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Difference between Accounting & Financing

Number of times when students want to pursue further studies in finance. But getting a degree in financing or accounting is always confusing for them. Though, both the fields provide challenging, successful and rewarding career opportunities and in near future the fields will show the faster than average career growth

For many of us it is very easy to assume financing and accounting in similar ways. While closely related, both the disciplines have different functions and several key differences that has to be considered before taking into account. The potential and professional growth of an individual depends on the specialization in accounts or finance and the type of course.

Financing and accounting are two different functions that are lumped together. It is generally grouped because both financing and accounting deals with the administration of business assets. Both are two different for to manage the money of business. Accounting is a part of financing and finance has a vast scope than accounting.



Accounting is a technique of recording and reporting of financial transactions. Or we can say it is to create and manage the financial statements that records the day to day transactions of the business. It is a practice of preparing accounting records. These accounting records include preparation, measurement, analyzing and the interpretation of financial statements. Accounting is about to handle the concrete numbers. Budgets, audits, taxes and daily operations are the major tasks. Accounting ascertains the financial position and profitability of the business at the financial year end.

Tracking and reporting the financial transactions of the business is done by the Accounting Department. People in accounting are responsible to manage the cash-flow-statements, reporting earnings, tax payments, general ledger, collections, profit analyzing and of course the debt management. To know the financial transactions and the health of the business, the set rules and standards known as General Accepted Accounting Policies (GAAP) to research and prepare the reports. Functional jobs of accounting include Financial Reporting Accountant, Tax Accountants, Auditors, Bookkeepers, Controllers, Account Receivable Clerks and Account Payable Clerks. Typically, the CFO takes the reporting of complete Accounting Department.



Financing is the technique to plan the distribution of the business assets. It is the study of capital market and money and the management and control of assets and investments. Financing focuses on individual’s decisions, finance and other institutions. They want a security for their investment portfolios. Profiling, Project Risk Management and the management of the firm is actually a part of managerial finance. An organized information provided by the accounts department is used to run the company on a daily basis and make long term decision related to finance and budgeting. Financing is all focused to ensure that their should be sufficient cash flow in the business to achieve future goals of the business. Finance deals with Future so it has to deal with risk and uncertainty.

The financial department of the company is concerned with planning the distribution of the business assets. To improvise the value of the business the coordination of investments and debts backed investments is also included. Investors invest in business to gain financial rewards and the financial planners plan for their exit strategy. The Chief Financial Officer (CFO) is the one who plans for the financial goals and the objectives of the business. Financial Analysis, Financial Management, Budgeting, Purchasing and Accounting is supported by the focused staff. Financial managers’ responsibility is to anticipate, evaluate and manage these risks and uncertainties. Being a part of economics financing is concerned with resource allocation and management.


The conclusion is that Financing is about planning of future financial transactions and Accounting is about reporting past financial transactions. Both have separate functions and requite the specialized skill set. Both revolve around asset management, so both are grouped together more often but not always.

In short we can understand between Accounting and Financing in a much better way with the comparison chart below:

Financing & Accounting Chart



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