Often, these two concepts get used interchangeably. However, doing this is a mistake that you can avoid. The reason is that while these concepts or fields are pretty similar to an extent, they are very different from each other. Therefore, if you consider studying any in school or as a career, you need to understand each entail. A proper understanding will ensure that you choose the best for you.
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You may consider looking these up on luminablog.com, a credible online review platform that will provide to you reviews written by others about a particular subject, service, or brand. Before you do just that, it would be best to continue reading this article as it aims to provide a sense of clarity on the actual differences between accounting and Finance. It is also imperative that you understand that these differences exist in the basics, career paths, specialists’ roles, amongst other crucial factors.
ACCOUNTING vs. FINANCE: The Crucial Differences
One of the crucial differences that exist between these two fields is in the area of their essential purposes. For instance, one of the purposes of considering a career in accounting may likely be your interest in keeping books. On the other hand, an interest in Finance as a field of study may stem from the need to understand more about what it takes to set up financial goals that will help manage your assets and liabilities.
In essence, you can look at these two fields through the lens of the past and the future. This means that while accounting deals with keeping books to ensure transparency and accountability of past transactions, Finance, on the other hand, entails managing assets and liabilities to ensure the smooth flow of future growth and development for the company or institution.
Another significant difference between accounting and Finance is in the factor of their career paths or options. There are numerous career options for both fields; however, these options set apart each area’s everyday purposes and roles. For instance, the accounting profession has career options that may equip you as a Tax Manager, Valuation Analyst, Fund Accountant, Bookkeeper, Treasurer, Auditor, Forensic Accountant, Certified Public Accountant, or Controller. On the flip side, Finance provides you with options to become a Financial Analyst, Risk Analyst, Portfolio Manager, Investment Banker, Money Manager, or Financial Examiner. Hence, these career paths may help you decide which fields you want to study or learn more about. It would help if you also understood that the Salaries (which are usually lucrative) in these fields differ according to the growth prospects for each field and career options.
Certifications, Skills, or Educational Requirements are also significant factors that show some level of difference between these two fields. While accounting majors take some finance classes and finance majors take some accounting classes, some certifications and educational requirements distinguish their practice in the professional world. For instance, accountants are usually required to pass the CPA (Certified Public Accountant) exams. At the same time, Finance managers or planners, on the other hand, need the certification- CFP (Certified Financial Planner exam).
Now that you have become well equipped with the information about the actual differences between accounting and Finance, you can easily decide the one you have more interest in studying or understanding better. You may also consider asking specialists in these fields questions to understand their roles and functions better.