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Finance Accounting Difference

The obvious question that would arise in the minds of any student who likes to pursue a career in either finance or accounting is that, “What is the difference between finance and accounting?” This is indeed a valid question and you have found the right article to get your question answered.

First of all let us start with finance. Finance is something that is dealt with the flow of cash in and out of the company. Consider a finance manager in a company. He has to take care of all the fiscal matters associated with that company like the profit, the money spent in buying the required raw materials (in case of a production oriented organization), the cash outflow for the payments for its workers and lot of other things. And finally the finance manager has to prepare a statement regarding all these expenses and profits and prepare a finance chart called as the financial statement. It is a very elaborate procedure and would require lots of thoughts to be put in before preparing a financial statement.

But things are not over here. Finance manager has to act as a leader sometimes. He has to take precise care of the quantity of money that flows out based on his predictions and calculations that will prove successful for the organization. When it comes to accounting, things are a bit different. Accounting relates something with the assessment of a company’s performance over a period of years; say ten years and also provides precise details about the progress of the company from the previous year. Mostly accounting is confined only with the balance sheets, financial statements about the total expenditure and total income and to check whether it tallies accordingly. But the solid difference between accounting and finance is that it makes use of accurate principles of accounting in order to get to the digits rather than the GAAP approach in finance. GAAP is nothing but Generally Accepted Accounting Principles and it does not stress much on the accuracy of the figures given by a finance manager whereas accounting managers give out only the correct values.

To go in much deeper, accounting is a far more easier job with lot of emphasis on the accuracy and anyone with considerable calculation and basic knowledge in finance can do this stuff whereas finance management of an organization requires greater skills of man management, leadership qualities and a brain that will provide quality ideas which will result in the improvement of that organization.

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