When it comes to financial management vs accounting, there are some key differences you need to understand before pursuing one or the other. These careers have different focuses and activities, all related to helping companies achieve their financial goals.
But how do you decide between financial management and accounting? What factors do you need to consider?
This article discusses accounting and financial management in depth and explores the main differences between the two. We also give you options for different financial courses based on your interests and goals.
What are accounting and financial management?
Accounting focuses on recording, summarising, and interpreting financial information. It’s an essential part of any business to help them understand their financial position and to make better decisions. Some key aspects of accounting include the following:
- Recording financial transactions
- Classifying transactions
- Summarising financial information
- Interpreting financial data
- Maintaining accounting standards and complying with tax laws
- Budgeting and planning
Financial management involves planning and controlling economic activities in a business. It involves managing a company’s financial resources to help achieve goals and reach maximum profits. Some critical aspects of financial management include the following:
- Financial planning
- Investment management
- Capital structure management
- Working capital management
- Financial analysis and reporting
- Risk management
- Dividend policy and shareholder relations
- Cost control
- Compliance with reporting standards and ethical practices
Financial management vs accounting key differences
There is no clear answer if you’re wondering whether accounting or financial management is the better career choice. Ultimately, it depends on your career goals. Here are a few key differences between accounting and financial management to help you decide which is best.
Scope and focus
While accounting primarily focuses on recording, summarising, and reporting financial data, financial management focuses on using financial resources most effectively to achieve organisational goals.
Key activities
Accounting includes maintaining financial records, preparing income statements, and ensuring the company complies with rules and regulations.
On the other hand, financial management includes financial planning, investment management, risk management, and making decisions regarding where to spend money.
Decision-making
Accounting doesn’t involve making business decisions. Instead, it informs decisions by providing data and information. Financial management uses the information provided to make strategic financial decisions.
Course duration
Both accounting and financial management degrees take around three years to complete. You can also choose to study for a higher certificate or diploma, which can take anywhere from one to three years to complete — depending on whether you study online or full-time.
What is the relationship between financial management and accounting?
Financial management and accounting work closely together. As seen above, financial management relies on accounting to provide information to make informed decisions.
Similarly, accounting requires financial management to use their data to allocate resources and help achieve organisational goals. Together, they help companies operate efficiently and maintain laws and regulations.
Benefits of studying accounting or financial management
Going into the financial industry offers many benefits. These include but are not limited to the following:
- Many career opportunities: Both accounting and financial management are high-in-demand fields with various career paths. Graduates can fill roles such as Accountant, Auditor, Financial Analyst, Financial Controller, Financial Manager, and more. Gauteng, Western Cape, and Kwazulu-Natal are especially fruitful for financial professionals, providing over 2.1 million financial jobs combined.
- Adaptability: The skills you learn when studying accounting and financial management are transferable across many industries, meaning you can work in different sectors, such as corporate finances and public accounting.
- Career advancement: A qualification in accounting or finances can give you a competitive advantage over other workers, opening the door to potential career advancement opportunities later on.
- Compliance and ethical practices: Understanding accounting and financial management standards will help you ensure compliance and ethical financial reporting for your company, keeping them out of trouble with the law.
- Problem-solving skills: During your studies, you will gain problem-solving and critical thinking skills, meaning you will be able to analyse data and make decisions to benefit the company. This is a desirable skill for employers and will increase your marketability.
- High salaries: Financial employees are generally paid well. Depending on your exact role and level of seniority, you can earn anywhere from R22,000 to R60,000 per month.
- Understanding business operations: Accounting and financial management courses often include business modules. This means you will understand how organisations function, including operations, financial health, profitability, and efficiency. This will help you make more informed decisions that could benefit the entire business.
Accounting and financial management courses in South Africa
There are many accounting and financial management courses available in South Africa. You can choose to pursue a higher certificate, diploma, or degree. Examples of these courses include:
- Higher Certificate in Accounting
- Higher Certificate in Islamic Finance — Banking and Law
- Bachelor of Commerce in Accounting
- Diploma in Financial Management
- Advanced Diploma in Financial Management
If you’re interested, some institutions offer programmes that cover accounting and financial management. For example, REGENT’s Bachelor of Commerce in Accounting teaches you skills and knowledge to perform both accounting and management tasks.
Study accounting and financial management with REGENT
Now that you understand the differences between accounting and financial management and the benefits both careers offer, you can decide which programme to pursue.
You can study for a Higher Certificate in Accounting, a Diploma in Financial Management, or a BCom in Accounting, which combines accounting and management. When deciding, remember to consider the time commitment and your career goals.