Finance vs. accounting: which should you choose?

What’s the difference between finance and accounting?

One of the first questions you’ll probably ask as you start to weigh up finance vs. accounting as a career is, ‘What’s the difference?’ Undoubtedly, there is much overlap between the subjects and the roles available in both areas.

Generally speaking, professionals working in finance are more focused on what’s to come. Investment bankers, financial managers, and advisors strategize for the economic future on behalf of their clients. They plan for the road ahead, making informed projections and investment decisions. The most common employers in finance are banks, insurance companies, and research companies. Finance roles include:

• Asset/investment/portfolio manager

• Certified Financial Planner (CFP)

• Financial advisor/coach/consultant

• Financial analyst

• Financial manager (corporate, personal, behavioral, etc.)

• Financial planner

• Financial trader

• Investment banker

Accountants, on the other hand, consider financial situations as and after they occur. They track and report transactions, keeping financial records in-house or for other people and businesses paying for their services. According to statistics, there were over 1.3 million accountants and auditors working in the US in 2021.

The most common employers of accountants are businesses, public accounting firms, and personal tax filing firms. Job roles and specialisms available in the accounting industry include:

• Auditor

• Accounts payable specialist

• Bookkeeper

• Budget analysis specialist

• Certified Public Accountant (CPA)

• Corporate accountant

• Forensic accountant

• Tax accountant

Finance vs. accounting: which is harder?

On top of the differences outlined above, it’s worth also considering which major you will be better suited to. Will you find finance harder than accounting, or vice versa?

Accounting majors can be more technical and detail-focused than finance majors, preparing you for a career in accountancy. As an accountant, you must calculate, measure, and work with data daily. If detailed, small-scale work of this kind isn’t one of your strengths, you may be better finding your niche as a financial advisor.

Meanwhile, finance degrees require students to demonstrate big-picture creative thinking and will often focus more extensively on client relationship management. If these aspects aren’t your strengths, you might thrive as an accounting professional instead.

Finance and accounting degrees fall under the umbrella of ‘business majors.’ Data from the National Association of Colleges and Employers (NACE) shows that demand for these degrees is rising, and both have strong starting median incomes – $53,444 for accounting majors and $61,456 for finance majors.

Forgetting other students, salary differences, and statistics, the best determiner of which subject will be easier for you is your own passion, interest level, and skillset. It’s hard to excel in a career if it doesn’t interest you. It all comes down to which major do you think you will enjoy more.

Which subject is more math-heavy, finance or accounting?

Most roles in finance and accounting will require some level of math. Though some find accounting a more challenging degree than finance as it’s more technical, it isn’t necessarily more mathematical. Accountants will do a fair amount of general arithmetic in their day-to-day work, so they’ll need some math skills alongside skills like problem-solving, organization, communication, and attention to detail.

Financial advisors and managers may be required to use more complex mathematical methods, including algebra, calculus, derivatives, and functions. This will be especially true if you choose to take on a role after graduation that focuses on financial mathematics and modeling.

One important thing worth noting is that, even if math has never been your favorite subject, you may still find you can thrive studying either of these majors. Many money management roles in 2023 don’t include complex math and often rely on software that does most of the hard work for you, allowing you to place your focus elsewhere.

Is finance more client-focused than accounting?

The answer to this question depends significantly on the exact job you end up in. Still, generally speaking, professionals in the finance industry spend more time with their clients (and more time researching investments on behalf of their clients) than accountants do.

Either career will likely see you working in a client-facing capacity at least some of the time, and this is something you should expect and adequately prepare for. Whether you choose to major in finance or accounting, your professors will pass on valuable soft skills as they teach you the specifics of the course. As you learn to budget or get familiar with complex software, you’ll also develop skills such as:

•  Communication

• Persuasiveness

• Time management

• Leadership

• Ability to build good client relationships

Which pays a better salary, finance or accounting?

As cited previously, NACE data shows that the starting median income for a finance degree is around $8,000 higher than for an accounting degree. Regarding earning potential, finance tends to have a higher ceiling, especially for wealth, asset, and investment managers.

Salary is one of many deciding factors. It’s also important to note, according the Bureau of Labor Statistics, both industries are predicted to enjoy 7 percent growth from 2021 to 2031, with more job roles are available every year.

Strong earning potential is on the table in both finance and accountancy, and the salary you can expect to attain is very much dependent on how you’d like to specialize. Here are some median salaries for different job roles from both fields to give you a better sense of the range:

• Accountants and auditors – $77,250

• Financial analysts – $95,570

• Personal financial advisors – $94,170

• Tax examiners and collectors/Revenue Agents – $56,780

Comparative to other majors outside of business and finance, the salary anticipated for graduates in either area is high, and job prospects are strong. So, in the end, the choice is in your hands.