Finance vs. Accounting: Key Differences to Help Choose Your Next Field With Confidence

We have addressed some of the biggest and most common concerns that many people have when trying to compare accounting and finance. From varying skill sets, different salary expectations, and more, we’ll walk you through the ins and outs of both career paths. 

This is the ultimate guide to study before you make a commitment either way. You should have a thorough understanding of each career choice before you choose a path. This just could be one of the biggest decisions of your life. 

So why not let us take you through both disciplines and help you choose between them? 

Finance vs. Accounting by Definition

They may seem identical but the definitions of accounting and finance are quite different. Let’s take a look. 

Accounting: Accounting is the practice of measuring, preparing, analyzing, and interpreting financial statements. This information helps measure the performance of a business and its financial position. 

The data is also important for the payment of taxes. Accountants use balance sheets, cash flow statements, and ledgers to track daily operations. They focus mainly on the past performance of businesses and individuals. 

Specializations in accounting include:

  • Financial accounting: This is the use of balance sheets, income, and cash flow statements to provide information. This data is used by stakeholders such as investors, tax authorities, and creditors. 
  • Managerial accounting: Managerial accountants use the same information as financial accountants. Internal staff then use the information to make decisions about business operations. 
  • Cost accounting: This involves studying balance sheets and income and cash flow statements to find ways of minimizing the cost of production. 

Finance: Finance deals with investments and the management of assets. A financier will focus on decisions about working capital for businesses and individuals. 

They deal with inventory, credit levels, cash holdings, and financial strategy. Finance will usually focus on the future performance of a business or individual. 

Finance can be divided into three sub-categories:

  • Personal Finance: This includes long-term financial planning for individuals. Some of these include retirement and the purchase of financial products such as mortgages. 
  • Corporate Finance: This involves the financial activities of the running of a business. These activities can include investment strategy and budgeting. 
  • Government Finance: Public finance examines tax and government policies. The information studied will affect how resources are allocated. 

By looking at the different definitions, and a summary of the skill sets, you can see which career path best suits you. You can align your skills, financial needs, ability to travel, and career aspirations with the correct job. 

Finance vs. Accounting Salary

Salaries in both professions will depend on the experience of the individual as well as the industry for which they work. 

Entry-level accountants earn an average of $40,777 and the topmost level accountants can make up to $83,800

In New York, some accountants can earn more than $60.000. The region with the lowest accounting salary is in North Carolina with an average of $44,281

According to the Bureau of Labor Statistics, the nationwide average for an accountant’s salary is $71,550. 

The truth is – depending on the type of career you choose, these numbers can have a wide range. 

BLS states that accountants in insurance and finance firms earn the highest salary at $74,690. 

It’s important to note that auditing clerks earn the least and with negative job prospects, it’s a career that’s on the decline. 

Technological improvements have automated some of the roles, hence the decline in open opportunities. This could also affect the accounting industry to a lesser degree. 

People who have specialized in finance can earn a lot of money as they move up the ladder. 

Median Annual Salary (USD)Number of Jobs in ’18Job Outlook ’08 – ’28Employment Change ’18 – ’28
Auditing Clerks$41,2301,707,700-4%-65,800
Accountant$71,5501,424,0006%90,700
Financial Analysts$85,660329,5006%20,300
Personal Financial Advisors$87,850271,7007%19,100
Financial Managers$129,890653,60016%104,700

Similarly, there are different levels of financiers, all earning varying salaries. 

If compensation is a big factor when considering a profession, becoming a financial manager is your best option. Actuaries are some of the highest-paid financial workers, earning from $150,000-$250,000. 

The Different Finance vs. Accounting Job Roles

Accountants need to be extremely precise as they often deal with large amounts of money. Even the slightest error can result in a business or client losing money. The role requires attention to detail and a high level of organization. 

Accountants often work alone so this role is perfect for introverts who will mainly create written reports for senior management. 

Financiers on the other hand need excellent communication skills and must be able to interact extensively with senior executives. The job requires presentation and interpersonal skills as they present reports to an audience. 

This is ideal for extroverts who are confident and able to handle high-pressure situations. 

Your interests, education, and skill sets may influence how you view the different roles required by accountants and financiers. Take a look at our list of job roles below. 

