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Finance vs. Accounting: Which Career Path Will Help You Succeed in 2023?
Are you in search of career advancement in the financial sector and struggling to decide between finance vs accounting? To make the right choice, it’s important to understand the differences between the two career paths as they are two distinct occupations. In this article, we will explore finance vs accounting, highlighting key points for comparison that will help you make a well-informed decision about your future career.
Finance vs. Accounting: Differences
Although finance and accounting are related disciplines, they have several differences.
Finance is a broad term that deals with the management of money and investments. It includes functions such as budgeting, forecasting, tracking performance, analyzing business decisions, and financial risk management. Finance teams use complex models and analytics to maximize investment returns while minimizing risk.
Accounting involves recording transactions accurately and reporting them promptly. Accountants must be organized, meticulous record-keepers who can analyze and interpret financial data for organizations. They also advise on tax compliance, accounts payable/receivable, payroll processing, and internal controls, among other things.
While finance professionals help companies make informed decisions about their finances long-term, accountants are responsible for keeping accurate records and ensuring compliance with laws and regulations.
The salary for finance and accounting professionals can also vary greatly. Finance positions typically pay more due to the complexity of the job and the skills required. Accountants, on the other hand, tend to have relatively lower salaries but may get benefits such as flexible working hours or bonuses, according to Payscale.
Also Read: 5 Functions of Financial Management: Discover How to Manage Your Finance Efficiently
Finance vs. Accounting: Skillsets Needed
Both finance and accounting professionals must have strong analytical, problem-solving, and communication skills. Apart from that:
- Finance pros should have expertise in finance theory, economics, financial models, investment strategies, and risk management.
- Accountants must be knowledgeable about Generally Accepted Accounting Principles (GAAP) and understand how to use finance software applications such as QuickBooks or Sage.
It’s important to note that finance and accounting overlap in certain areas, like budgeting, forecasting, and financial reporting. In addition to their unique skill sets, finance and accounting practitioners can collaborate on projects such as developing business plans, cost-benefit analyses, and cash flow projections.
Finance vs. Accounting: Education Qualifications required
- A finance professional can pursue a Bachelor of Science (BSc) or Masters of Science (MSc) in finance, mathematics, economics, or business administration. Many employers prefer candidates with an MBA from a prestigious business school.
- Accountants need at least a four-year degree in accounting or finance with an emphasis on accounting/finance fundamentals such as bookkeeping, financial statement analysis, and taxation. Some positions also require Certified Public Accountant (CPA) certification. To apply for CPA certification, individuals must complete college-level coursework in finance and accounting and take the Uniform CPA Exam.
Types of Jobs in Finance
Finance jobs are available across various industries, and include roles such as investment banker, financial analyst, finance director, hedge fund manager, and risk manager. Let’s take a look at the various areas finance professionals could focus on:
1. Corporate Finance
This area provides advice about budgeting and business investments
2. Investment Banking
These professionals help companies raise capital by issuing shares or bonds on the stock market
3. Wealth Management
Professionals in this field offer personalized financial advice on estate planning, retirement savings, and tax planning
4. Risk Management
This involves assessing investment risks, such as macroeconomic factors or industry dynamics
Types of Jobs in Accounting
Accounting jobs are available across various industries, from finance and accounting to auditing and tax preparation. Some popular roles include accountant, auditor, tax specialist, bookkeeper, and finance manager.
There are also different types of accounting roles, which include:
1. Public Accounting
These professionals specialize in providing services like audit, tax support, or financial advice to individuals or businesses
2. Management Accounting
It involves monitoring performance, preparing budgets, and advising on cost-control measures
3. Financial Reporting
Accountants in this area manage the financial statements for corporations and other organizations
4. Tax Accounting
Professionals who specialize in this field advise on tax compliance and tax planning for individuals and businesses
Also Read: Highest-Paying Jobs in Commerce That Ensure You Get What You Deserve
Advantages of Finance and Accounting Careers
Finance and accounting careers offer a variety of advantages that make them attractive options for individuals looking to further their professional development. Here are some of their key benefits:
Finance and accounting professionals typically get significantly above-average salaries, with potential bonuses and other incentives. This means they can enjoy greater financial security than many other professions.
Career Advancement Opportunities
Finance and accounting professionals have numerous opportunities to develop and progress in their careers, either through progression within an organization or by changing companies or specializations. With additional qualifications and experience, they can move into higher-level positions such as finance directors or controllers
These professionals get the respect and prestige of their peers, as finance and accounting skills are highly valued in the business
Finance and accounting roles offer variety in terms of subject matter and job scope, so these professionals can experience different aspects of their field
Finance vs Accounting: Ready to Determine Which Career Path Works for You?
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