What is finance? How finance is different from accounting? What are important basic points that should be learned to pursue a career in finance?
Answers
The management of large amounts of money, especially by governments or large companies is called finance .
Meaning : Accounting is an art of recording and reporting of the monetary transactions of a business.
Finance is the science of management of funds of a business
Branches : Accounting includes Financial Accounting, Management accounting, Cost accounting, Tax Accounting etc.
Finance includes Private Finance, Public Finance, Corporate Finance etc.
Career : Accounting professionals can become accountants, auditors, tax consultant, etc.
Finance professionals can become an investment banker, financial analyst, finance consultant, etc.
Division : Accounting is a part of finance.
Finance is not a part of accounting.
Objective : Aim of accounting is to provide information regarding the solvency status of the company to the readers of the financial statement.
Aim of finance is to study the capital market and funds of business for making future strategies.
Tools : Tools of accounting are Income Statement, Balance Sheet, Cash flow Statement etc.
Tools of finance are Risk Analysis, Capital Budgeting, Ratio Analysis, Leverage, Working Capital Management etc.
Baisc points to learn before pursuing career in finance
- Skills you will need to succeeded
Before you pursue a career in finance, it’s important to know what skills will help you thrive in your role. Spend some time reviewing the most important accounting skills so that you can get a better idea if this framework reflects your abilities or not.
- Job opportunities
It’s in your best interest to think about possible career paths before jumping into the world of finance. Research jobs in your area and salaries, so you have a better idea of what to expect after you earn your degree.
For example, some possibilities include:
Investment banking
Accounting
Corporate finance
Risk management
Management consulting
- The industry is continuously changing
Entering a career in finance means that you’re always going to need to keep up to speed with the latest industry updates, rules and regulations. You’ll most likely be required to complete continuing education so that you’re familiar with the latest changes happening in the finance world.
- Accuracy matters
you have to know what you’re doing and how to solve tough problems so that you’re not practicing unethical or illegal behaviors that are going to get you into trouble. This likely isn’t the type of job for you if you like to cut corners or are always looking for the quickest and easiest way to complete your work.