Financial Officer Job Roles:

  • Analyze and interpret financial reports to advise managerial teams 
  • Raise capital through debt or equity
  • Create and put in place a corporate strategy
  • Budgeting and forecasting (monthly, quarterly, annually)
  • Handle mergers and acquisitions
  • Risk management
  • Evaluate and advise on investments 
  • Implement cost-reducing solutions

Accountant Job Roles:

  • Collect, organize, and track financial information 
  • Prepare financial reports that meet government and stakeholder requirements
  • Prepare financial reports for internal use by staff
  • Conduct audits to ensure legality and adherence to policies
  • Prepare tax returns and report income to the IRS
  • Advise clients and firms on how to minimize tax liability

Accounting vs. Finance Personality Types

Not everyone can be an accountant or a financier. There are personality traits that will make some people more apt to perform well in each career. 

We’ve taken a look at one of the most popular personality tests used by organizations across the world. It helps employers decide if a potential employee is fit for the role. This sort of personality testing can help you determine which profession you are more likely to enjoy or excel in. 

The Myers-Briggs Type Indicator shows how people use their perceptions and judgment. The MBTI instrument measures preferences, not ability or character. 

Used by Fortune 500 firms the MBTI personality test is helpful before placing an individual in any specialized role. 

The personality type ISTJ (Introversion, Sensing, Thinking, Judging) is, well-suited for accounting positions. These people are systematic, analytical, and have a high work ethic. 

Known as ‘The Inspector’, they are traditionally serious and loyal. Leaning towards facts, they perform accounting jobs efficiently. Accuracy is key when they have to look through many documents and information. 

Financiers are shown to be INTP personality types. This stands for introversion, intuition, thinking, and perceiving. 

Let’s take a closer look at some of the different personality traits which accountants have vs. financiers. 

Accountant:

  • Detail-oriented 
  • Risk manager 
  • Procedure-oriented 
  • Able to use rule-based thinking 
  • Accountable 
  • Accurate 

Financier:

  • Attentive to detail 
  • Can conceptualize scenarios 
  • Analytical 
  • Inquisitive 
  • Business development skills 
  • Problem-solving skills 

Before diving in, why not take the MBTI test to better understand your personality. Free versions are also available online although they are not the original test. 

You can also check at your school’s career center or your work’s HR department if they offer the test. 

The results may surprise you and they will be key in avoiding a career incompatible with your personality. It will show you your strengths and weaknesses and guide you into a job that suits you specifically. 

Financial Analyst vs. Accountant

After taking the test, you should have some direction as to which job you would like to pursue. Though similar, these two professionals perform very different jobs

Let’s take a brief look at the major differences in daily duties and work environments. 

Financial analysts have a broader job description and their roles are less fixed. They deal with the management of assets and liabilities. This enables them to make future predictions and advise management. They develop investment strategies and are in charge of how to make use of company resources. 

Some financial analysts’ duties include: 

  • Analyzing stock fluctuations. 
  • Creating simulations to forecast the outcomes of financial transactions. 
  • Reviewing spending and revenue projections. 
  • Liaising with management teams to offer advice on financial decisions. 

Accountants have a more structured role and are heavily involved in taxes. They deal with the day-to-day flow of money in and out of a business. 

Some duties performed by accountants include:

  • Organizing company accounts. 
  • Reviewing records to reduce spending and increase profits. 
  • Developing and managing working budgets. 
  • Preparing taxation procedures. 

Generally, both types of employees work 40-50 hours per week. Accountants have a busy February to April tax season where they may work up to 70 hours a week, depending on the number of clients they work with. 

The work environment also differs as financial analysts often have their own offices. Many accountants, especially at entry-level, work in cubicles, although many high-level accountants will likely have the luxury of their own office. 

Can I Combine Finance and Accounting?

The careers are somewhat related, and some employees may perform some of the same tasks. 

The topmost position of either of these professions is that of Chief Financial Officer. It is essentially a combination of finance and accounting in one position. 

With the right experience and educational background, you could have the opportunity to manage a business’s finance or accounts departments. 

CFOs are tasked with the financial planning of a business. They also need to oversee the organization’s cash flow. 

To get to this leadership position, you will need to understand both job roles. You will need to supervise employees and perform tasks required in each profession. CFOs need a combination of skills including:

  • Leadership skills 
  • Management skills 
  • Accounting skills 
  • Data skills 
  • Strategy skills 

Besides a Bachelor’s degree, to reach this management position, often you will need a Master’s Degree. An Executive MBA is a good option if you already have some work experience. 

The Difference Between Finance and Accounting Degrees

Both jobs need a basic Bachelor’s degree but further education courses differ. For financiers, it is advisable to be a member of the CFA Institute. Accountants, however, are usually required to complete a CPA certification. 

See the details below:

So which degree is best? Everything is relative and will depend on your strengths. 

Generally, accounting majors at the undergraduate level are not easy. Students say finance on the same level is much easier. 

If you are starting your undergraduate level, it may be advisable to take a joint degree. It will provide you with general knowledge of both professions and help you choose the best path. 

