Finance vs Accounting

Updated on April 11, 2024
Article byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Differences Between Finance and Accounting

The key difference between Finance and Accounting is that finance is the management of the money and the investment of different individuals, organizations, and other entities, whereas, Accounting is the process of recording, maintaining as well as reporting the financial affairs of the company which shows the clear financial position of the company.

Finance vs Accounting

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Many students think that finance and accounting stem from the same domain of expertise. But ask an accountant or a finance guy who has been working in a corporation for a long time. They would tell you how different they are in their nature, the scope of work, and areas of expertise.

Finance vs. Accounting Comparative Table

Comparison FinanceAccounting
DefinitionFinance is the science of planning the distribution of assets within the company.Accounting, on the other hand, is the art of summarizing,
reporting and recording the finance-related transactions
Career Options
  • Investment Banking,
  • Corporate Finance,
  • Equity Research,
  • Private Equity,
  • Risk Management,
  • Quantitative Analysis,
  • Project Finance,
  • Technical analysis
EducationBachelor in finance, accountancy, economics or mathematics; MBA,
CFA, FRM, PRM, , CFA focusses on imparting skills associated with Investment Management including Investment Analysis, Portfolio Strategy, Asset Allocation, and Corporate Finance. MBA focusses on overall Management Skills like Marketing, Operations, Finance, Human Resource Accounting, moreCFPCFPCFP is a certification that helps people to plan their finances well. In the USA, the average age of the population is 36.8 years. Thus, the need to reach their retirement age with a good net worth is a priority. read more and more
Bachelor in Accounting, Masters in Accounting, CA, CPA, ACCAACCAThe Association of Chartered Certified Accountants is a competent and leading global accounting body. This qualification gives you recognition as an employee who can help in all aspects of a more, CIMACIMAThe CIMA qualification is a globally recognized credential offered by the Chartered Institute of Management Accountants in UK to individuals interested in pursuing a career in the specialized field of management more, CMACMACMA is a certificate course offered by the IMA. Here are a few exam tips: 1) Don't panic if you don't know the answer 2) Don't get distracted during the multiple-choice section. 3) Keep track of the time and increase your more
Top Firms
  • Blackstone,
  • Goldman Sachs & Co
  • Morgan Stanley
  • Bank of America Merrill Lynch
  • Credit Suisse
  • Citibank
  • Deutsche Bank
  • HSBC
  • UBS
  • J.P.Morgan Chase & Co
  • PwC LLP
  • Deloitte LLP
  • Ernst & Young LLP(EY)
  • Grant Thornton LLP
  • Crowe Horwath LLP
  • Moss Adams LLP
  • Baker Tilly Virchow Krause, LLP
Work-Life BalanceIt depends on which subdomain in Finance you are working for. Investment Banking – it is brutal! Equity Research is still OK. Buy-SideBuy-SideThe term "buy-side" refers to entities that advise their clients like individual investors and institutional buyers on investments and securities purchases. Private equity firms, mutual fund companies, life insurance companies, unit trusts, hedge fund companies, and pension fund entities are examples of buy-side more Analyst has a balanced work life. Depending on the area, you may have to work for 10-18 hours a day.Balanced – Much better than the Financial Analysts. Work is not urgent all the time of the year.
TravelMostly they are not required to travel much. You can safely assume that 90% of the time is spent in Office.Not much of travel is required by economists.
Key WordsFinancial Modeling overviewFinancial Modeling OverviewFinancial modeling refers to the use of excel-based models to reflect a company's projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their more, Valuations, M&A, NPV, IRRJournal, ledger, trial balance, balance sheet, cash-flows, income statement
Exit OpportunitiesDepending on the chosen area of interest, there are some amazing exit opportunities within the Finance sector.
For example, Investment Bankers moving into Private Equity, or Research Sell-side analyst moving into a Buy-Side Analyst profile.
CFO, Managerial Positions, Corporate Finance
Networking OpportunitiesMostly work within the Financial Industry. The alumni network is strong but not varied, as found in the Consulting.Not much. Limited within the domain alumni network
Compensationfinance management professional earns around US $84,800 per annum on an averageThe median annual salary of an accountant is around US $65,940 per annum.
ProsYour options in this field are much more than in any other profession. You just need to know your career goals, and you can pursue any financial career accordingly.
Success in the finance domain mainly depends on technical skills and much lesser on personality traits.
As an accountant, you can move to many different careers. You can work as an auditor or a tax consultant, or you can choose to go for management accounting.
The best part of accounting is its work-life balance.
ConsThe compensation in most of the finance professions doesn’t reach six-figure marks. Few do. If you want to get compensated well (above average), you need to work on yourself.
Work-life balance is dependent on the domain of work. But the work pressure always prevails.
The domain is very narrow, and rarely do you have an opportunity to specialize in something broader.

