By Connor Doyle
Accounting, our Romeo, and Finance, our Juliet. Two houses, both alike in dignity, in fair New York City, where we lay our scene, from ancient bond break to new maturity, where credit balance makes cash on hand burst seams. Accounting and finance, though both safely under the business umbrella, are divergent in ideology. Finance wants to spend and raise money for the future of a business while accounting wants to keep track of all that has happened in the past. But, both often use information from one another in a give and take relationship.
You can also think of these fields as Accounting being the designated driver for Finance at the local bar – after a few drinks Finance wants to sing Bohemian Rhapsody at karaoke but Accounting has to remind her that Freddy Mercury is a little out of her range. That doesn’t mean that Accounting doesn’t want so see Finance go rock out – he just wants to see Finance do her best at any given time.
Accounting is often looked at as dealing with the past and present condition of a company. They record events that have taken place in order to present the financial health of a business during a given period. But, to pigeonhole accounting as a financial statement would be disingenuous. Accountants often have the most accurate information about a company at any given time and can be the singularly most important resource to the decision making process when looking towards the future.
Finance, on the other hand, is consistently looking forward. They ponder strategies the company wants to employ and figure out how the enterprise can pay for it. They project earnings, raise capital, and ensure the cash flowing into the business is enough to satisfy their needs for its future. But, finance can’t do the job alone. They look to accounting for information about the position the company is in and to see how their decisions will affect the financial health of the business. The financial statements created from accounting often aid finance in obtaining the funds the business will need to run things smoothly. As much as finance might want to forge a path through the financial jungle, they are irrevocably and inextricably (and if the author may editorialize - rightfully) tied to the accounting side of the business.
While accounting and finance often view the financial landscape form different vantage points they are still individuals on the same team. The financial locomotive can’t lumber forward without the accounting tracks to lead it, and the rails are meaningless without a train to guide. Finance will continue to raise money through bonds, investments, and funding rounds while accounting will continue to record and compile the information as it comes in. But at the end of the day the total business picture painted is greater than the sum of its parts. It is the confluence of the information which, in tandem, help a business thrive.
Connor Doyle is a Senior Auditor at Wiss & Company. If you would like to get in contact with him, you may reach him at 973.994.9400 or at firstname.lastname@example.org.