The Accounting vs Finance decision can be a difficult one especially as no one studying each of the courses would want to diminish his/her course of study by telling you the truth.
However, both courses are very important in this century of groundbreaking entrepreneurs where businesses are sprouting daily and corporations are in constant need of accountants to keep their financial records and financial analysts to advise them in their finances and help them make smart investment decisions.
Furthermore, we will strive in this article to tell you everything about accounting and finance, including their similarities and differences that in the end, you would be able to weigh them and decide which alternative fits your personality, intellectual curiosity, and goal.
Questions To Consider Before Pursuing Accounting Or Finance.
Consider the following questions before you choose to major in Accounting or Finance.
1. Which job role do I admire the most?
2. In which category does it fall? (finance or accounting or in both)
3. What skills do I already have for such a role and what is there to learn or what skills do these roles need?
4. What is the present/future demand and supply for the role(s)?
5. Which major is more lucrative, and what are my salary expectations?
Accounting is the technique of recording, summarizing, analyzing, and reporting the financial records of businesses.
These records belong to private and public corporations, individuals, state agencies, etc.
Accountants handle lots of paperwork and details to manage the cash flow of a business.
They often ensure that a business’s financial transactions are correctly recorded in the general ledger, the account balances are exact and the financial statements are accurate.
They are also accountable for the tracking of expenses and revenues, internal reporting, financial risk management, and financial reporting.
Segment of Accounting
Accounting is divided into several segments of subject areas including tax accounting, auditing accounting, financial accounting, management accounting, and accounting information.
1. Financial Accounting
This segment of accounting centers on reporting an organization’s financial information to investors, potential investors, and creditors.
It monitors, calculates, and records business transactions thereby preparing accurate financial statements using the generally accepted accounting principles to maintain clarity and consistency.
Financial accounting often presents past reports after the end of an accounting period.
2. Management Accounting
Management accounting concentrates on the measurement, analysis, and reporting of data to help in the decision-making of an organization.
In management accounting, internal measures and reports do not necessarily need to follow the generally accepted accounting principle.
Management accounting usually includes financial and financial information.
Management accounting generates past reports but also incorporates future reports such as budget.
Auditing is the confirmation and evaluation of statements made by others regarding the financial records of an organization.
Auditing is a professional service that is standardized and traditional. As an auditor, you will have to spend quality time checking financial records.
You will ensure that the records are correct and devoid of loopholes. Auditing work is very detailed oriented, you must read in between lines to be able to fish out mistakes and you must be flexible, have the ability to research, investigate and handle a great deal of data.
4. Tax Accounting
Tax accounting is the preparation, analysis, and demonstration of tax payment and tax returns.
Tax accounting requires reading lots of regulations. This role requires someone meticulous, and a researcher who is willing to help customers plan their taxes.
Duties Of An Accountant
1. Advising on how to reduce costs and increase profits
2. Auditing and analyzing financial performance
3. Help in financial forecasting and risk analysis
4. Regulating spending and budgets
5. Gathering and presenting financial and budget reports
6. Ensure that financial statements and records correspond with laws and regulations
7. Keeping account books and systems up to date, etc.
Main Soft Skills For Accountant
- Time management and organizational skills
- Strengthen numerical skills
- Active learning.
- Advanced analytical and problem-solving skills
- Strong written and oral communication skills
- Organization and attention to detail.
- Systems analysis.
- Mathematical and deductive reasoning skills
- Critical thinking skills
Training And Qualification To Become An Accountant
To become an accountant, there are training you need to undergo and qualifications you need to possess. The three main steps to becoming an accountant are:
1. You need to study accounting in the university and possess a degree in accounting. It takes at least four years to study accounting in Nigerian tertiary institutions
2. You need to possess some qualifications to ascertain yourself as an accountant. These qualifications are Chartered Accountant (ACA), Chartered Certified Accountant (ACCA), and Chartered Management Accountant (CIMA).
3. You can study online business and accounting courses to expand your scope and prepares yourself for the top.
Nigerian Accountancy Training institutions
Below are the Nigerian Accountancy Training institutions.
1. The Institute of Chartered Accountants of Nigeria (ICAN) school of accountancy
2. Institute for Forensic Accountants (IFA). It was established to offer educational training courses in the science of forensic accountancy, auditing, etc.
3. Chartered Institute Of Management Accountants of Nigeria (CIMAN). They provide intensive training for management accountants.