Accounting does not increase in difficulty at higher levels. But finance does, gradually. 

Benefits of Studying Accounting

Accountants are necessary for all businesses and the profession is currently growing. According to the BLS, accountancy is expected to grow up to 10% between 2016 – 2026. 

Having the right information can help you choose which industry you want to work in. This is a way for you to begin to define a clear career path. 

Usually, after graduation, you may start as an entry-level associate with high growth and earning potential. 

Additional certifications will help you advance your career and get a job almost anywhere in the country. 

Another option is to start your own business. If you have an entrepreneurial streak, you can become your own boss after a few years of work experience. 

If you enjoy systematically working with rules accounting is the course you should study. 

Benefits of Studying Finance

Finance offers a wider range of study options compared to accounting. You will cover a variety of specializations used in the business world. You will also be exposed to areas such as economics and banking. 

By studying finance, you will gain the necessary analytical skills to interpret data. 

The knowledge will also be useful in your personal life. You will learn how to make smart investments and handle your finances effectively. 

The career opportunities for graduates are immense and the earning potential is higher than many other careers. You will also learn how to make extra wealth and not just rely on your salary. 

The Best of Both Worlds?

Advice online seems to lean towards studying both degrees. 

Source: quora.com

So now, what is the best way to advance your career? An MBA or EMBA degree is common for both accountants and financiers. It will give you the extra edge over and above your basic degree. 

For this with some years of experience, an Executive MBA will allow mid-career professionals to work and study at the same time. 

If you do not have extensive experience, a free online MBA is your best option. By choosing students from the world’s top universities, Quantic School of Business and Technology gives you a chance to network with fellow students either face to face or online. 

Remote Work and Leadership in the Time of COVID-19

The COVID-19 pandemic has swiftly and completely turned the world on its head. Businesses shuttered and those who were able, transitioned to working from home. New challenges arose and managers and executives around the world have been forced to adapt in order to lead their teams remotely. Quantic surveyed these leaders — over 450 managers, executives, and professionals who also happen to be students and alumni of our MBA and Executive MBA programs. The emphasis of this survey was on the 90 percent who went from working in an office to working and managing their teams from home. 

The move to working from home comes with a distinct set of challenges — coincidentally, these challenges are frequently cited as benefits of working in an office. For example, some of the top challenges faced by leaders as they worked from home were communication, collaboration, productivity, and creativity — all aspects that were seen as highly valuable to working in an office environment. 

There were also some hopeful results — most Quantic students felt relatively confident in their employment status and had optimism about the future, with nearly half (49 percent) saying that while they felt COVID-19 was changing their industry forever, 38 percent felt it was evolving into something new, and 33 percent feel their industry is changing for the better.  

Watch the video for a look at the top insights on career and industry outlooks, and what it’s been like to lead and manage remotely during the COVID-19 pandemic.

Download the PDF version of the results here.

These acts of racism, police brutality and hatred must end

Over the last couple weeks, we’ve experienced deep anger and sadness following the murder of George Floyd. And simultaneously, we’ve been inspired and felt a surge of hopefulness at seeing the response of our nation, fed up with systemic racism and police brutality, standing together to protest for long overdue change. How do we hold on to these disparate feelings, images, realities? And what do we do with them? 

One thing is certain: this hatred, this intolerance, this complete and willful ignorance — it must end. 

While George’s name has dominated the news cycle in the US, there are countless others, here and around the world, who like George, have suffered simply because of the color of their skin. We aren’t experts in this matter, nor do we have the answers for how we keep the momentum from recent protests to enact lasting change. Regardless, we feel it’s necessary to communicate our unequivocal and unwavering solidarity with the Black community. 

As a global institution, the diversity of our students and alumni is what makes us what we are — in fact, it’s one of our greatest strengths. As an organization, we are turning a critical gaze inwards, asking ourselves how we can do better to acknowledge and address the ways in which systemic racism clouds our vision and holds us back from reaching our collective potential. 

There are many organizations with extensive experience in addressing racism, civil rights, and creating opportunities for the Black community while amplifying their voices — and they are far more deserving of the spotlight at this moment than we are. For that reason we’ve donated to Black Girls Code, Black & Brown Founders, and the National Museum of African American History & Culture. We are taking time to listen to them, to donate, to reflect, to internalize our own faults, and take action — and we implore those in our Quantic community to do the same. 

The Quantic Student Experience

Wondering what it’s like to be a Quantic student? To start, Quantic’s award-winning active-learning platform is much more than an app. As a student, you’ll engage with a global network of highly driven professionals who are leaders in their respective fields. You’ll have opportunities to discuss coursework and case studies and share perspectives with classmates virtually and in person at meetups and Executive MBA conferences held around the world. 

