As you evaluate your company’s financial needs, it can be stressful to determine where to invest your money. You can improve your company’s financial outlook in many ways, but hiring an accountant or a financial analyst can make a significant impact.
While similar in many respects, accounting and finance handle financial information in distinct ways. One is more forward-looking, while the other focuses on the present. If you’re interested in hiring for either of these roles, it may be beneficial to understand their similarities and differences.
At Fully Accountable, unique accounting needs are our specialty. With digital accountants, controllers, and strategic CFOs at the ready, we’re equipped to develop custom accounting solutions that fit your specific needs.
What is Finance?
Finance is a broad term that primarily refers to wealth management and investments. The finance department plays a significant role in every company, as finance generates money-making ideas and manages assets. While banks and hedge funds hire many finance professionals, companies and private individuals hire in-house finance departments as well.
Finance Professional’s Responsibilities
What a finance professional does daily depends on the job. A financial advisor, for example, works with private individuals and are responsible for the client’s financial management. In addition to building a client’s wealth through astute financial planning, financial advisors are the first line of defense when issues, such as debt and retirement planning, arise. An investment manager, on the other hand, offers advice on which stocks or other financial instruments to invest in.
On the corporate side, finance professionals may have job titles like financial analyst, finance manager, or investor relations analyst. These roles vary in responsibilities, but they all have one thing in common: big-picture thinking. Financial analysts plan for the future by looking through the company’s current finances and producing in-depth reports that can drive change.
What is Accounting?
Accounting deals with the recording and reporting of all finances, documenting it in real-time to offer companies or individuals an accurate depiction of their finances. The accounting department produces financial statements such as balance sheets and cash flow statements.
The accounting department also ensures that all financial matters are being done according to the law, including the tax code and local and federal guidelines.
A corporate accountant takes a more granular look at the finances, keeping track of and reporting all financial transactions to maintain an accurate record. The reports generated by accountants, such as balance sheets, give stakeholders a detailed look at where the company stands financially. This allows the CFO, or other higher-ups in the financial department, to make more informed decisions.
In addition to working in-house for small or large companies, accountants can also work for accounting firms that offer many of the services discussed above. Accountants at these firms may also operate as auditors, whose external view of a company’s finances may uncover errors or malfeasance.
Finally, accountants may work with individuals to help prepare and file taxes. Though the role of an accountant is much maligned as a “boring” job, there are a surprising number of opportunities for accountants, especially those who have taken it a step further by acquiring their Certified Public Accountant (CPA) license.
How are Finance and Accounting Different
Finance and accounting are involved in managing a company’s finances, though they each have a unique approach. Both accountants and financial analysts produce reports but whereas accountants record the present, financial analysts plan for the future. Each role is essential to the company’s financial success. For example, if you have concerns about how to generate more revenue for your company, consider hiring a financial analyst.
An analyst will objectively examine your finances, finding weak points and opportunities to create more revenue. Furthermore, financial analysts are keen students of the current economic climate, able to pinpoint new trends and lucrative investments that could propel your company to the next level. Financial analysts measure success based on how much revenue the company generates, whether through new initiatives or by tweaking older ideas. This involves leveraging financial reports into strategy.
Accountants do not need to generate revenue for the company, but their reports are invaluable since they inform the higher-ups, resulting in less risky investments. As your company grows and generates more revenue, keeping track of it will require an accountant. More importantly, accountants can ensure that all financial transactions and reports are being done above board.
At Fully Accountable, we can meet your unique financial needs. Whether you need a fractional or strategic CFO, a controller, or a bookkeeper, you can rest assured that our accountants will deliver results. From meeting compliance to creating future forecast reports, we can help you accomplish your ideal accounting infrastructure. To learn more about Fully Accountable and how our outsourced accounting services can transform your company, contact us today.