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Finance vs. Accounting Video Explanation

What Is Finance?

Finance is a vast field with general financial functions. In this core field, a professional has to perform various actions over and above these functions below:

What Is Accounting?

In finance, the idea is to distribute assets (current plus fixed) in an inappropriate manner. Accounting comes after that. It helps the organization measure the contributions of resources in different business areas. Doing this helps the business gain clarity about whether to change the resource allocation or go on with the same arrangements.

The four most important functions which make accounting different from any other domain are as follows:

  • Organizations also need to pay their creditors. These are the liabilities of the organization. As an accountant, you need to ensure that these payments made/ paid in advance/ payment due are properly measured.
  • Organizations have many contracts to fulfill. Accounting determines whether the contracts are being fulfilled or not.
  • Disclose the information to the public and Government to maintain the transparency of the business and to ensure an accurate picture of the organization’s financial position.

Finance Vs Accounting – Infographics

Let’s see the top differences between finance vs. accounting.

Finance vs Accounting

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Finance Vs Accounting -Careers

In layman’s language, finance is the science of planning the distribution of assets within a company. On the other hand, accounting is the art of summarizing, reporting, and recording finance-related transactions. So now, let’s go deep and understand what finance and accounting are all about.


Finance can be divided into two main functions.

  • The first is to ensure that the operation of the business is done correctly. For that, the business needs to source funds.
  • The second function of finance is how the funds would be distributed for the maximum return on investments for business once the funds are sourced.

But that’s not it. There are many more things in finance that finance executives and professionals have to pay heed to. For example, people involved in finding out which projects are best for clients to invest in regularly perform financial analyses.

Many professionals are also engaged in valuing the companies and finding out which companies to buy for expansion. Finance is a complex domain, and many subdomains are inherent within it. So it would be best if you found out which sub-domain you like and chose to expand your career in the same subdomain. You can go into corporate finance Project FinanceProject FinanceProject Finance is long-term debt finance offered for large infrastructure projects depending upon their projected cash flows. Moreover, an investor has to form a Special Purpose Vehicle (SPV) to acquire the same. read more, investment analyses, Equity ResearchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company's financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports. read more, financial analysis, valuation, risk management, and so on and so forth.


Take, for example, that you want to improve upon an area of your life. What would you do? You would start tracking the area you want to improve upon and record everything you do or don’t do. And then finally, you come to a conclusion where you are in that area so that from there, you can change your direction. The primary purpose of accounting is similar. A company needs to be profitable in reality and on paper. Using accounting, the company understands how many liabilities they have, how many assets they own, how many taxes they need to pay, and how profitable the company is.

Finance Vs Accounting -Degrees


In finance, there are a hundred streams you can go into. Depending on your goal, here’s what you should do.

  • First, complete your Bachelor’s degree in Finance or Accounting. If you want to be in a managerial position in a big corporation, go for an MBA in Finance from a reputed institute.
  • With an MBA degree in finance, you can also go for Investment Banking, but in that case, you need to have the grit for analyses and valuation also.
  • Besides MBA, you can also go for core courses, like CFA, FRM, CQF,  Actuary, and many other core domain courses. They are internationally recognized, and if you want to pursue a career in these core domains, having a certification will pave your way.


In the case of accounting, it’s more of a narrow path. But that doesn’t mean you can’t make your mark in this field.

  • Accounting is the foundation of finance. Thus you can pursue a Bachelor’s degree in Accounting or Finance and then choose to go into accounting instead of finance.
  • The two best courses you should opt for are C.A. and CPA. Both are globally recognized and would add tremendous value to you as a professional.

Finance Vs Accounting – Work-life Balance

The finance domain has varied sub-domains. And in each sub-domain, the work-life balance is different. For example, if you are an equity research professional, you will get enough time to relax, get home at night, and spend the weekend with your family. But let’s say you’re an investment banking professional. You may not get time even for yourself; leave the chances of spending time with your near ones. So, according to the domain of finance, work-life balance varies.

