Finance vs Accounting: Choosing Right Degrees & Career Paths

As a common misconception, it is understandable to assume that the functions of finance and accounting are similar. Although you might not be wrong, the concepts of finance and accounting aren’t worlds apart, but we can spectate a few crucial differences between finance vs accounting. 

If you have a way with numbers and wish to pursue a degree in either finance or accounting. Although finance holds a forward-looking aspect in terms of revenue and strategy, accounting holds a backward-looking aspect, looking at historical and present numbers. Let’s explore the difference between finance and accounting. 

What is Finance?

Finance is defined as the management of money and contains activities such as investing, borrowing, lending, budgeting, saving, and forecasting. In other words, when we talk about finance, we mean the study of money management and creation, along with investments and opportunities. In the battle between a finance degree vs accounting, finance helps us curate reports and insights into credit, debt, and securities, determining the current and future flow of money. 

For Instance: A financial advisor suggests goods and methods to help a client reach their financial objectives. Setting up client budgets, selecting assets, and endorsing tax-advantaged accounts for retirement or school are just a few examples of the advice given. 

Universities Popular for Finance Courses

Finance is a lucrative field, it can yield a great deal of career opportunities and success. Below are a few notable universities that are popular around the world for their finance courses. 

1. London Business School, UK

2. Harvard University 

3. London Business School 

4. The Massachusetts Institute of Technology

5. Columbia University

What is Accounting?

Accounting is the practice of keeping track of a company's financial transactions. Tracking down profit and loss statements/ income and expenses of a particular company. Summarising, evaluating, and reporting these transactions to regulatory bodies, tax collection organisations, and oversight agencies are all part of the accounting process. Although between finance vs accounting, accounting captures the company's financial status at a specific point in the past, present, and future as well. 

For Instance: An accountant or auditor reviews financial statements, calculates taxes, keeps track of financial transactions, and makes recommendations for how to cut expenses, increase income, and boost profits. 

Universities Popular for Accounting Courses

The UK and the USA are some of the world's top destinations to study accounting. The universities there offer a ton of practical knowledge and industry exposure for a promising career success. Check out the below universities best known for accounting.

1. University of Pennsylvania

2. The University of Oxford

3. London School of Economics and Political Science

4. University of California, Berkeley 

5. The University of Chicago

Finance Vs Accounting: Difference 

As the above data shows, accounting is much narrower than finance. While finance deals with analysing data and growth possibilities, accounting is more about calculating numbers and accounts. Despite having similar talents, a finance degree vs accounting degree may reflect different opportunities. 

The distinction between finance vs accounting is based on how you wish to work with a company's financial records. A student pursuing an accounting degree will control numbers instead of influencing them. A student pursuing a degree in finance, on the other hand, is likely to be more interested in financial strategy, control, and how to make smart investments based on market trends.

Below is a table expressing finance vs accounting:

Finance Vs Accounting: Courses

A bachelor's or master's degree in finance equips you with the knowledge and skills necessary to allocate and manage an organisation's assets. The abilities you'll need to secure money, allocate funds, and examine spending across several organisational areas are developed with a degree in finance. If you are a student keen to know the fundamentals of finance deeply, explore our article on masters of finance in the UK.

Referring to an accounting vs finance degree, a bachelor's or master's degree in accounting will provide you with the skills necessary to track and analyse an organisation's assets. Accounting majors, in distinction to finance majors, gain expertise in cash flow management, financial trend analysis, asset reporting, and tax management. 

Below is a table expressing the difference between finance and accounting courses:

Finance vs Accounting: Job Opportunities

A finance degree is typically pursued by those who want to work in financial management, analysis, or advice. Whereas, a degree in accounting typically leads to employment as an auditor or accountant. Accountants can decide to help people or businesses prepare and file their taxes by working with them. If Chartered Accountancy is what you dream of doing, then hop on to learn how to become a Chartered Accountant in the UK.

Explore the table below to get enlightened on the job opportunities in finance vs accounting.

Finance vs. Accounting: Salaries

Degrees in accounting or finance are included in the general category of business major degrees. Finance degree vs accounting degree will report different salary structures. The business industry's average salary projection for 2021 was $63,000. Fast-forward to 2024, and we find that people with bachelor's degrees in finance often start off with slightly higher median wages than people with degrees in accounting.

The average starting salary in the US and UK for finance majors is $62,935 to $545,119 (£29,160 to £68,100). The average postgraduate starting salary can start from $1,15,800 (£53,734)per year. 63rd in PayScale’s ranking of Majors by Salary Potential.

The average starting salary in the US and UK for accounting undergraduates is $74,240 to $95,240 (£40,000-£134,000). The average postgraduate starting salary can start from $74,605 (£134,000)per year. 129th in PayScale’s ranking of Majors by Salary Potential.

Finance vs. Accounting: The Better Option

It is evident from comparing accounting vs finance that both have bright futures. The Bureau of Labour Statistics (BLS) estimates that by 2026, there will be a 10% rise in accounting positions. Moreover, the BLS estimates an 11% rise in financial analyst jobs during that time. 

1. The Scope and Focus:

When evaluating performance from a financial perspective, money is everything. While accounting relies on transactional data, finance employs a number of metrics to examine how well a company raises and manages capital.

In finance vs accounting, accounting is a basic way to determine whether time-related transactions are appropriately reflected in an organisation's financial records. For example, assets = Liabilities + Owners' Equity.

2. Measuring Financial Performance

Between finance vs accounting, finance poses the best approach to spectating a company's economic returns is to determine how much cash it can generate and leverage. 

The majority of businesses use the accrual method of accounting, which is responsible for documenting transactions. It functions on revenues and costs that must level over time.

3. Assessing Value

In finance, this is handled very differently. To ascertain the value of a project, asset, or organisation, an analytical procedure known as valuation is used. 

The conservative principle, which recommends that businesses record greater estimates of their liabilities and lower anticipated values of their assets, is frequently used in accounting. 

Comprehending accounting and finance is crucial for evaluating a company's performance and position. Both fields revolve around numbers, and there is a huge scope of opportunities on both sides. One must make informed decisions and pursue their career path with a great deal of diligence and interest. Understanding finance vs. accounting fundamental ideas will help you become a more knowledgeable financial decision-maker.

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