree in accounting and a degree in finance prepare students for different career opportunities, and prospective students should explore both fields carefully before deciding upon either course of study. A good thing to keep in mind is that accounting and finance are complementary fields and many students choose to major in one and minor in the other or opt for a double major. By fully understanding the differences and similarities between accounting and finance, you’ll be better able to select the educational path that best matches your skills, interests and career goals.