Accounting vs. Finance: Which one’s right for you?

Right after class 12th, everyone is confused with what subject to choose as their career plan. Both accounting and finance are legacy career past many years and will continue to do so. So let’s explain the basic difference between accounting and finance and decode on what will be better for you. Keep this article as a reference point and share with your friends if they have similar doubts.

On the other hand, finance is the study of money, money systems, and capital assets. It is associated with economics, which studies the production, distribution, and consumption of money, assets, goods, and services. All aspects of the financial discipline, often known as the management of money, including budgeting, saving, investing, borrowing, and lending, are covered.

The process of recording a business’s financial activity is called accounting. These transactions are collated, investigated, and reported to oversight teams, regulatory bodies, and tax collection organizations as part of the accounting process.

Both professions offer a variety of job opportunities, which has a great deal of potential to help someone launch a successful career. Continue reading to learn more about potential careers, work prospects, and the distinctions between Accounting and Finance.

To know more, you can also check out A guide on how to get a job in the finance sector.

What are the differences between Accounting and Finance

Differences between Finance and Accounting are:

• Finance is the study of managing a company’s cash flow, whereas accounting is the skill of keeping track of and reporting on a company’s financial activities.
• Accounting is primarily concerned with the daily flow of money into and out of a firm or institution. In contrast, finance is a more broad term for the management of assets and obligations and the planning of future growth.
• While accounting is more concerned with accurately recording what has already occurred and adhering to rules and regulations, finance is more focused on developing plans for the future, increasing wealth, or minimizing losses.
• Statements of cash flows and balance sheets are examples of accounting tools. Financial tools include analysis of risks, capital spending, ratio analysis, leverage, and working capital management. 

Top Careers in Finance in 2023

Finance professionals are in high demand, and the industry is predicted to expand more. The financial industry is enormous and offers a wide variety of jobs. The following is a list of some of the well-known and highest-paying jobs in this sector: 

Financial Analyst: For the department of a company that is in charge of financial planning and analysis, the position of financial analyst is crucial. Future revenue and spending projections, budget creation, and capital structure modeling may all be critical. Financial analysts frequently keep an eye on a company’s financial plan. Financial analysts in India make an average of ₹8 lakhs per year. A financial analyst’s tasks include the following.

• Make recommendations based on your study, interpretation, and comparison of the suggested modifications in methods and materials.
• Performing financial forecasting, reporting, and operational parameter tracking. Analyze financial data and create economic models to aid in decision-making.
• Prepare for ongoing leadership reviews by summarizing the financial performance. Analyze variation, look for trends, analyze past results, and suggest improvements.

Financial Manager: All of a company’s vital financial operations must be managed by a financial manager. Finance managers spend more time strategizing and planning, analyzing data, and advising senior managers and executives. Due to technological developments that have significantly reduced the time needed to generate financial reports, there is an increasing need for financial managers. With wages ranging from three and a half lakhs to thirty lakhs, the average annual pay for a finance manager in India is ₹13 lakhs. A financial manager’s tasks include the following.

• They maintain the right balance between equity and debt.
• They research market trends to identify chances for business expansion or company acquisition.
• They manage company credit and are required to perform certain responsibilities that are unique to their organization or industry.

Investment Banker: Financial experts with knowledge in the financial services sector, analytical prowess, and convincing communication skills assist institutional clients with tasks including mergers and acquisitions and capital raising. The typical annual salary for an investment banker in India is close to fourteen lakhs. These are some of an investment banker’s responsibilities. 

• Investment bankers are financial professionals who help institutions in the creation of numerous economic models to evaluate debt and equity for a merger, acquisition, and capital-raising activities.
• Perform a variety of valuation techniques, including DCF, antecedents, and comparable companies.
• Create suggestions for product launches, deals involving private equity, mergers & acquisitions, and valuations.

Credit Analyst: The responsibility of a credit analyst is to assess a person’s or company’s creditworthiness in order to determine their likelihood of meeting their financial obligations. Credit analysts are hired to work in the credit risk analysis division, where they are expected to assess the risk level of future and present clients by looking at their financial condition and making recommendations to the company. In India, a Credit Analyst makes an average of ₹5.3 lakhs per year. These are some of the duties a credit analyst performs.

• They must examine a customer’s purchase history, debt repayment history, profits from their business or employment, and savings information to determine the credit risk associated with that consumer. The analysts give the company advice on whether or not to extend credit terms to a customer after analyzing the data.
• They must examine a potential client’s financial information. To decide whether a client is qualified for credit terms, the analyst will assess their credit payment history, assets, obligations, and earnings history.
• To assess if an existing customer is eligible for a credit limit increase, they must examine the credit limits of current clients. The analyst will evaluate the borrower’s credit history, earnings data, and any prior credit defaults.