In the case of accounting professionals, work-life balance is mostly maintained. Except at the end of the financial year and at the time of tax payment, accounting professionals maintain a good work-life balance most of the time.

Finance Vs AccountingSalary

Let’s dive into the salary curve and the job opportunities of each of the domains.

But, first, let’s talk about finance professionals.

According to, the median salary of finance professionals is the U.S. $84,800 per annum.

Finance vs Accounting - finance-manager-salary


Let’s have a look at the salary of finance professionals as per the experience –



However, according to the Bureau of Labor Statistics, U.S. 2014-15, it was found that the mean annual salary of finance professionals is the U.S. $69,184, and growth is terrific. It’s predicted that in 2022, the salary growth for finance professionals will be 16%.

Now, let’s have a look at accounting professionals.

According to U.S. News, the median annual salary of an accountant is around the U.S. $65,940 per annum. The 75th Percentile is the U.S. $87,530 per annum, and the 25th Percentile is the U.S. $51,130 per annum.



Let’s have a look at how the salary of an accountant has changed over the years –



If we compare the salary of accountants over the last eight years (from 2006 to 2014), we will see that the salary has increased by the U.S. $13,420 per annum, which is a small number. However, according to the Bureau of Labor Statistics, U.S. (2014-15), the salary of accounting professionals will increase by around 13% in 2022. Therefore, from the above graph, we can say the claim is appropriate.

Let’s look at the comparison of accounting with other best jobs in terms of salary –



From the above graph, it’s clear that the salary of an accountant is much less than the salary of finance professionals.

Finance Vs Accounting -Pros and Cons

#1 – Finance

  • Finance has many sub-domains. Thus if any student wants to pursue finance, she doesn’t need to get stuck in one narrow avenue of work, and she can explore as much as she can. So if you want to pursue a career in investment banking and later find it demanding, you can switch to an equity research profile.
  • Finance needs technical skills. If you can learn a few important technical skills like financial analysis, valuation, financial modeling, VBA, and Quantitative Finance, your success as a professional will be much higher than those who have acquired only basic skills.
  • If you stay in the finance domain for a longer period, you will be paid much more than in the accounting domain.
  • As finance has so many sub-domains, it sometimes gets difficult for students to decide what to choose and what to leave behind. We can call it analysis-paralysis.
  • If you work in general finance, you will not get compensated well. The only way to earn more in the finance domain is to specialize.

#2 – Accounting

  • The best part of accounting is its work-life balance. Rarely is there any pressure, and if you’re good at accounting, you don’t need to worry about the security of the job.
  • Even if the scope of accounting is narrow, you can still specialize in auditing, taxation, or pure financial accounting and can ensure better pay.
  • The domain is very narrow, and rarely do you have an opportunity to specialize in something broader. That doesn’t mean you can’t do much in accounting. But people who are in love with repetitive work enjoy working in this profession.
  • The compensation in this domain is not up to the mark. But if you can complete C.A. (only 2% of entire applicants pass the exam), you will have better prospects.

Recommended Articles

This has been a guide to Finance vs Accounting. We explain the differences between the two in terms of degree, salary, and careers, along with an infographic. You may also have a look at the following articles –

Reader Interactions


  1. Kat says

    Thank you so much. This is the best explanation I’ve found about the differences between these two. And I like that the work-life balance and growth opportunities for each path were included.

    • Dheeraj Vaidya says

      Thanks for your kind words!

  2. Edward Cross says

    Very interesting resource. I like the way you explain each and every thing in detail. This may be one of the best articles that I have seen on Accounting and Finance.

  3. Omar Cunningham says

    Thanks for this article. You really made me to understand the actual pros and cons between Finance and accounting. Good work. If you could also explain me about Financial Statements? I would also like to know if you have any case study related to this.

    • Dheeraj Vaidya says

      Thanks Omar. And I am glad you found this useful. Well to tell you in simple words. Businesses record their financial or other performance in standard statements called as Financial Statements. Mainly there are 3 basic financial statements. They are Income Statement, balance sheet and cash flow statement. If you want know more about Financial Statements you can go to this Ratio Analysis Guide. In this I have taken a case study on Colgate and Calculated Ratios in excel from scratch.