In the business world, there are 4 aspects that dominate. These four aspects are FAME ( finance, accounting, management, economics ), which is also a popular department in various universities in the world. Even though the four of them sound similar, they are totally different.
Finance and accounting are the most popular subjects among the four aspects. Usually prospective students will be confused about which course they want to take because they assume finance and accounting as a whole are the same.
In this article we will discuss specifically the differences between finance and accounting from various aspects. Starting from the definition, context, to career opportunities. After understanding these differences, just determine which course is the most appropriate choice.
Definition of Finance and Accounting
Finance and accounting are not only confusing for prospective students, but also fresh graduates who will enter the workforce. Although in the same economic world, finance and accounting have different definitions and functions.
Finance talks about financial management and investment for individuals, corporations, and government. Professionals in finance usually have a career in investment banking , financial management services, financial planning and analysis.
The task of experts in the field of finance is to ensure that there are adequate funds (capital) in every situation that exists, also to ensure that the funds are allocated as optimal as possible. Finance experts must also be able to manage capital so that they can increase higher than the expected results.
In contrast to finance , accounting is anything related to recording, managing, and reporting the financial records of a company. The professionals in the field of accounting work for the individual, as part of the company’s staff. or in a public accounting firm and works for the benefit of certain parties.
Their main task is to be responsible for the accuracy of all financial transactions entered into the ledger, ensuring that the remaining balance is correct, as well as ensuring that the company’s financial statements are accurate.
Finance Functions and Duties
To be clearer, the difference between finance and accounting can be seen from the scope of their respective fields. Following are the functions and duties of professionals in the field of finance in general:
- Fundraising
Finance workers have a very important task in every institution or company, which is raising funds for operational activities. Starting from daily expenses, production costs, purchasing raw materials, hiring the right employees in the company, and so forth.
Companies will need large funds from many sources, and the task of finance workers is to find these sources. Whether it’s by way of debt to financial institutions or collecting funds from the public.
- Funds Distribution
No less important than fundraising is to distribute it properly. A finance expert must know how to manage money properly, so that companies or individuals can get maximum investment returns in the next few years. They also need to know how to make the most appropriate and profitable investment steps.
- Profit Management
Now consider a company that has found the right way to invest and make a lot of profits. Their latest products are sold out and the number of consumers is increasing. Then the question is, what do you want to gain?
This is an important function of finance workers . They must know how to manage profits properly rather the company is getting ahead. Will the profits be distributed to shareholders or reinvested in the business to improve company performance? Finance staff in the company must know which step is the most appropriate.
- Submitting Policy to Company Officials
The last function that is no less important is how to communicate the policies to be taken to the leadership of the company to be approved. Finance workers must master many important soft skills that can support their careers. For example, the ability to convince others because they have a lot to establish communication with the leadership of the company.
The task of finance experts is to convince leaders to make investments, share profits, and arrange capital budgets.
Accounting Functions and Duties
Now is the time to explore the functions and duties of accounting experts in an organization or company.
- Measuring the Contribution of Funding Sources
If finance is the source of ideas from which funds can be obtained, then the task of accounting is to measure how much each source contributes to the company’s profits. thus the company will get clarity, so they can decide whether to change or replace the allocation of funds or make a new agreement.
- Manage Company Liabilities
The company’s operations cannot be separated from liabilities, whether in the form of debt, tax bills, and so forth. Accounting staff in the company have an important role to ensure that all bills are paid on time, as well as ensuring that deadlines are not detrimental to the company.
- Determine Contract Fulfillment
The next accounting tasks and functions are related to contracts. A company must have many contracts that must be fulfilled. Be it with clients, customers or creditors. This is where the important role of accounting workers , namely ensuring whether the contracts have been fulfilled or not.
- Maintain Transparency
Accounting has the duty to provide information to the public and government about the company’s financial statements. Transparency is an important aspect in the business world, so accounting must be able to provide an accurate picture of the company’s financial position.
Basically, finance and accounting are different. But both are complementary and support each other. Finance and accounting are two fields that are independent and can stand on their own, but cannot function optimally without the help of each other.
