Finance vs Accounting

A career in finance can be exciting and rewarding. But many people who want to study finance in college often wonder if they should pursue a finance degree or an accounting degree. Both deal with numbers and analyzing large volumes of data, and both can provide an opportunity to work for different financial institutions, such as banks, brokerage firms, or insurance companies, as well as the chance to be self-employed. Finance, however, is a broader and more comprehensive field of study, whereas accounting is a subset of finance.

To better understand the differences between the two career choices, here is an outline of what finance professionals and accountants do, along with an overview of several common career choices, median salaries, and some of the main similarities and differences between finance and accounting careers.

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Finance Professionals

What do finance professionals do?

Finance professionals analyze financial data and provide advice to businesses or people on investments and how to best spend and allocate their resources.

Types of careers: Financial planner, financial analyst, investment banker. You can find more information on different finance careers here.

Median salary: $51,850 to $121,750 (bls.gov).

Accountants

What do accountants do?

Accountants collect and review financial records on a daily basis. They estimate the costs of operation and ensure that taxes are paid, processes are optimized, and that an organization understands the impact of its financial transactions.

Types of careers: Accountant or auditor

Median salary: $68,150 (bls.gov).

Finance vs Accounting: Similarities

  • Both degrees can provide a path to a finance career. Although a finance degree is broader, many companies employ finance professionals who are accounting majors.
  • Both careers deal with numbers and data as the primary sources of information to make their statements and reach their conclusions.
  • Both careers allow professionals to work with a wide range of clients and organizations in finance, business, and other industries.
  • Both careers can allow professionals to advise senior management on financial transactions and decisions.
  • Both degrees can allow holders to pursue additional certifications and degrees.

*These similarities are meant to be a guide and are not always applicable to and uniform among all jobs and regions.

Finance vs Accounting: Differences

  • Finance professionals usually analyze financial data to plan the best way to source and allocate funds. Accountants also collect and report past and present financial data on a daily basis to ensure that expenditures are in line with a company’s performance.
  • Finance professionals are interested in future investments and study financial records and the market to best inform broader financial strategies. Accountants focus on operations, transactions, and processes to make sure books are balanced and a company is maximizing its resources.
  • Accountants play an important role in ensuring taxes are paid and regulatory requirements are met. Additionally, some finance professionals, such as financial managers, can have more power in the decision-making process and can use information provided by accountants to make decisions.
  • Accountants can become CPAs, or certified public accountants — professionals who can represent clients before the Internal Revenue Service and file the audited financial reports that are required for every company with the Securities and Exchanges Commission. Finance degree holders can also take the tests to become a CPA; however, most states require heavy coursework in accounting to qualify, which many finance degree holders lack.
  • Finance professionals deal with aspects such as return on investment and risk management, and accountants focus on items such as balance sheets and income statements.
  • The field of finance offers more career choices but also less predictability. In some cases, careers in finance might offer higher pay. Careers in accounting can offer more predictable, stable work but less pay in many cases.
  • Careers in finance can be demanding with longer hours, while careers in accounting can require fewer hours, except during certain time periods, such as tax season.

The differences between finance professionals and accountants are summarized below.

Finance Professionals

  1. A finance professional typically plans the best way to source and allocate funds.
  2. They focus on the analysis of market trends to inform strategies.
  3. They have a good deal of decision-making power.
  4. Their income ranges from $51,850 to $121,750.
  5. A finance professional can pursue a career as a financial analyst, financial adviser, investment banker, or even a stockbroker. In short, finance professionals boast a variety of career options.
  6. Less stability and predictability, but higher pay prospects in many cases.
  7. More demanding schedule, more hours.

Accountants

  1. Accountants usually collect and report financial data on a daily basis.
  2. They focus on operations, financial transactions, and overall financial processes.
  3. They do not have as much decision-making power as finance professionals.
  4. Their median income is around $68,150.
  5. Career options are limited in scope and more focused on accounting, auditing, taxation. An accountant can also pursue work as an actuary, auditor, or tax consultant.
  6. More stability and predictability but lower pay prospects in many cases.
  7. Less demanding schedule and fewer hours most of the year.

*These differences are meant to be a guide and are not always applicable to and uniform among all jobs and regions.

Careers in both finance and accounting have several things in common, such as a strong focus on crunching numbers and analyzing data; however, there also notable differences between them, as demonstrated above.

When choosing a degree, students and professionals should keep the listed information above in mind and think about what is important to them. For instance, due to the more structured nature of accounting, working as an accountant is a more stable pursuit than finance. If they want to have the flexibility of changing careers down the line, a degree in finance can provide them with the opportunity to do so. If they are looking for greater decision-making power and more influence on a company’s overall financial strategy, a degree in finance would probably be a better choice, but if they would rather just focus on current financial operations without having to worry about where a company’s money will go, accounting could be a better fit.

It all depends on a person’s preferences and priorities, but both a finance degree and an accounting degree can provide a solid basis to grow in the dynamic financial industry.

For those who are interested in pursuing a career in financial services, consider exploring Maryville’s online bachelor’s degree in financial services. By earning a degree in finance, students can learn the skills they need to succeed as finance professionals.

Now that you better understand the intricacies of a finance degree versus an accounting degree, discover potential financial services careers.

Sources:

https://online.maryville.edu/online-bachelors-degrees/finance/

https://www.bls.gov/ooh/business-and-financial/home.htm

https://www.bls.gov/ooh/management/financial-managers.htm

https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm

http://smallbusiness.chron.com/differences-between-financial-accounting-management-accounting-3985.html