Chief financial officer (CFO): The CFO is in charge of overseeing the business’s financial operations. They are responsible for monitoring cash flow, identifying strengths and weaknesses so they may recommend corrective action plans as necessary, and creating precise predictions so management can decide whether to make further investments or reduce spending. A CFO’s average annual salary is ₹40 lakhs. The duties of a CFO are listed below: 

• Oversee the creation of all financial statements, including tax returns, income statements, balance sheets, shareholder reports, and reports for governmental organizations.
• Compare budgeted expenses to actual expenses, compare projected sales and profit to essential data, and make or supervise any necessary revisions to future predictions and budgets.
• Analyze long-term economic patterns and predict how they will affect future sales and market share growth.
• Manage money investments and collaborates with investment bankers to secure the additional funding needed for expansion.

Financial risk manager: Financial risk managers are responsible for controlling the risks related to trading, investing, and other economic activities. They aim to increase profits while protecting their business or organization from potential losses. In India, the salary range for a financial risk manager with less than two years of experience is ₹3-4 lakhs, with an average yearly salary of ₹9 lakhs. Their duties are: 

• To determine whether new products or services will be profitable, they study the risks involved.
• Create and implement policies and procedures for managing financial risks, perform audits to ensure that the company’s economic systems and processes are successful, and evaluate the risk management techniques used by the company to ensure that they comply with the law.
• Keep an eye on economic trends that might influence the company’s financial status and offer advice on how to resolve problems with risk management.

You can also check out Important concepts to learn during an MBA in Finance.

Top Careers in Accounting in 2023

Accounting is the foundation of every firm. All businesses require accountants. The demand for accountants is rising as a result of the unique needs of different enterprises. For qualified people, positions are open in the governmental, private, and non-profit sectors. Below is an explanation of a few accounting-related occupations.

Certified public accountant (CPA): Public accountants might focus on topics like taxation, consulting, or auditing and work for individuals, companies, or the government. Public accountants can apply for certification to become certified public accountants (CPAs) if they meet specific requirements. The average salary of a CPA can go as high as ₹14 lakhs per annum. The duties of a CPA are mentioned below.

• Sort through all of your financial documents, including electronic and hardcopy.
• Examine each business deal in detail, and then produce thorough reports based on your findings.
• Discuss the tax planning and research with the staff.
• Conduct routine audits to ensure the integrity of financial records, expenditures, and savings.

General accountant: All financial matters inside a business are handled by an accountant, including maintaining and analyzing financial records. To keep their business in good financial status, they might be responsible for tasks like payroll calculation and bank statement reconciliation. ₹5 lakhs is the average salary in India for a general accountant. Their job responsibilities include:

• Oversee all accounting processes, including the accounts payable and payable reconciliation
• Release financial reports as planned. Construct financial projections
• Take care of the closings for the month, quarter, and year.
• Calculate taxes and prepare tax returns. Examine the financial transactions and records.
• Control the profit and loss accounts and balance sheets.
• Report on the liquidity and financial health of the company
• Maintain the confidentiality of financial information and, if required, create database backups.

Accounting officer: The organization’s accounting officer is in charge of overseeing all financial and administrative tasks. In India, an accounting officer makes a salary of ₹4 lakhs on average. The following is a list of their duties: 

• Keeping track of and analyzing financial records.
• Ensuring adherence to tax and accounting regulations.
• Regularly preparing budgets.
• Tracking revenue and generating reports.
• Assessing internal management practices, policies, and threats in order to make recommendations.
• Creating financial statements and managing business accounts.

Accounting manager: The accounting manager will organize and direct the department’s accounting operations. They are in charge of managing the accounting department, which handles payroll, billing, collections, and budget creation. An accounts manager’s salary in India can range from three lakhs to fifteen lakhs, with an average annual income of six lakhs. The following is a list of their duties:

• Establishes guidelines and internal checks and balances for managing accounting transactions and developing budgets.
• Oversees the preparation of yearly budgets, financial projections, and operational reports.
• Supervising the creation of periodic financial reports ensures that the reported results adhere to generally accepted accounting principles or financial reporting requirements.
• Responsible for submitting the annual business tax return and fiscal year-round tax planning.

Cost accountant: Making sure that the money an organization spends is wisely planned and worthwhile is the responsibility of a cost accountant. They keep track of expense reports; examine information on expenditures or costs for goods and services acquired from suppliers, and make recommendations for cost-effectiveness. The annual salary for a cost accountant in India is ₹5 lakhs. Their duties at work include:

• Establish and keep up the cost accounting system, records, and paperwork for the company.
• Develop and complete internal cost audits.
• Analyze the data obtained and make a complete journal of the results.
• Analyze production costs and compile recurring reports that compare actual costs to anticipated ones.
• Provide management with reports that outline and assess factors that affect the costs and profitability of a product or service.
• Help with general ledger and audit creation.

