If you enjoy working with financial figures, choosing a career in accounting or finance could be a great decision for you. Yet, you may be unsure about which degree to earn, as the fields overlap. Therefore, it’s essential to pause your hunt, ask yourself some crucial questions and do your research.
Plus, fascinating, advanced degree programs exist that combine the two disciplines, such as the online Master of Business Administration (MBA) in Finance and Accounting program from Florida Institute of Technology. Factoring in the career versatility an education like this could offer is also an important consideration in your quest for the ideal degree program and career.
Finance vs. Accounting: The Basics
While there are many similarities between accounting and finance, they are two distinct disciplines. The main difference between them is that those who work in finance typically focus on planning and directing the financial transactions for an organization, while those who work in accounting focus on recording and reporting on those transactions. Put another way, accounting is the organization and management of financial information, whereas finance is the management of money.
What is Finance?
Finance is a broad term associated with managing money and acquiring needed funds, including budgeting, forecasting, lending, saving, investing and borrowing. Financial concepts and principles, such as the time value of money and intrinsic value, are based on microeconomic and macroeconomic theory. According to Investopedia, the finance industry consists of three sub-categories:
- Personal finance involves financial planning for individuals. This can include long-term financial management plans, such as retirement, purchasing of financial products, mortgages, banking and various other forms of investments.
- Corporate finance involves the financial activities for running an organization, which can include investment strategy and budgeting.
- Public (government) finance includes the tax, spending, budgeting and other policies that relate to how the government allocates resources.
Careers in Finance
Finance is a broad field involving the management of money that can encompass anything from corporate finance to personal financial planning. Careers in finance may include jobs such as:
- Investment banker
- Financial broker
- Financial manager or planner
- Financial advisor
- Financial analyst
- Finance operations director
Those who work in finance often deal with others outside the organization, such as government agencies, banks, investment firms and services, stockholders and suppliers. Finance professionals evaluate, control, or govern the monetary resources, investments and assets of an organization with a focus on profitability. They may also work on the early stages of expansions and acquisitions and play a key role in helping an organization respond to trends in the marketplace to either capitalize on upturns or help the organization withstand downturns.
Finance Required Skills
Working in finance requires a range of skills, many of which you can learn in a finance-oriented MBA program. Yet soft skills are just as critical for finance professionals as technical knowledge. Interpersonal skills, communication ability, teamwork, critical thinking and problem-solving skills are all essential skills for a career in finance, along with financial reporting, analytical expertise and business acumen.
What is Accounting?
Accounting is the identifying, recording and communicating of an organization’s economic results. A vital function for any business, accounting measures business activities, processes information into reports and communicates the results to decision-makers.
There are different areas of specialties in accounting, according to Investopedia, including:
- Financial accounting includes the generation of financial statements that typically involve a balance sheet, income statement and cash flow statement. This information is used by external decision-makers, such as investors, creditors and taxing authorities.
- Managerial accounting often involves the same data as financial accounting, but it is used by internal stakeholders to make decisions on business operations. This can also include forecasting, budgeting and other financial analysis tools.
- Cost accounting involves determining the cost associated with producing a product and helps businesses decide if they should produce the product and what the product should cost.
Careers in Accounting
Many people consider accounting to be a subset of finance, while others refer to it as the “language of business.” In the business world, those who work in accounting use a standard set of rules and principles, known as the Generally Accepted Accounting Principles (GAAP), to track and report on the financial transactions of a business and often manage the general ledger, cash flow and tax obligations.
They typically work with journal entries, bank reconciliations, invoicing and similar processes that relate to the daily operation of a business. They may also create quarterly and annual financial reports, analyze profitability, manage debt, audit internal transactions and report earnings.
Careers in accounting include:
- Financial reporting accountant
- Auditor
- Bookkeeper
- Cost accounting manager
- Accounts receivable clerk
- Accounts payable clerk
- Controller
- Treasurer
- Technical accounting manager
- Tax accountant
Required Skills for Accounting
Similar to pursuing a career in finance, aspiring accounting professionals need to have a combination of accounting expertise, general business knowledge and soft skills to be successful. Soft skills include communication, leadership and customer service.
In-demand hard skills for accountants include expertise in technology and software systems, including Excel, ERP experience, SQL, Microsoft Visual Basic, business intelligence software and the many evolving applications of AI-driven technologies in process automation and analytics. This emphasis on modernized technology competence in accounting is reflected in the new technology-forward emphasis of the CPA exam.
Accounting vs. Finance Coursework
Although there is some overlap in coursework for accounting and finance degrees, the curriculum for a finance degree tends to be more mathematics- or analytics-driven. Coursework may focus on financial markets, portfolio and investment management theory, financial management, investments, and security analysis and valuation. Courses for finance degrees are often more evaluative and analytical than accounting courses.
Accounting degrees include more coursework on quantitative analysis, internal auditing, income taxation, and accounting practices and methods. Accounting tends to be more process-oriented and many degree programs offer fewer electives than finance degrees since there are more required classes for accounting majors. A degree in accounting and a degree in finance prepare students for different career opportunities, and prospective students should explore both fields carefully before deciding upon either course of study.
Finance vs. Accounting: Salary Expectations and Job Outlook
Both finance and accounting fall under the U.S. Bureau of Labor Statistics (BLS) business and financial occupations category. BLS projects faster-than-average growth for this group of occupations between 2023 and 2033. The median salary in this category was $79,050 as of May 2023.
BLS reports that accountants and auditors will be in high demand from 2023 to 2033 and had a median annual salary of $79,880 in 2023. In comparison, financial analysts commanded a median annual salary of $99,890 that year. Further, financial managers made a median 2023 annual salary of $156,100, yet it is important to note that higher-management or leadership-level finance professionals often come from both accounting and finance backgrounds
Combine Your Accounting and Finance Career Aspirations
A good thing to keep in mind is that despite their differences, accounting and finance are complementary fields and many students choose to specialize in one area while taking electives in the other. Plus, with dual-specialization options like the MBA in Accounting and Finance from Florida Institute of Technology, you can integrate the overlapping areas of study and enjoy a good deal of career versatility after completing your degree. Either way, by fully understanding the differences and similarities between accounting and finance, you’ll be better able to select the educational path that best matches your skills, interests and career goals.
Learn more about Florida Tech’s online MBA in Accounting and Finance program.
