Are you trying to choose an undergraduate major or thinking about going back to school for a career change? If you have an analytic mind and enjoy working with numbers, you might want to consider a finance or accounting degree.
Finance and accounting are both math-focused careers that are integral to the success of all types of institutions. Finance and accounting degrees both afford great job security and job satisfaction. In fact, both professional areas are expected to see job growth of at least five percent over the next decade, according to the U.S. Bureau of Labor and Statistics. Those who work in finance and accounting can pursue diverse specialties in their fields, so there is plenty of opportunity for continued personal growth.
And while finance and accounting share these similarities, there are key differences between them.
Differences Between Finance and Accounting Degrees
Degrees in finance and accounting differ in substance and will give you different skill sets, so you can expect to go into very different career paths depending on the major you ultimately choose.
In very broad terms, finance has a wider focus than accounting. Accounting looks at the day-to-day processes, interpreting and reporting financial data for transactions that have already occurred. Finance, on the other hand, looks at data and trends to develop business strategies that will minimize risk and maximize financial returns.
Considerations Before Deciding on a Major
Choosing a major is a big decision. Ask yourself the following questions to determine if a finance degree or an accounting degree is a better choice for you.
What subjects do you enjoy studying?
The freshman and sophomore courses and prerequisites are about the same for finance and accounting majors. Students in both fields will need to show strong proficiency in mathematics and critical thinking. However, there is a difference in emphasis and coursework in the junior and senior years of college.
Finance students will need to strengthen their analytic skills. They will need to be especially strong in economics, variance analysis, and critical thinking in preparation for forecasting, analyzing trends, financial modeling, and financial planning. Students of finance will also need to have a solid understanding of statutory accounting principles (SAP). Many of the courses will focus on behavioral finance, venture capital, risk management, and market analysis.
Accounting students, on the other hand, will need to acquire more technical skills. Their profession of public accountants is built on the Generally Accepted Accounting Principles (GAAP). Becoming fluent in these principles will help future accountants conduct account reconciliation, maintenance of general ledgers, and month-end close processes, and balancing financial statements. Accounting students can also expect to study auditing, professional standards, and ethics of the profession, tax accounting, and information systems.
What kinds of problems do you enjoy solving?
Finance and accounting ask different kinds of questions and solve different types of problems. They don’t share exactly the same aim, but both contribute to the financial health of companies. Accounting deals with the day-to-day flow of money for transactions that have already occurred. Finance, on the other hand, deals with managing strategic decisions about the future use of money and assets.
If you enjoy working with the known, accounting might be better for you. If you enjoy deliberating on the unknown and assessing financial trends, you might enjoy finance.
What salary are you looking for?
Graduates of finance and accounting typically make very good salaries. There is some variance depending on the type of work you do and the kind of company you work for. An accountant working for a nonprofit or a finance person who specializes in fundraising will probably make less than those who pursue work in big companies and financial planning. In 2019, the median salary of accountants was $71,550 and $81,590 for financial analysts, according to the U.S. Bureau of Labor and Statistics.
Professional Opportunities After Graduation
Choosing an undergraduate degree in finance or accounting isn’t the only decision you need to make as you plan for your future. You will also want to decide what kind of professional credentials to obtain and if you want to pursue advanced degrees.
Finance professionals have numerous advanced degree options to boost their careers, including master degrees in finance, financial economics, and applied finance. Finance credentials can be earned at various points in one’s education. You have the option of obtaining licenses as a Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), Certified Treasury Professional (CTP), Certified Personal Risk Manager (CPRM), Certified Valuation Analyst (CVA) and the Certificate in Quantitative Finance (CQF).
Those pursuing advanced degrees in accounting can choose from master degrees in accounting or professional accounting. If you decide to go into accounting, you may want to obtain a license as a Certified Public Accountant (CPA) or Certified Management Accountant. This certification shows that you are qualified to conduct bookkeeping, auditing, and forensic accounting, and will make you an even more competitive prospect when applying for positions.
Choosing a degree is a big decision and an exciting one that will impact your future. Finance and accounting are both really fantastic professional opportunities! Now that you have more information about each career choice, you only need to decide which one will bring you the most satisfaction over time.