In the business world, both accountants and financial analysts play a significant role. Even those who want to pursue a career in finance, for them, both these career options are great to pursue. Though both of these work with financial reports and help organisations in making sound decisions, they focus on distinct areas of money management.
Continue reading to learn more aboutfinancial analyst vs accountantand analyse which one is better suited for your career.
What Does a Financial Analyst Do?
Businesses and individuals usually hire financial analysts to examine and discern economic trends in the market so they can ascertain where to invest. They use these various data trends to support and analyse any recommendations they counsel their clients on.
While working in the investment industry, a financial analyst analyses the finances of the company and based on that, constructs different models that predict the impact of its asset management, personal investment, leveraged borrowings, mergers, acquisitions, etc.
Here are some other job responsibilities of a financial analyst:
- Evaluate financial documents and then, depending upon the business objectives and current market trends, determine whether making an investment is worth it or not.
- Create financial reports that describe the economic condition of the company and compare it against its past performance and its competitors.
What Does an Accountant Do?
source: marketbusinessnews
Betweena financial analyst and an accountant, the latter is a financial professional who takes care of the daily financial operations in an organisation or business. They are responsible for discussing with clients any recommendations regarding financial decisions and for preparing tax documentation. Also, they help maintain the investments and money in order for the businesses as well as individuals.
Often they maintain financial spreadsheets for tracking their client’s payments, investments, loans, and invoices. They also possess a good understanding of tax laws and codes, thus assisting in keeping all documents within legal regulations and ensuring clients adhere to them.
Difference Between Financial Analyst and Accountant
Though both these roles deal with financial information, there is a lot ofdifference between a financial analyst and an accountant, in terms of skills, job responsibilities, etc.
| Parameters | Financial Analyst | Accountant |
| Area of Focus | They primarily focus on past transactions and based on that tries to improve the finances of the company. | They focus on examining various data and reviewing financial statements. |
| Responsibility for the work | Financial analysts help in predicting the future performance and pursuits of the business. It examines the overall picture of the business by establishing future profit plans and exploring various investment opportunities. | Accountants focus more on daily operations and are more concerned with the preparation, audit, and accuracy of financial statements. |
| Skills Required | They should have analytical thinking, mathematical skills, and strong research, leadership, and decision-making skills. | Apart from mathematical skills and analytical thinking, they should be organised, detail-oriented, adaptable, and great communicators. |
| Certification Course | The dominant course for becoming a financial analyst is CFA, i.e. Chartered Financial Analysts; but its’ not mandatory. | The dominant course for becoming an accountant is CPA, i.e. Chartered Public Accountants, but its’ not mandatory. |
| Salary | Usually, a financial analyst makes more money than an accountant. The average salary for a financial analyst is Rs. 4 lakhs per annum. | The average salary for an accountant is Rs. 2.75 lakhs per annum. |
| Workplace | They usually work for large corporations and firms in cubicle-like settings or probably their own offices. | They work for a variety of businesses, starting from large corporations to law firms and individuals in office environments. |
| Tax Preparation | They typically don’t participate in tax preparation but may examine tax forms as a part of their investment or business analysis. | Their primary work is tax documentation and preparation. They know how to find out all applicable tax benefits. |
Which One Is Better: Financial Analyst or Accountant?
Both accountants and financial analysts act as cornerstones for businesses and both of them perform an important task for the organisation. As a profession, both these options are excellent, viable, and stable career options. If you are interested in analysing financial markets holistically and always focusing on the big picture, then a financial analyst will be the most viable option for you.
However, if you are interested in making yourself familiar with different traits and characteristics of tax preparation and documentation, then an accountant will be the most suitable option for you to go with.
Thus, bothfinancial analyst vs accountantcareers appeals to more or less similar dealing with data, you can choose the one per your interest and skills.
FAQs About Financial Analyst and Accountants
Does a financial analyst need accounting?
Most financial analysts have a bachelor’s or master’s degree in a business-related field. One of their most common specializations is finance. Though there are some analysts that recommend starting with a degree in accounting, as it lays down a stronger foundation for analysing financial statements.
Do accountants make more money than financial analysts?
No, financial analysts make more money than accountants and they have typically higher salary status.
What is the difference between an accounting analyst and a financial analyst?
Accounting analysts usually analyse and report the financial data of a company on a day-to-day basis, while a financial analyst is responsible for reviewing specific financial decisions.
