In the world of finance, accounting is an important topic on which there are many articles. In this article, we will try to explain the difference between finance and accounting, keeping in mind that both terms are interrelated. To understand the core idea of this article, let’s take a look at what defines these concepts.
Finance: Finance is a field of study that involves the management of money and assets. It also covers financial planning (the process of creating a workable set of goals for future financial success) and capital investment.
Accounting: On the other hand, accounting is a branch of business concerned with recording, interpreting, analyzing, and communicating financial data concerning various aspects such as profit and loss (P&L) in an easy-to-understand format for decision making. Accounting is a field that deals with the measurement, reporting, and analysis of financial information (cash flow) over certain periods of time.
The Pros of a Finance Career
A career in finance can be extremely lucrative and rewarding if done right. Finance is a very broad term; this means that you have the opportunity to work in many different areas such as investment banking, insurance, real estate, accounting, and auditing, just to name a few.
The Cons of a Finance Career
The cons of a finance career are that you have to start at the bottom and work your way up. In the finance field, there are no shortcuts as success is earned, not given.
The Pros of an Accounting Career
If you have the mindset to be smart with your money, this can be a rewarding career. Accounting is based on math and statistical skills needed in real-life situations such as forecasting revenues, etc.
The Cons of an Accounting Career:
In most cases, accounting careers require analytical thinking, which means that you need to understand math and statistics. Sometimes it is not easy to master these skills as the financial sector has a high demand in those areas.
Some people might be interested in accounting and finance, while others may feel that they are not cut out for this type of career. In either case, it’s important to understand the key differences between these careers before choosing a path.