Though they may seem similar, and sometimes they overlap, there are real differences between finance and accounting. Each offers students loads of challenges and long-term opportunities. They also both tend to pay quite well, especially for those who achieve a specialized license or certification.
If you love business and are intrigued by the prospect of working with money, you might want to pursue one of these fields for your career. However, make sure you research both carefully to determine exactly which route you'd like to take. You might want to be a pure finance professional who spends your time dealing with equities and assets or you might prefer pure tax accounting. Another option is to split the difference and pursue management accounting.
Keep reading this page to discover more about each field. If you haven't started back to school, or if you are in school and haven't yet declared a major, this is a great time to find a focus for your bachelor's degree and your future.
Accounting is a method of recording and analyzing the financial transactions of an individual, business, non-profit, or any other organization. These records are kept as a way to determine the overall financial health of an organization and for the purposes of reporting. Tax collectors, in particular, require accurate accounting statements from everyone in their purview.
Thus, an accountant is someone who collects their client's financial records and records them in a manner appropriate for sound business analysis or tax purposes. Certified Public Accountants are a special class of highly skilled, licensed professional accountants who are endowed with the right and responsibility of signing tax return documents.
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Finance refers to how businesses and individuals create, manage, and build their asset portfolios. Finance professionals work in one of three branches: corporate finance, public finance, and personal finance. Corporate finance professionals assess a business' finances to determine whether the organization requires investment, how to manage assets, where to invest funds, and to determine if and when the company should become involved in a merger or acquisition.
Public finance involves how government agencies accrue, allocate, and otherwise manage funds. These professionals might devise plans to fund government projects with taxes, bonds, or funds raised in a voter referendum. These professionals also might work with non-profits organizations, which likewise bear no tax burden.
Personal finance professionals help individuals build and manage their savings. They can consult with individuals on how to create a retirement fund, create trusts to defer taxes, and ensure that their estate transfers to future generations. Many personal finance professionals are licensed and can conduct trades in the equities markets, among others.
Depending on your state, you might be able to use a bachelor's degree in the pursuit of a CPA license. You will still need to pass all four parts of the CPA examination and complete a period of supervised work, but you should check with your state's board of accountancy for their specific educational requirements. There are also other possible avenues for someone with a bachelor’s in accounting.
With a four-year degree in accounting you could also work as a bookkeeper or apply your skills elsewhere in a business. For instance, many management positions require a certain level of accounting skill. You could also work in public accounting, forensic accounting, or many other fields. In fact, you could take and pass a single part of the CPA exam and pursue a career built solely on that.
Your bachelor's degree can also launch a brilliant career in finance. Many finance majors find positions working as analysts for corporate finance firms. Though those positions receive relatively low salaries compared to some in the industry, their bonus checks are often quite impressive. You could also find a position with a bank or other financial institution with a bachelor’s degree.
If you wish to work in personal finance, your bachelor's degree will take you far. You won't need any further education to sit for the Series 7 exam, which is formally known as the General Securities Representative Examination. Once you pass that exam and receive your license, you can conduct stock trades and deal in any securities product whatsoever.
The top accounting certification has always been that of Certified Public Accountant. CPAs pass the most difficult professional exam and then maintain that credential with ongoing education. Their primary function is usually handling tax filings for individuals or corporations. Thus, they bear a tremendous legal burden in their work. CPAs are all governed by their state boards of accountancy and are entrusted with such responsibilities as completing and signing off on tax filings.
Certified Management Accountants are also very highly esteemed in the accounting and business world. Their duties are less oriented toward taxation and compliance and more toward finance. CMAs might oversee payroll issues, investments, budgeting, and matters of financial stewardship for a corporation. CMAs who work for businesses outside of the financial industry still might take on more of a corporate finance role. They might conduct ongoing research to determine suitable acquisition candidates or work with corporate finance teams in the case of a merger or acquisition.
Other accounting certifications include, but are not limited to:
Once you graduate with a degree in business or finance, you will likely want to pursue a professional certification. Such credentials will give you special legal status and professional clout to conduct certain transactions or offer specific sorts of advice. The top finance certifications are probably that of Certified Financial Planner and Chartered Financial Analyst. Both examinations are very rigorous and also require that examinees have significant experience in the field.
