This time we will discuss the difference between Accounting or Accounting with Finance or Finance.
Basically, the difference between accounting and finance is something that someone who wants to enter the business world must know.
Given these differences, it is still often something that makes a person doubt. What’s more, these two things related to accounting and finance have important roles to support decision making in business.
Where accounting will provide some information and solutions related to all types of financial activities in a business.
In addition, accounting also provides information to various external parties to the company that have links so that these parties can assess the company’s performance in running its business.
So that it encourages accounting is very important for a business because accounting is able to provide information related to economic activities which will later be useful for the process of running a business.
In addition, accounting can control and control finances in business properly to help businesses achieve their goals.
From some of the information above, it can be said that accounting is related to finance. Then what is the difference between accounting and finance? Here’s the explanation:
Table of contents :
Differences in Accounting (Accounting) and Finance (Finance)
Accounting basically has a role to record and classify all transactions so that it will produce the financial reports needed by the company accurately and precisely.
Where this accounting has its own standards and rules for recording and classifying all transactions.
Furthermore, accounting will produce a financial report consisting of an income statement and a balance sheet.
Where the income statement will describe the results of doing business in a certain period of time. Meanwhile, the balance sheet will describe the financial position of an organization at a certain time.
Also Read: Understanding Financial Literacy
That way, the financial statements can help companies running a business to find out their financial results and position.
So that when the company experiences bad financial results and position, it will help to evaluate the company’s performance.
But if the results and financial position of the company can be said to be safe, it must also continue to oversee and improve the company’s performance.
This definition of accounting makes companies need someone to become an accountant in the business they run.
Where the accountant will play a role in managing all accounting functions in processing financial data and information to be more accurate and precise.
In addition, accountants can also assist in planning and controlling the company’s cash flow.
And plan and consolidate taxation across the company to ensure cost efficiency and compliance with tax regulations and more.
Meanwhile, finance is the activity and ability or authority in finding or receiving funds, managing and issuing money or making payments.
Where the process does not have standards and standard rules like in accounting.
Where in the financial process when looking for funds, it can be in the form of a loan or issuance of shares.
Furthermore, the funds will be managed for business capital, such as purchasing raw materials. Then, from the results of the management of these funds, it is expected that they will generate funds in the form of profits.
Of course, when a company is able to carry out financial processes well, it will encourage a more productive company performance.
Based on the differences in accounting and finance above, it can be concluded that accounting in companies that do business is more focused on financial activities. Meanwhile, finance is more focused on the company’s financial condition.
Where companies that do business in any field need to do financial management. Financial management is carried out on the standards and rules that exist in accounting.