what is the difference between finance and accounting

Field operational differences

The professionals are working in the finance department of a company plan the distribution of assets and planning on how to actualize short-term and long-term company goals. Their activities include the coordination of capital investments and debt investments to maximize the returns and value of the business. Finance professionals strategize on how the investors will get the reward for their investments, whether in the form of dividends or pay-out. The finance department handles company budgets, determining the allocation of available resources to liabilities, remuneration, inventory, savings, and investments. Accounting professionals are generally concerned with tracking, recording, and reporting of the general transactions of a business. They manage the general ledger that records all transactions that are made whether to or from the company. Accountants are responsible for the internal cash-flow management according to the budget instructions of the finance department. They handle collection, recording and acknowledging/recognition of revenue. They analyze profitability by balancing the investment and returns amounts. One primary duty that accountants are tasked with is handling the payment of tax. They ensure tax compliance on all levels of the business.

Tools

Finance activities use and depend on tools like Risk Analysis to evaluate financial decision alternatives. They use Capital Budgeting techniques to generate formulas for allocation of funds, Ratio Analysis to determine the leverage, they use leverage to balance and maintain the company's share value at a good position and use working capital management to ensure the company does not run out of operational resources. Accountants depend on the income statement which is a summary of all the transactions where revenue has made its way into the company, Cash flow statements to tabulate all internal transactions and balance sheets to determine the difference between the cash flowing in and cash flowing out of the organization.

Career option differences

With finance major you are likely to find yourself in one of the following titles;

• Investment banker. An investment banker analyzes market trends in various industries and assists individuals and companies in making investment decisions.
• Fund manager. Fund managers project, buy and sell the future value of hedge and mutual funds.
• Risk analyst. They analyze and determine the risk of investment options and assist in decision making.
• Financial analyst. Financial analysts analyze the financial positions of individuals and companies and present clients with finance management strategies.
• Credit analyst. Credit analysts find out the risks involved in issuing loans to borrowers and determine whether or not creditors should issue the loan.

Accounting career options may lead you to become any of the following;

• Auditor. Auditors are hired to review the financial statements of companies to ensure that the financial records have been handled properly.
• Public accountant. Public accountants manage the financial documents of corporations and government agencies. They are also used in the preparation of taxes by the government.
• Forensic accountant. Forensic accountants assist the legal system in the analysis of financial statements to find illegal activities like embezzlement or fraud.
• Management accountant. These are private accountants that oversee financial statements for companies.
• Government accountant. These accountants conduct financial operations that have been sanctioned by the government or activities that are subject to government oversight.

Salaries

The salary compensation for finance specialists in 2018 was at an average of $78,620, while accounting professionals earned an average of $65,940 In summary, the significant difference between finance and accounting is that accounting is concerned about day-to-day financial activities and transactions while finance focuses on management and planning for future investments and operations. The two disciplines are equally, and preference will depend on the end user.

You can find more details on finance and accounting at finance answers.