Accounting and Finance Management: Definition and Difference

By Indeed Editorial Team

Updated January 22, 2023

Published May 9, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you have an entrepreneurial mindset and intend to help a business manage its finances, consider a career in accounting or financial management. These fields have similarities, but there are key differences that differentiate them. Learning the differences between accounting and financial management can help you make grow your career choice as an accounting manager or financial manager. In this article, we discuss the definitions of financial and accounting management, highlight the roles of accounting and financial managers, and explain key differences between them.

What is accounting and finance management?

Accounting and finance management are different concepts, with a few similarities. Here are the definitions of the two fields to help you understand each better:

What is accounting management?

Accounting management may refer to the practice of overseeing the day-to-day activities of the accounting department. Such activities include analyzing financial transactions and records, tracking financial information, auditing, formulating and implementing policies, and procedures for accounting. There major categories of accounting include:

  • Financial accounting: Deals with preparing financial statements to report information to external users, like government agencies, creditors, banks, and investors. The financial statements such as income statements and the balance sheet show a company's financial position within a specific period.

  • Management accounting: It involves providing financial information to internal users, such as employees and management. Management accounting focuses on future activities that affect its day-to-day operations and objectives.

  • Cost accounting: It's accounting that deals with cost analysis. Cost accounting elaborates the cost of various functions, products, and operations of a company.

What is financial management?

Financial management may refer to the practice of overseeing the financial structures of a company to improve its financial health. It helps the management of a company to make better decisions. The key elements of financial management include:

  • Budgeting, planning, and forecasting: Financial management involves managing a company's requirements, creating a budget and plan, and forecasting the outcome the company expects.

  • Financial reporting: Financial reporting is crucial to financial management because it helps with decision-making.

  • Financial decisions: Financial management involves making various financial decisions, including options, investments, and dividends.

  • Financial control: Financial management ensures the company gets its funding from proper sources. It also ensures there is a proper use of financial resources.

Related: Finance vs. Accounting: Understanding the Differences

Roles and responsibilities of accounting and finance managers

Here are the definitions and responsibilities of accounting and finance managers:

Who is an accounting manager?

An accounting manager is a professional who is responsible for overseeing accounting functions and ensuring timely and accurate reporting. They are to hire and manage members of the accounting team. Other key responsibilities of an accounting manager include:

  • Delegate tasks to the accounting team, depending on each member's skills, expertise, and interest

  • Hire, train, and advise of members of the accounting team

  • Evaluate the company's financial data and create reports for stakeholders such as lenders, vendors, and the executive team

  • Make sure that all financial records are accurate and complete

  • Lead collaborations with other departments to develop strategies and budgets to maintain the company's financial stability

  • Keep up with the latest updates in the accounting and financial industry

Who is a financial manager?

A finance manager is a professional who's responsible for the financial health of an organization. They oversee all the company's financial activities and investment decisions. Some of a finance manager's key responsibilities include:

  • Create and implement budgeting, forecasting, and reporting plans

  • Review the company's short-term and long-term goals to make an informed budget for funds

  • Create strategies to get funding from financial institutions like banks

  • Research and invest in assets that generate maximum revenue

  • Offer analysis and suggestions to improve a company's financial performance

  • Analyze and calculate the potential risks of the company's financial activities

  • Monitor different financial and business metrics to such as financial reports and key performance indicators (KPI)

  • Write and submit financial reports periodically

  • Conduct periodic financial forecasts

Differences between accounting and finance management

Accounting and finance management are practices that relate directly to a company's financial operations. The key differences between accounting and financial management include:

Responsibilities and objectives

Financial management deals with the company's entire financial strategy. The financial management team builds financial plans and monitors how they execute them. Financial managers also review the work of the accounting team to ensure they follow the financial plan correctly. Accounting management measures a company's financial status. The accounting managers also update themselves frequently on government regulations to observe legal and financial protocols. Financial management's major aim is for funding and profit or wealth maximization. The major aim of accounting management is reporting financial information.

Education requirements

The education requirements of accounting and financial management also differ. If you want to pursue a career in accounting management, you require a minimum of a bachelor's degree in accounting or a related field. You can advance your role in accounting management to get high-level responsibilities if you have a master's degree. Some employers usually require a master's degree in business administration and business management for accounting management jobs.

A master's degree is usually necessary when applying for most financial management jobs. Employers choose to hire financial managers with master's degrees because they have better qualifications to handle high-level responsibilities and collaborate with other managers and executives. Some employers hire financial managers with a bachelor's degree in finance, economics, accounting, or another related field.

Related: 12 Jobs You Can Get With a Degree in Finance

Job outlook and salary

An accounting manager's national average base salary is $52,744 per year. A financial manager's national average base salary is $89,473 per year. Finance managers earn significantly more than accounting managers because they handle high-level decisions and tasks. Their decisions can affect the overall financial status and performance of the company. The exact salary of an accounting manager or financial manager also depends on the location, type, and size of the organization for which they are working.

Level of seniority

There can be a difference in seniority between financial and accounting management. The financial management practice has more seniority than the accounting management role. Accounting managers are in charge of the entire accounting department. They hire accounting employees, train them, guide them, and assess their performance. Accounting managers work closely with the accounting team to ensure the daily operations run smoothly. They have little contribution to the executive decisions of the entire company.

Financial managers often have high-level responsibilities within the company. They create financial plans for the entire company. Financial managers also collaborate with several department heads to implement the company's financial plans. Accounting managers usually work with the accounting department only. Financial managers also advise the company's executives on crucial financial decisions that affect the company's financial stability. They also monitor the budgets of every department in the company to regulate their spending limits.

Measurement of funds

Accounting and financial management can also differ in how the two departments measure funds. The accounting team measures the company's funds on an accrual basis. An accrual basis is an accounting approach that involves recording transactions for the revenue a company receives and expenses it incurs. It matches the revenue and expenses to measure the impact of a business transaction or transactions within a specific period. The accrual method requires an accountant to use allowances for bad debts, sales returns, and obsolete inventory.

Financial management measures a company's financial assets on a cash flow basis. A cash flow basis is an accounting method that acknowledges revenues and expenses when the company receives or spends cash.

Time frame and time focus

Financial and accounting management have different time frames for carrying out their major objectives. Accounting managers have a quarterly, half-yearly, and yearly reporting time frame. Financial management activities usually take place in real-time. Financial management is more of an ongoing process, while accounting management is a periodic process. The two concepts also differ in terms of their time focus. Accounting management focuses more on past activities. Financial management focuses more on current and future events. It's an ongoing practice.

Types of reports

The reports associated with financial and accounting management are different. Reports in the financial management department use detailed reports to advise the company on their future course of action. Accounting management reports give details and summaries of the company's past activities as financial statements.


Financial and accounting management also differ in terms of the purpose of each department or concept. The purpose of accounting management in a company is to collect financial data from a company's activities and present it meaningfully. Both departments have different purposes, but their purposes have a connection. Financial management uses the data from the accounting department to make financial decisions that affect the entire company.

Users of data

There is a difference between the users of financial and accounting data. Accounting management reports provide financial information to both internal and external users. Examples of internal users of accounting information include the business owner, management, employees, and unions. External users of accounting information include creditors, stakeholders, and legal regulators. The data users from financial management reports are internal forecasts, as the management and employees. Financial management data is only suitable for internal use because it helps with financial planning and decision-making.

Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organization and a candidate's experience, academic background, and location.

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