Finance & Accounting are two separate entities we must look at individually. Why’s that, you ask? Well, there’s a significant difference between the two. Finance is a broad term and concerns itself with the management of assets, liabilities and the planning of future growth. Whereas accounting focuses on the day-to-day flow of money in and out of a company or institution.
Accounting is the act of systematically recording a business's financial transactions, as well as summarising, analysing and reporting said transactions to regulators and tax collection entities! The accounting side of a business will summarise a company’s financial position and cash flow over a particular period.
It is one of the absolute key functions of any business and can be handled by a bookkeeper or a fully qualified accountant. A sizable finance department with dozens of employees will handle the accounting duties at much larger companies.
Finance, on the other hand, is the study and system of money, investments, and other financial instruments. It is broken down into personal, public and corporate finance.
This area of finance involves an individual's or family’s current financial position. It is a very personal activity that depends heavily on earnings, living requirements and desires. Matters of personal finance could include but are not limited to credit cards, home or health insurance and mortgages.
This type of finance involves the government helping to prevent market failure by overseeing the distribution of money and resources. Fundings for these programmes are often secured predominantly through taxation.
Businesses can acquire financing through a lot of different means, ranging from credit increase or equity investments. A company could take out a loan from a bank or arrange for a particular line of credit. Managing debt responsibly and carefully can help a business expand and become more profitable.
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