Difference Between Accounting and Financial Management
People often mix the contents of accounting and financial management as they consider them same courses with different names. If you think that both of these subjects are overlapping then you are wrong and you need to straighten your concepts. There is a considerable difference between accounting and financial management, thus it is of utmost importance that one should never mix both of these subjects. Not to mention that the difference between the goals and objectives of both of these is considerable and one should be able to separate between them clearly.
Instructions
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The prime task of accounting is to report the financial information of an individual or a company. Accounting mainly focuses on balance sheet, income statement and cash flow statement. Note that the balance sheet discusses the assets, liabilities and owner’s equity and includes the details of all these subject matters. On the other hand, income statement gives an overview of the company’s profit and loss statement while the cash flow statement provides an overview of the cash flows that are experienced by an individual or corporation. Note that the financial accounting has nothing to do with the forecasting of the financial information and is majorly restricted to reporting.
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The core task of the financial management is to cover all aspects of the business that are related to assets, resources and finances interlinked with the business. In addition, it also takes into account the forecasting techniques and performs the responsibilities of control, planning and decision making. Not to mention that the key task of financial management is to ensure the usage of financial resources in the best and efficient manner. It also forecasts the financial needs of the business and the ways by which a business can effectively use its resources.
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Financial management is the new and extended branch of accounting that focuses on the business application and analysis of accounting data. For example, with the help of accounting data, the financial management tends to perform the analysis of business operations and check its suitability. For example, an individual can perform the ratio analysis of a corporation and confirm its feasibility and viability for a future project. With the help of financial management, a person is not only able to plan but he can also formulate strategies to ensure proper implementation of the plan. It also helps in checking the availability of funds for future projects.