In addition to collaborating with classmates, Quantic students can take advantage of a variety of resources to help further their learning and prepare them with the skills needed to excel in today’s business world. The library includes membership to paid databases and you’ll have lifelong access to all courses — including those that have yet to be added to the curriculum so you’ll always be equipped with the latest in-demand skill sets. 

Quantic is committed to helping students reach their goals post graduation, too. To support you, Quantic has an in-house research advisor who can help guide your studies and make sure you’re getting the most out of your experience. And our resume and cover letter consultations ensure you’re putting your best foot forward with future career moves. Also, you’ll have access to exciting job opportunities through our built-in career network, Smartly Talent

Interested in the #ModernMBA? See what the Quantic experience is all about.

Quantic MBA Student James Lu Morrissey on Higher Education and Making Forbes 30 Under 30 List

We sat down with 2019 Forbes 30 Under 30 recipient–and Quantic School of Business and Technology MBA student–James Lu Morrissey to discuss co-founding Mentor Collective, learning with Quantic, and disrupting the world of higher education.

Quantic learners tend to reflect the platform itself: innovative, disruptive, and equipped with a global scope. Those are just a few of the qualities that have led to three Quantic learners being named to Forbes’ 30 Under 30 lists in the past two years.

James Lu Morrissey (MBA – August 2018) is a perfect example of this. Lu Morrissey’s personal experiences with international education inspired him to found his company Mentor Collective, an international online mentoring community. Lu Morrissey was born in the United States, but he attended elementary school for a couple years in Taiwan. Moving to a new school can be difficult for any child; moving to a new school in a new country is even more challenging.

Adjusting in school was made easier, however, by joining the school’s sports teams. There, he was mentored by his older teammates, who eased his transition and helped him find his place. At a young age, he began to understand that mentorship was critical to adjusting to and excelling in a new environment.

He also recognized the need for peer mentorship as an undergraduate student at Carleton College. He had several friends from international and diverse backgrounds, and he noticed that many of them had difficulty adjusting to college. There wasn’t always a clear structure like a track team with teammates that could mentor them.

“When adjusting to college, all students are a stranger in a strange land,” Lu Morrissey reflected. “You might be coming from Minnesota to go to NYU. That’s a very foreign experience.”

A lack of personalized support for college students is one of the factors contributing to a college completion crisis, particularly at public universities. According to Forbes, less than 60 percent of students graduate from public institutions in six years or less. Rising tuition and student loan debt coupled with the increasing necessity of a college degree for career advancement, often puts students who do not graduate at a serious disadvantage.

To solve this problem, Lu Morrissey and colleague Jackson Boyer co-founded Mentor Collective. Mentor Collective uses scaleable and transformative mentoring, through a format supported by technology and designed for large-scale application. Mentor Collective achieves this by matching students to mentors who have a similar background.

To that end, Mentor Collective has developed partnerships with more than 50 universities, including Penn State, Johns Hopkins, and Washington University in St. Louis. Through these partnerships, they’ve mentored over 35,000 students, resulting in an up to 9% increase in retention rates and 5x decreased likelihood of academic probation.

Working towards these results has certainly kept Lu Morrissey busy, but he has still found time to pursue a Quantic MBA. While residential MBA programs have a high opportunity cost, Quantic made it possible for Lu Morrissey to “continue running my company day-to-day, while having a flexible option to learn at my own pace.”

Furthermore, Lu Morrissey has found Quantic’s courses are directly applicable to running Mentor Collective. “I can complete a lesson, take what I’ve learned, and use it the very next day at Mentor Collective.”

Lu Morrissey also appreciates the flexibility and global perspective that Quantic offers. He tries to work overseas for two to three weeks every winter, and, with Quantic’s online platform, he doesn’t have to disrupt his learning schedule to travel. “I can do Quantic while traveling in Shanghai and not have any problems with time differences.”

Lu Morrissey also sees both Quantic and Mentor Collective as helping students receive the full value of higher education. Universities, with “massive endowments and very strong brands,” may not feel the urgency or need to innovate “in the same way as many other industries,” Lu Morrissey noted. “And that can come at a big cost to students. If a school is not making an impact on students’ lives, then it’s not fulfilling its promise.”

Like Quantic, Mentor Collective’s team is passionate about the students they reach. Lu Morrissey attributes Mentor Collective’s success rates in large part to his 24 Boston-based employees. Noting that his team is interested in social impact, he emphasized that “something unique happens when you collect a lot of very mission-driven, hungry learners and put them all in the same room.”