If you’re thinking about a career in finance or accounting, knowing the distinction between the two fields is essential for success. As an industry expert, Controller’s Group, Inc. explains the difference between financing and accounting.
The Difference Between Financing and Accounting
A lot of responsibilities and tasks in the finance and accounting industries overlap, but there are some distinct differences between the two careers. The difference between financing and accounting is that finance experts focus on planning and directing financial transactions for a business while accountants specialize in recording and reporting transactions after they’re made.
Defining Jobs in Finance
A finance professional typically manages cash flow, acquires the necessary business funds to operate a company, and completes an array of other tasks such as budgeting, forecasting, lending, saving, investing, and borrowing.
There are three specific types of jobs in finance:
- Personal finance: This career in finance involves planning and budgeting finances for individuals, including long-term financial planning for retirement and purchasing financial products, such as stocks and mortgages.
- Corporate finance: A corporate finance expert runs business financial activities, such as investment strategy and budgeting.
- Government finance: Government finance professionals specialize in regulations on taxes, budgets, and other policies that relate to how a government-funded business operates.
Careers and Jobs in Finance
From corporate finance to personal financial planning, specific career paths in the finance industry include:
- Investment banker
- Financial broker
- Financial planner
- Finance manager
- Financial advisor
- Finance analyst
Finance professionals work with external resources outside of the business, such as government agencies, banks, investment firms, stockholders, and suppliers.
One significant responsibility in a finance role is to evaluate and control a business’s monetary resources, investments, and assets, focusing on profitability. A financial expert may also find themselves involved in the early stages of business development and expansion, playing a key role in assisting the business with marketplace trends and developing financial strategies for capitalization.
Required Skills for a Job in Finance
Soft skills in the finance industry are just as crucial for career success as industry knowledge. A well-rounded set of interpersonal and communication skills help finance professionals work with external organizations. Communicating well with others complements a finance expert’s industry knowledge, such as developing and maintaining financial records and financial statements.
Defining Jobs in Accounting
Accounting is defined as identifying, recording, and communicating a business’s economic results. An essential role in every business, staff accountants measure operational activities and process the information into financial reports, relaying the results to key decision-makers in the business, such as the owner, CEO, or president.
There are three specialty areas in the accounting industry:
- Financial accounting: An accountant’s responsibility in this role includes generating financial statements that include a balance sheet, income statement, and cash flow statement.
- Managerial accounting: Managerial accounting experts collect data, such as financial reports, for internal stakeholders to make decisions on business operations.
- Cost accounting: A cost accountant determines the transaction costs associated with developing a product and assists the business in deciding product price.
A Standard Set of Rules for Jobs in Accounting
Accountants work using a standard set of accounting principles known as the Generally Accepted Accounting Principles (GAAP) to track and report financial transactions of a business and manage the general ledger, cash flow, and tax accounting.
The GAAP standard includes principles on:
Careers and Jobs in Accounting
Specific career paths in the accounting industry include:
- Financial reporting accountant
- Cost accounting manager
- Accounting clerk for receivables
- Accounting clerk for payables
- Technical accounting manager
- Tax accountant
Accountants also work with journal entries, bank reconciliations, invoicing, and similar processes that relate to daily business operations. Creating quarterly and annual financial reports, analyzing profit and loss, managing debt, and auditing internal transactions and report earnings are also common responsibilities for accounting experts.
Required Skills for Jobs in Accounting
Similar to the finance industry, accountants should have a well-rounded set of soft and hard skills to represent themselves as potential candidates for an accounting position. Hard skills that businesses look for in accounting professionals include expertise in technology and software systems, such as Excel, ERP, SQL, Microsoft Visual Basic, and business intelligence software. Soft skills such as communication, leadership, and customer service, are also highly sought after.
Salary for Finance Jobs vs Accounting Jobs
Finance and accounting are in the category of business and financial occupations under the Bureau of Labor Statistics (BLS). This category of occupations projects an average salary of $68,350 as of 2018.
The BLS projects that accountants and auditors have been in high demand since 2018 and are expected to continue to be highly sought after through 2028. The average salary for accountants and audit professionals is $70,500.
Let Controller’s Group Explain the Difference Between Financing and Accounting
Controller’s Group, Inc. can help you understand the specific differences between finance jobs vs accounting jobs. If you’re unsure of the career path you want to follow, our team of professionals can help you decide which industry best aligns with your hard and soft skills. We help candidates find temporary and permanent employment solutions, assist with interview preparation, and resume writing. Our team knows best practices for finding accounting and finance opportunities, and we work with some of the best firms in the area to position you as a qualified candidate. No matter what job search obstacles you may be facing, Controller’s Group will lead you to your next opportunity in the accounting or finance field.