Bookkeeper: A bookkeeper is in charge of documenting and keeping track of a business’s daily financial activities. They also create trial balances to help the accountants and reports for the managers. A bookkeeper can assist you with payroll administration, debt collection, invoice creation, and payment processing. In India, a bookkeeper makes an average pay of twenty thousand per month. The following is a list of the most typical duties of a bookkeeper:

• Keeping track of financial transactions by publishing and verifying
• Keeping track of subsidiary accounts by posting, validating, and allocating transactions
• Compiling, evaluating, and summarizing accounting data in order to prepare financial reports
• Keeping an eye out for deviations from the expected budget
• Assisting with financial tasks like processing payroll and creating invoices.

Skills to thrive in Finance or Accounting sectors

Analytical skills: Professionals in finance should be able to reason critically and decide under pressure. Risk analysis, risk management, financial planning, and data analysis are a few examples of domains where analytical thinking is crucial.

Business intelligence: Finance experts play a significant role in critical business decisions. Finance managers and executives must know various business-related areas to make better decisions. 

Financial modeling: Finance experts should know the fundamentals of financial management to help the company maximize its revenue.

Accounting skills: Finance experts should have a fundamental understanding of accounting, including how to create and manage cash flow statements, prepare balance sheets, and do other accounting-related tasks.

Financial reporting: Finance professionals should have a solid understanding of Reporting Software that enables stakeholders to make final decisions and export reports in the most popular formats (PDF, Excel, CSV, Word, PowerPoint, XML, and HTML). They should be familiar with reporting from an MIS (Information Management System).

Budgeting skills: Budget management skills are the information and abilities you use to plan and manage expenditures at a company, from monitoring a company’s overall financial health to coordinating the spending of a minor, short-term venture.

Risk analysis: Risk analysts should be adept communicators who can identify threats to a project or company.

Cash flow management: Monitoring and regulating the costs an organization incurs is the process of cash flow management. Concurrently examine the company’s revenue generation. Making wise business decisions, expanding into new markets, developing new goods, and other activities are made feasible by effective cash flow management. 

Why are Finance and Accounting popular work domains?

Finance and accounting are the two most significant industries in the world. Fortunately, this booming sector also offers many benefits to help you grow in your career.

Benefits of pursuing a career in finance and accounting

Significant earning potential: Depending on the job route you choose, graduates with degrees in accounting and finance have the potential to earn high wages.

Flexible career path: Candidates can follow a different line of work and apply the knowledge they have learned to become a business development manager, data analyst, or mortgage advisor. There are additional career prospects as chartered accountants, stockbrokers, and forensic accountants.

Job security: Companies across all industries require Accounting and Finance professionals to handle their finances. Job security will be pretty good because there is a great need for graduates in Accounting and Finance.

Which degrees or certifications are best suited for a career in Finance or Accounting?

The most popular finance courses include B.Com, M.Com, Chartered Accountants (CA), and MBA in BFSI, MBA in Finance, Finance Analyst, Investment Banking, and Cost & Management Accounting.

The few certificates most appropriate for a profession in finance or accounting are the Financial Risk Manager (FRM), Certified Public Accountant (CPA), Financial Modeling & Valuation Analyst (FMVA), and Financial Risk Manager (FRM) certifications. 

Get ready for a career in finance or accounting with an online degree from Manipal University Jaipur

You can obtain your M.com and B.com degrees online from the highly valued Manipal University Jaipur and gain the knowledge and abilities required for a career in Accounting and Finance. Online education allows you to study and take classes from the comfort of your own home. Besides finance expertise, you will also gain managerial skills through the online Bachelor of Commerce program, which will help you succeed in the commercial world. Throughout the three-year curriculum, you will learn about accounting principles, export and import regulations, economic policies, and other elements that impact trade and commerce. Additionally, you’ll learn how to assess and examine data. The online Master of Commerce degree is a thorough curriculum that will equip you with the range of abilities needed to run a firm in the modern, global economy successfully. Additionally, the Manipal University of Jaipur provides an MBA in finance, ideally suited for Accounting or Finance jobs, as well as an MBA in BFSI. It aids in your job advancement to a managerial position.

Related articles you can read

Top 10 highest paid jobs in India for commerce graduates
Guide to MBA in finance course
A guide on how to get a job in the finance sector
An easy guide on how to become a financial analyst

Conclusion

Accounting and Finance have great scope today and they provide a wide variety of options and a varied career path. If you possess the required skills, you can apply them in a way that suits your tastes, character traits, and personality. Businesses of all sizes appreciate the role of an accountant, and graduates of Accounting and Finance programs will discover just how valuable it is in terms of pay.