Finance vs Accounting
Compare and contrast
Compare and contrast
This guide will analyze the key similarities and differences between finance vs accounting careers. For university graduates, these are two of the most common options, and each offers a rewarding career path for unique reasons. Please explore the guide below to plan your career accordingly!
Finance is the management of money and investments for individuals, corporations, and governments. Finance professionals work in careers such as investment banking, wealth management, and financial planning and analysis (FP&A). Whether these professionals work on behalf of individuals or businesses, they are responsible for ensuring that there is adequate funding (capital) for the needs of the situation and that the funds are allocated as optimally as possible. Their job is to create value by managing capital in a way that earns higher than expected risk-adjusted returns.
Accounting is the recording, maintaining, and reporting of a company’s financial records. Accounting professionals work for individuals, in-house at corporations, or on behalf of other businesses at a public accounting firm (such as the Big Four). These professionals are responsible for ensuring that all financial transactions are correctly entered into the general ledger, that account balances are correct, and that financial statements are accurate.
Below is a summary of the main differences you should be aware of:
|Clients||Individuals, businesses, governments||Individuals, businesses, governments|
|Main Employers||Public accounting firms, corporations||Banks, corporations|
|Financial Statements||Responsible for preparing them||Responsible for analyzing them|
|View Point||Backward looking||Forward looking|
|Focus||Accuracy, reliability||Insights, analysis|
|Business Purpose||Communicating the financial position||Figuring out how to add value|
|Thought Process||Rules based||Analysis based|
|Attention to Detail||High||High|
Both accounting and finance professionals have clients that are individuals, corporations (businesses), governments, and non-profits. When it comes to their employers, however, there are significant differences. The most common types of employers for each group are listed below.
There are some major differences in the ways finance vs accounting professionals work with financial statements – accountants are primarily responsible for creating them, while finance professionals are primarily responsible for analyzing them.
If you enjoy collecting and organizing large amounts of data, such as all of a company’s invoices, receipts, and financial records, then being an accountant could be a good fit for you.
If you prefer analyzing and interpreting information to show how well a company is performing or coming up with ideas about how it could do better, then finance could be right for you.
Below is a detailed comparison of the various types of each profession.
Accountants, by nature, are backward-looking because they take historical financial information to prepare their reports. By the time their reports come out, the figures could be several months old.
Finance professionals, by contrast, are forward-looking because they have the nearly impossible task of trying to predict the future.
If you like studying the past, that could be a good sign you’d enjoy accounting work, while if you enjoy trying to think about the future will hold, you may prefer finance work.
One of the biggest differences in accounting vs finance careers is the types of personalities that are drawn to each of them.
Below are the primary corporate job functions and responsibilities for each of the respective professions.
The finance vs accounting decision can be a tough one, especially if you haven’t worked in either industry before. At the end of the day, you should carefully consider all of the information provided above – including all the similarities and differences – and decide which option best fits your personality, your interests, and your goals.
In order to help you with the decision, this additional reading will be helpful:
Advance your career in investment banking, private equity, FP&A, treasury, corporate development and other areas of corporate finance.
Get certified as a financial analyst with CFI’s FMVA™ Program.