What is finance ? What is accounting ? And what are the differences between them? For those who want to know the basics of economics, this little guide to finance for beginners provides the keys to better understanding how to manage at a professional level and in the personal environment.
A recent report from the Bank of Spain shows that Spanish citizens would fail if finance were a subject. The data is as follows:
81% of Spaniards do not know three basic economic concepts : inflation, compound interest and risk diversification (ECF Financial Skills Survey).
That is why we have decided to create a small guide to finance for beginners with key ideas to better understand a key aspect at a personal level and at a business or corporate level.
The first question to be answered is clear: What is finance ? What exactly does this subject deal with? We are dealing with one of the branches of Economics that deals with managing and making the bahrain whatsapp data most of the capital, economic and monetary resources of an individual and/or a company, organization and state.
There are numerous professional profiles that are limited to this field:
Chief Financial Officer
Manager
Accountant
Financial advisor
Finance departments are key in any company, regardless of its size. Ultimately, the viability and continuity of a business (how well they perform) depends on them.
What is accounting?
Probably another of the essential subjects for both the general public and specifically for those who want to make a career in the world of economics and business management . What is accounting ? What is the function of this subject? We are faced with a concept that consists of recording and classifying the financial and accounting information of a company, in order to analyze, interpret and transmit to those responsible the situation of the business, so to speak.
The accounting department must record the income and expenses of a company, how much capital comes in and how much goes out, as well as the origin of the money and what it is invested in or where it is destined. In the following items we will address what expenses and income are to take this into account if you are going to dedicate yourself to finance and accounting .
The professional profiles linked to this department are the following:
Accounting Manager
Accountant
Accounting Assistant
Auditor
Differences between finance and accounting
As readers will have deduced, we are dealing with two closely related and complementary concepts. Never the same. There are several notable differences between finance and accounting:
Accounting is a very specific subject that deals with controlling what comes in and out of a company's cash register, monitoring economic capital .
Finance is a more global area that focuses on analyzing and contextualizing the economic health of the business and is key to addressing financial strategies and operations .
The differences between finance and accounting are notable, but in both cases we are certainly dealing with economic concepts , but with different purposes. The health of a company's accounts will depend on good accounting and financial management.
What are expenses and what types exist?
The idea of 'expenses' in a company is the same as that in relation to the daily life of any person. Basically, the answer to the question of what expenses are could be said by pointing out that they are the money that comes out of the cash register as a result of the daily operation of a business. In other words, how much money a company spends to achieve profitability.