CFPs work with families and individuals to create wealth portfolios that will endure through the generations. They are thus held to very high standard and clients can research their planners through the CFP board. If, for some reason, a professional has undergone a license revocation or other punitive measure, that will be recorded. CFAs, on the other hand, work with corporations and manage funds for institutions.
Other finance certifications include, but are not limited to:
Accounting is a challenging field that requires outstanding analytical and quantitative skills. It crosses into areas of tax law, finance, and business, among others. Because of this, it is also quite a broad field that allows a wide range of opportunity for those who have the chops to excel in accounting classes.
Since every type of organization deals with money and finances, they all need to work with accountants. Small businesses and individuals most often hire accountants on a contract basis, especially around tax time. However, there are many individuals and organizations who are required to file taxes on a quarterly basis, thus providing steady, year-round work for many accountants. Larger corporations hire accountants as full-time employees for ongoing work on budgeting, financial matters, and more.
Thus, accounting offers a lot of work and unlimited opportunities for those in the field. Accountants can achieve certifications and licenses that expand their practice, or which offer a professional focus that is in high demand. Though the field is not slated for outstanding growth, the demand for accountants tends to track with overall economic growth. After all, every sizable corporation has an accounting department, and individuals often need help at tax time.
Positions to consider with a bachelor's degree in accounting:
The field of finance is in high demand from both individuals and corporations alike. Wherever large sums of money are at stake, people want to make sure that they are protected and that their funds can grow or otherwise be put to good use. There are a wide range of career options for finance majors.
In the realm of financial planning, professionals can work to help individuals or families conduct tax planning. The finance professional might help them structure their assets with a variety of financial instruments such as trusts or retirement accounts. Financial planners might also help their clients buy and sell equities in the stock market or advise them as to the wisdom of investing in real estate or other hard assets.
Corporate finance offers a wide range of other opportunities. Professionals might delve into international finance, private equity funds, hedge funds, mergers and acquisitions, or a consultancy that helps organizations manage their finances with investments, proper budgeting, or mergers.
The demand for corporate and individual finance experts should continue to grow along with the economy. Even in down times, corporations still need assistance managing and maintaining their assets, as do families and individuals.
Positions to consider with a bachelor's degree in finance:
Place of Employment
In general, finance and accounting professionals work in very similar environments. That is, they tend to work in office buildings where they are required to obey certain standards for dress and appearance. By and large, these workers are employees of larger organizations, but it is possible for either to create work independent of an employer.
Accountants tend to land their first jobs with organizations that range from accounting firms to accounting departments within a larger corporate body. Still others might work for a very large accounting firm, such as one of the Big Four accounting firms. For those who earn a CPA license, it may be possible to open a private practice and build a business that reflects their specific goals and interests.
Finance majors can also work with large financial firms or as consultants to individuals and families who wish to structure their assets and build wealth. Others might delve into the corporate realm and work with large entities who need help structuring large corporate mergers or arranging international transactions. There are also those who serve as traders for large institutions and they spend their days placing buy and sell orders in the equities markets.
Both finance and accounting professionals work as consultants to small or large corporations. Often, they may work side by side and may even have IT professionals on their team, as well. In such cases, the accountants might provide auditing services to the client while the financial experts help the client structure their assets. The IT team might work on cybersecurity or help the client create databases or networks for their operations.
Thus, with either a finance or accounting bachelor's degree, graduates often find work with a larger consulting firm that can provide a much-needed infrastructure to support their consultants. This work often involves lots of travel, and consultants frequently spend the workweek in various locations only to arrive home late on Friday evening. However, they are also compensated well for their hard work and personal sacrifice.
Consultants often spend the first five or ten years of their careers working hard and traveling a lot. Once they have built up a significant level of experience and perhaps returned to school for an MBA or other graduate degree, they may find a traditional executive position. Others might decide to open their own consultancy practices. CPAs, for instance, often open a private practice and do very well managing the taxes of a few local businesses. Another option is to join a start-up firm and thus invest time and energy into something that could become much larger.