Career Paths of An Accountant
These are the possible career paths for accountants who are willing to build their careers in accounting. As an accountant, you can be one of these.
- Accountant (trainee, public, professional, and certified)
- Payroll administrator
- Budget analyst
- Credit controller
- Financial consultant
- Financial examiner
- Risk assessor
- Tax advisor
- Forensic accountant
Finance has to do with the management of capital and investment of individuals, companies, and governments.
Financial professionals are tasked with the responsibility of raising capital to fund businesses, answer customers’ questions and give advice about financial plans and strategies.
Finance is concerned with forecasting and planning for the future performance of corporations including long-term financial projections.
Segment of Finance
Finance is segmented into personal finance, corporate finance, and public finance.
1. Personal Finance
Personal finance has to do with the financial planning for individuals. This can be the purchasing of financial products such as mortgages, budgeting, banking, insurance, etc.
It can be long-term financial management plans such as retirement planning, tax, and estate planning.
2. Corporate Finance
Corporate finance as the name implies is the division of finance that involves the financial activities for running an organization through long-term and short-term financial planning and the implementation of the various strategy.
3. Public Finance
Public finance is the aspect of finance that deals with the management of government revenue. It includes the tax, budgeting, spending, and other strategies that pertain to how the government distributes resources.
Duties of Financial Professionals
- They carry out market research.
- They help execute clients’ strategies.
- They perform market analysis.
- They recruit and solicit clients.
- They meet clients’ needs and goals.
- They monitor accounts.
- They identify new opportunities.
- They propose strategies for
- They raise capital for clients, etc.
Soft Skills For Financial Professionals
Below are the top skills you need, to work in the financial sector
- Communication skill
- Negotiation skill
- Influencing skill
- Critical thinking skill
- Problem-solving skill
- Analytical and problem-solving skills.
- Research skills
- Knowledge of the stock market, trade, and investment
- Attention to details, etc.
Training and qualifications To Become A Financial Professional
To become a financial professional, there are training you need to undergo and qualifications you need to possess. These training and qualifications are:
1. You need a bachelor’s degree in finance, and to advance further, and enjoy immeasurable opportunities, you can consider having a master’s degree in finance or a master’s of Business Administration (MBA).
2. You can also build up yourself by reading major publications like the Wall Street Journal to gather information about the current economic climate.
3. Additionally, it is also advisable to have certification from the chartered financial analyst institute and become a Chartered Financial Analyst (CFA), these will help boost your career goal.
4. There are also online courses you can enroll in for further training.
Career Pathway of Financial Professional
Those who studied Finance in the higher institution can become one of the followings
- Investment banker
- Financial broker
- Financial manager or planner
- Financial advisor
- Financial analyst
- Commercial banker
- Financial manager
- Financial trader
- Insurance officer
- Financial consultant
- Investment banker
- Quant specialist
- Hedge fund manager
Similarities Between Accounting And Finance
Below are the similarities between accounting and finance
1. Accounting and Finance are interrelated as both have to do with money.
2. They involved the accessing and recording of financial transactions.
3. They both work with corporations, individuals, and the government to track and organize their financial information.
4. A financial analyst relies on the data compiled by an accountant to foresee a company’s financial strength and stability.
5. Accounting and finance are both important to businesses. They help keep business intact, help to regulate the expenditures of corporations, and help them make wise money decisions.
Differences Between Finance And Accounting
Below are the differences between Finance and Accounting.
1. In accounting, accountants are responsible for creating financial statements while Financial Analysts are primarily concerned with analyzing them.
2. Accountants consider past events. They take historical financial information to prepare their report The figures are always many months old by the time the report comes out.
However, Financial Analysts do not deal in past financial information, they try to predict the future by telling clients the possible risk and gains of investing. Financial analysts tell you what the future holds.
3. Finance analysts are always analytical and inquisitive. They are good listeners and they are always concerned with adding value.
Meanwhile, Accountants are detailed and procedure-oriented. They are accountable and concerned with accuracy.
4. Accounting is narrow, it is part of Finance, whereby Finance has a much broader scope and is more complex than Accounting.
Both Accounting and Finance degrees are important. They can secure you high-paid jobs and stable careers.
Moreover, you can become an accountant if you can collect and organize a large amount of information such as a corporation’s invoices, receipts, and financial records.
You can also become a financial professional if you want to analyze and interpret data, improve a company’s performance and build business strategies and models.
That’s all on Accounting Vs Finance: which you should pursue.