Finance Versus Accounting Degrees: What's the Difference?

To the layman, finance and accounting may seem like synonyms. If fact, although they are allied in many ways, there are some important differences between the two. Savvy students will quickly see the similarities and differences, especially if one is interested in pursuing a degree in either (or both) of them. The information in this article is summarized from a white paper by Business Administration Information (BAI), an education and advocacy business organization. 

Finance versus Accounting in a Nutshell:

Finance is principally focused on the management of money and investments for organizations and businesses. A finance person looks at the big picture and is generally forward-looking, tuned into financial projections, market trends, and money strategies. A finance professional must have excellent communication skills and be comfortable in group-think settings.

Accounting, on the other hand, involves a much more focused look at the nuts and bolts of money movement in businesses, organization and for individuals. Accountants are detail oriented. They are well versed in the vagaries of taxes, budgets and day-to-day business costs and cash flows. Good accountants posses excellent inter-personal skills and a fine interest in detail. 

Finance Careers:

There are a wide variety of career paths in the finance arena. Specialization with the overall financial field is common. Here are several possibilities:

• Portfolio Manager: This person oversees the investment mix (stocks, bonds, real estate, precious metals) in an organizations investments.
• Risk Analyst: A Risk Analyst is responsible for the evaluation of financial risks associated with investments or company financial policies.
• Fund Manager: These professionals work largely in the mutual fund or hedge fund industries, managing the investment in these pooled portfolios to obtain maximum returns for investors.

Accounting Careers:

Accountants also have many career paths form which to choose. Many accountants earn certification in their expertise. Being a Certified Public Accountant can open doors to many lucrative opportunities. Here are a few:

• Tax Accountant: Particularly busy in the first quarter of each year, tax accountants oversee the compliance with tax laws and the preparation of tax returns for businesses and individual taxpayers. They also step in if tax audits should occur.
• Government Accountant: With its huge array of financial programs and dealings, government at federal, state and local levels is always in need of accountants.
• Public Accountant: Public accountant are perhaps the best know accountant type in the field. They manage all financial documentation for businesses, organizations and individuals.

What is the best Choice?

Both degrees offer an opportunity for challenging, high-paying careers in fields that are always in demand. The most important criterion that you might like to consider is you: What is your personality and temperament and how would that fit into one or both career paths? In essence, which field of study fits you best? Ultimately, it's up to you to discern.

Phil Shawe is the Co-Founder and Co-CEO of TransPerfect, a global family of companies and the world’s largest privately held provider of language and business services.