finance vs accounting

Hafsa khanDepartment of

Public AdministrationUniversity of Sindhjamshoro

Difference betweenAccounting &

Finance

Accounting and finance are both forms of managing the money of the business, but

they are used for two very different purposes. One of the ways to distinguish between the two is to realize that accounting is part of

finance, and that finance has a much broader scope than accounting.

ACCOUNTING FINANCE Accounting is the practice of preparing

accounting records, including measuring, preparation, analyzing, and the interpretation of financial statements. These records are used to develop and provide data measuring the performance of the firm, assessing its financial position, and paying taxes.

Finance is the study of money and capital markets which deals with many of the topics covered in macro economics. It is the management and control of assets and investments, which focuses on the decisions of individual, financial and other institutions as they choose securities for their investments portfolios.

Measuring, preparation, analyzing, and interpretation of financial statements. To collect and present financial information.

Decision making regarding working capital issues such as level of inventory, cash holding, credit levels, financial strategy, managing and controlling cash flow.

To see how the company is performing, to monitor day to day accounting operations, and for taxing.

To forecast the future performance of the business.

Balance sheets, profit and loss ledgers, positional declarations, and cash flow statements

Performance reports, ratio analysis, risk analysis, estimating break evens, returns on investment, etc

Revenue is acknowledged at the point of sale and not when it was collected. Expenses are acknowledged when they are incurred than when they are paid

Revenues are acknowledged during the actual receipt in cash as in cash flow and the expenses are acknowledged when the actual payment is made as in cash

ACCOUNTING FINANCE

Accounting functionalities involve,1.Recording of transactions (Online transactions, Journal vouchers)2.Checking the prime books (Cash book, Journals and Bank book) 3.Generating financial statements (P&L and B/S).

Finance functionalities involve,1. Bank co-ordination, 2. Sourcing and Application of funds, 3. Preparing Budgets and 4. MIS and EIS reporting

 The accounting is the entry of the financials transactions of the company or firm that include entry of the ledger accounts, preparation of the trial balances and preparation of the final statement. The costing is one of the branch of the accounting that is different from general entries of the financial transaction that involved with preparation of the budget of the company, find out and preparation of the product wise costing that is useful for finding the manufacturing cost and each product cost.

Finance the term itself suggesting that to make available funds for the companies various operation like its day to day activities , its future operation and for the expansion. The finance can also come after the accounting when the accounting entry done a person be able to analyze the financial condition and make a judgment for its future operations and able to finance its funds.

CAREERS IN ACCOUNTINGAccounting professions fall into two primary categories:

accountants and auditors.Accountants generally work within a business or other entity, auditors are often employed by external auditing firms that routinely check other businesses, usually within a certain industry

or sector, for financial improprieties or mismanagement. However, some accountants and auditors are employed directly by businesses or individuals (consulting) and internally monitor

financial documentation.Accountancy itself can be subdivided into public, management and government specializations.

Public accountants are responsible for recording and managing all the financial documents their clients, usually corporations, individuals or government entities, are required by law to

disclose; many focus exclusively on tax law and preparation. Forensic accountants work within the subcategory of public accountants and investigate or analyze financial crimes such as

embezzlement, contract violation and securities fraud. Certified Public Accountants (CPA’s) are masters of the accounting trade, having received extensive training in financial and tax

reporting. CPA’s must pass one of the most rigorous post-graduate examinations in the world, which has a less than 50% first-time pass rate, and typically command top employment and

salary prospects within their field.Unlike public accountants, management accountants work for private companies and oversee

internal financial documentation, including budgets and cost analytics. Their duties overlap with those of financial analysts in that management accountants may also advise on

investment opportunities and asset management. Government accountants specialize in financial operations subject to government oversight or conducted by government itself, and

their employers are both private and public, from the municipal to the federal level.

CAREERS IN FINANCESome financial analysts can be categorized

according to their expertise in popular investment products.

For instance, fund managers buy, sell and project the future value of hedge or mutual funds;

portfolio managers oversee their clients’ entire investment portfolios, which may include stocks,

bonds and real estate.Other financial analysts are adept at certain

analytical or financial activities, such as ratings analysis, the study of a business or government’s ability to repay its debts and risk analysis, which

involves projecting ROI on various investments and advising clients accordingly.

Another way of dividing financial analysts is “buy-side” versus “sell-side.”

Buy-side financial analysts provide investment procurement and management strategy for their clients; sell-side financial analysts advise sales

teams disbursing stocks, bonds and other financial products.

CAREERS IN AUDITINGA bachelor’s degree in accounting is typically required for the following

auditing-related careers:• Internal auditor: Internal auditors review organizations to determine how well funds are managed. They may point out ways to reduce waste, avoid fraud and improve profits. Jobs for accountants and auditors are

projected by the BLS projects to grow by 13% through 2022.• Information technology auditor: IT auditors review the controls for an institution’s computer and data processing systems. Their job is to ensure that financial data is accurate and reliable. The BLS projects employment

for accountants and auditors to increase by 13% through 2022.•Financial examiners: Financial examiners keep tabs on banks and other

financial institutions, to make sure they comply with federal and state laws.

They review financial information and loan documentation, and establish procedures to ensure regulatory compliance.

Financial examiners also help consumers avoid predatory loans that charge excessive interest and can damage credit scores. The BLS projects steady job growth for financial examiners through 2022.

CAREERS IN ECONOMICSA degree in economics can lead to careers such as:

• Management analyst: Management analysts are projected to be in high demand in coming years, as the BLS projects these jobs to grow by 19% through 2022. Management analysts improve organizational efficiency by analyzing problems and developing plans to solve them.

They may recommend alternative practices, new procedures or organization changes.

• Budget Analyst: Budget analysts work with private and public organizations to safeguard their finances and monitor spending. They develop budgets, ensure compliance with procedures and regulations, and make recommendations to management. The BLS projects steady

growth for budget analyst jobs in the coming years.

• Financial examiners: Financial examiners monitor banks and other financial institutions’ financial health, by reviewing their balance

sheets, loan documentation, and assets and liabilities. They specialize either in risk scoping or in consumer compliance. Financial examiners

are often employed by the federal or state governments and other agencies. The BLS also projects steady job growth for financial

examiners through 2022.