Accounting and financial management are critical for running a business.
There’s a significant risk you’ll lose control of your firm if you don’t keep a record of cash inflow and outflow. In other words, businesses that manage their income and spending have a better chance of growing.
For instance, you can easily have better access to financing options. But, that’s when accounting books and records get recorded. This helps businesses survive unforeseen financial downturns and meet legal requirements.
Further, as a career option, Accounting & Finance allows you to exercise your mathematical skills. Besides, you will apply technical knowledge to commercial problems.
Not sure how? Let’s know more about Accounting and Finance.
What is Accounting?
Accounting is documenting, maintaining, and reporting financial data for a business. Professional accountants work for:
- in-house at companies
- in a public accounting firm on behalf of other companies
These individuals ensure that all financial transactions get recorded on time. Specifically, they record the data in a general ledger. Likewise, they assure that the account balances are accurate and financial statements are fair.
Subscribers to r/Accounting (“a subreddit dedicated primarily for accountants and aspiring accountants to learn about and discuss their career choice”) experienced massive growth in the past 5 years from ~40k subs in 2017 to ~248k subs in 2021. That’s a 520% increase!! And it speaks a lot about the department.
What is Finance?
For finance professionals, a few of the job roles include:
- Investment banking
- Wealth management
- Financial Planning and Analysis
These professionals ensure enough capital for the company and optimal distribution of funds. Moreover, they add value by managing money. It helps in generating greater risk-adjusted returns than predicted.
Subscribers to r/Finance (“a subreddit dedicated to Financial news and views”) experienced massive growth in the past 5 years from ~85k subs in 2017 to ~507k subs in 2021. That’s a 496.471% increase!! And it speaks a lot about the department.
Importance of Accounting & Finance For a Business
Keep Financial Records:
Accounting records a company’s financial transactions. A company’s ledger is where accountants keep track of a company’s daily incomes and expenses. Besides, an accurate financial record may assist a firm in managing its financial future and understanding its cash flow.
Avoid Legal Complications:
Keeping proper financial records aids in compliance with essential corporate laws. For example, a little blunder may have a significant impact on your tax management. Poor financial records may result in an audit of your firm. Thus, you may land up with unnecessary legal problems.
Making a budget:
You can develop a budget using your financial records and analyzing your cash flow. Certainly, the budget is what keeps your firm on track. Also, a budget provides you with a current picture of your financial situation. This assists you in steering your company toward future growth.
When working with third parties, it is critical to provide financial information. For instance, transparent accounting is important for a bank loan or to attract investors. You need to have crystal clear financial management.
Significantly, it is simpler to showcase when you have good financial management. You can easily present financial statements to external stakeholders.
Financial reporting aids in communicating information among internal stakeholders. So, allowing your staff to know your financial situation is helpful. It enables a bonus structure to motivate productivity.
Why Study Accounting & Finance?
While studying Accounting & Finance, you’ll enjoy:
Excellent graduation programmes and opportunities:
Studying Accounting and Finance might lead to the possibility to work for a well-established firm. Contrarily, it can also offer an organized training program and obvious career development.
The ability to work in any field:
Every sector needs someone to manage their finance and accounts. And, that’s where you will join in.
Accounting as a Career Option
Accounting is constantly in demand since it is the backbone of any corporate organization. Indeed, every industry requires an accountant. Thus, it is regarded as one of the most prestigious professions in the world. Accountants are the practitioners and professionals of accounting.
Meanwhile, accounting jobs range in level from entry-level to executive. The demand for accountants is rising as a result of the diverse needs of various businesses. Consequently, eligible individuals can find work in the public, private, or non-profit sectors. Then, you can choose from multiple job titles, including accounts clerk, payroll clerk or clerk.
To begin a career in accounting, you must first get a bachelor’s degree in accounting. In that case, you can pursue accounting at the diploma, bachelor’s, master’s, and doctorate levels.
The job profile options in the accounting field are:
- Chief Financial Officer
- Certified Public Accountant
- Company Secretary
- Chartered Management Accountant
- Directors (Finance)
- Financial Advisors
- Financial Controllers
- Finance Managers
Finance as a Career Option
Finance plays a critical part in carrying out an economy’s development and expansion operations. However, you’ll require a bachelor’s degree. And, you will also need a solid understanding of financial management principles. Also, a background in economics, management, mathematics, accounting, and auditing is ideal.
You can also work for a few years before focusing on a specific area. Project work and internships are typically part of the curriculum in finance degrees. These resources might help you get a leg up on the competition by providing several chances for learning and networking.
Senior financial positions will need you to combine two factors. That includes your professional knowledge with technological competence and management abilities.
MBA (Finance) and MS (Finance) are two of the most popular programmes for those interested in this field. You can find many certifications who desire to maintain a high quality of practice in their professional lives. For instance:
- Financial Risk Manager (FRM),
- Certified Financial Planner (CFP)
- Chartered Public Accountant (CPA)
- Chartered Financial Analyst (CFA)
Clients and Employers
Individuals, companies (businesses), governments, and nonprofits are all accounting and finance specialist’s clients. But, there are significant disparities, when it comes to their employment. The common employers for each group are:
- Banks (retail, commercial, and investment)
- Insurance companies
- Operating companies (regular businesses)
- Public accounting firms (that audit big companies)
- Personal tax filing firm
- Operating companies (businesses)
Financial Statement Roles
Accountants create the financial statements, whereas finance professionals evaluate them.
Being an accountant may be a good fit for you if you prefer collecting and organizing a company’s financial information.
Finance may be the field for you if you enjoy studying and evaluating results. It is for you if you like analyzing how well a firm is functioning or how to improve the financial structure.
Accounting vs Finance: What to Choose?
Choosing what to pursue may get complicated. But, once you understand what an accountant does and the responsibilities of a Finance Manager, you can make a sound decision. Your ability and interest in a particular field are also essential in deciding your preference.
Money, business, and management are all topics covered in accounting and finance. Accounting involves collecting and organizing financial data for further use. In contrast, finance is only concerned with a company’s monetary funds.