Finance vs Accounting

Finance Vs. Accounting Career Guide

Finance and accounting are two different sides of a coin. They are both very similar yet very different. Accounting focuses more on the flow of money in and out of the company or institution. In contrast, finance discusses how people or companies should manage their assets and liabilities.

People often mix up these two different concepts.

Finance is for people who like to take a deeper look into the high-level strategy of a company, and accounting is for those who want to look more into the company's book. 

Accounting looks back to a company's past financial transactions, whereas finance looks forward to planning the future acquisition of assets. 

Accounting is more about what happened in the past and has to be accurately reported in compliance with the laws and standards. 

Finance focuses on what will happen in the future, which means it will help you understand whether you will grow your money or face a loss in the future. If someone is looking for something in a longer time horizon, then finance is a better option as a career than accounting. 

Some people find finance a bit complicated and accounting comparatively harder. Therefore, its acceptance varies from person to person. 

Both focus on calculations and mathematics. If you are good with numbers, you can consider both options. 

Finance vs. Accounting: Career Options

The difference between finance and accounting might be a basic curiosity for us, but if someone is thinking about choosing a career, they need to think seriously about this matter.

If you choose accounting as a career, you would be working for one of these positions:

• Tax Manager
• Controller
• Valuation Analyst
• Fund Accountant
• Financial Reporting Accountant, etc.

Choose accounting as a career if you like to work, as stated in the titles above. 

Accounting professionals track and ensure the flow of money in the company. The one who works in accounting relies heavily on Generally Accepted Accounting Principles (GAAP) for maintaining the accounts and needs to be familiar with the tax code.

Internal Revenue Code of Section 446 is very important to know as it is the tax code section that covers "General rules for methods of accounting."

If someone chooses finance, then there are a variety of options for a career. For example, you would have the option of working as:

• A financial examiner,
• Investment banker,
• Financial investor,
• Personal advisor, etc. 

There is an option of working in consulting or corporate finance as well. In addition, those who major in banking and insurance underwriting can also seek finance jobs. Last but not least, entrepreneurship is another open route.

Finance Vs. Accounting: Salaries

Both finance and accounting graduates can get a job with a high salary. The salary range varies in many ways in these sectors. Both of the fields have high growth aspects. 

According to the BLS, a Financial Analyst got, on average, $78,620 per year or $37.80 per hour back in 2014. 

Financial Analyst jobs are projected to grow by 12% between 2014-2024, which is very high compared to the average growth rate. So, Financial Analysts' jobs are in very high demand in the job market.

Accountants' and Auditors' average pay is $65,940 per year, which means $31.70 per hour.

In addition, the growth rate estimated in this career is 11% between 2014-2024, which is also very high in the job market. So, choosing these job titles as a career is also a very good decision.

Let's look at an example on the lower end of the scale:

As BLS has estimated, the average pay for Accounting, Bookkeeping, and Auditing in 2014 was about $36,430 per year, which means $17.51 per hour. The number of jobs is predicted to drop by 8% between 2014 and 2024.

So, we can say that the accounting field has high-growth, high-salary, negative-growth, and lower-salary jobs.

Finance Vs. Accounting: Detailed Analysis of Job Options

Though accounting major graduates tend to prefer high-paying jobs, there are exceptions, such as fundraisers. The average pay for fundraisers is $52,430 annually, which is $25.21 per hour. 

The projection says there is a growth of 9% between 2014 and 2024, which is above the average growth rate. The BLS considers the fundraisers and puts them in the "Business and Financial" category, though not all fundraisers have a finance or accounting degree.

Both fields, Accounting and Finance, require:

• A high level of skill
• Academic knowledge
• Education
• Comfort with quantitative analysis

Both have the potential growth opportunities to provide challenging work that is well-compensated and recognized.

• Choosing the right career is quite hard sometimes. If you are good at accounting and finance and can't choose the right career, you can seek help from professionals such as university advisors, professors or career mentors, etc. 
• You can also seek help from friends and family. You can ask your family members and friends who have careers in any field to help you choose the right path. 
• Another option would be to search online and learn about the job descriptions and skills required for these fields. If those requirements match you, it will be easier for you to choose the correct option.

Finance Vs. Accounting: Employers and Clients

Both finance and accounting fields have clients that are individuals, governments, organizations, non-profit organizations, etc. Though their clients are similar, the employers are significantly different. 

The lists of the employers in both fields have been given below:

Finance:

• Banks (retails, commercials, and investments)
• Operating companies (regular businesses)
• Insurance companies
• Research companies.

Accounting:

• Personal tax filing firms
• Operating companies (regular businesses)
• Public accounting firms (that audit large companies).

As we can see, people who have backgrounds in finance are hired by employers from companies such as Chase, Comerica, Bank of America, Fifth Third Bank, etc... Insurance companies like Liberty Mutual, Allstate, State Farm, Farmers, etc... Operating companies, and research companies

So, if you have a finance degree and are looking for a job, you can try applying to one of the organizations listed above. It is a good idea to make a list before starting to apply for the positions and keep tracking the updates.

Employers from tax filing firms like TurboTax, H&R Block, etc.; accounting auditing firms such as Deloitte, PWC, Ernst & Young, etc.; and operating businesses look for appropriate candidates with accounting backgrounds. 

So, if you think you are a good fit, you can apply to one of these places. Though finding the right job at the right place is challenging, we must never lose hope and keep looking for the right position. 

Before applying for the positions, one needs to read the job description and requirements very carefully and should only approach those positions that match their profile rather than applying to every opening. 

We can even email back to the recruiting manager to get the update. It is necessary to keep the email very professional and precise. 

Conclusion

Both finance and accounting are very good choices as a career. Choosing the best career depends on several factors, including the interest, expertise, knowledge, experience, etc., of the candidate. Regardless of everything, both of these options are really good choices for a career.

Though finance and accounting have some similarities, these two have differences, which have been discussed previously. Some prefer finance, and some prefer accounting. However, both offer decent salaries to the employees in these positions.

Being backward-looking by nature, accountants construct their reports using past financial data. Some months may pass before their reports are released with the numbers.

Instead, because they have the most difficult task of attempting to anticipate the future, finance professionals are forward-looking.

Making the choice between finance and accounting might be difficult, particularly if you have never worked in either field previously.

In the end, you should carefully weigh all of the information above, taking into account both the advantages and disadvantages, and select the choice that most closely matches your objectives, interests, and personality.

Researched and Authored by Mehnaz Tarannum | LinkedIn

Reviewed and Edited by Sakshi Uradi | LinkedIn

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