Accounting vs Finance

Recording the past vs predicting the future

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Comparing Accounting vs Finance

Accounting is focused on recording and reporting how a business performed in the past, while finance is focused on analyzing and forecasting how a company is expected to perform in the future. This guide will compare accounting vs finance across various aspects.

Accounting vs Finance diagram

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Accounting is concerned with collecting all financial data for an entity, entering it into a ledger, and generating reports the summarize what happened in the past.

#1 Collecting Data

Accountants are responsible for collecting all financial data and may do so by obtaining receipts, invoices, and reports that pertain to all a business’ revenues and expenses. For example, all customer orders, prices paid for each product, inventory records, payroll reports, and capital purchases.

#2 Managing the General Ledger

The central system accountants use to manage the data they collect is called the general ledger. The ledger keeps a record of all transactions that take place, no matter how big or small. To learn more, see our guide to debits and credits. The general ledger is then used to generate financial statements.

#3 Generating Reports

The main form of the report that accountants prepare is the set of consolidated financial statements, which includes the income statement, balance sheet, and statement of cash flows. In addition, there are lots of ad-hoc analysis and management reports that are generated.

Below is an example of an accounting report: the income statement.

Accounting vs Finance Report

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Finance is concerned with analyzing an entity’s financial position, evaluating its past performance, and predicting how it will perform in the future.

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#1 Analyzing Financial Position

Analysts spend a great deal of time analyzing a company’s financial position, which includes its capital structure, cost of capital, working capital, liquidity, and funding requirements.

#2 Evaluating Past Performance

While accountants are the ones who prepare financial statements, financial analysts are the ones who spend a great deal of time analyzing them and looking for insights into how the company is performing. This includes the evaluation of profitability, rates of return, margins, growth, and many other types of financial statement analysis.

#3 Forecasting Future Performance

This is the biggest differentiator of accounting vs finance. Financial Analysts spend a great deal of time predicting how a company will perform in the future by building financial models in Excel. The types of financial models include a standard 3-statement model, discounted cash flow (DCF model) valuation, scenario analysis, and transactions such as mergers and acquisitions.

Below is an example of a financial model prepared by an analyst.

Financial Model

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Accounting vs Finance Objectives

The objectives of professionals working in accounting and finance have some overlap and some major differences. Below is a list of what each profession is primarily concerned with.


  • Accuracy and reliability
  • A record of history
  • Following accounting rules and principles
  • Presentation of results
  • A picture of a company’s financial situation
  • Accruals and smoothed-out financial information


  • Accuracy and reliability
  • A prediction of the future
  • Undoing accounting rules (not in all cases)
  • Presentation of results
  • Analysis and interpretation of a company’s financial position
  • A focus on cash flow and economic value

Accounting vs Finance Careers

Both accounting and finance offer rewarding and exciting careers. Which one is a better fit largely comes down to your personal objectives and personality type. Below are some of the most common jobs and careers for each profession.

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As you can see, there is some overlap between accounting vs finance jobs, as many of these positions are suitable for people from either background. Check out CFI’s Interactive Career Map to learn more!

Additional Resources

Thank you for reading this CFI guide to accounting vs finance. In order to help you in your career progression, these complementary resources will be helpful:

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