Accountants vs Financial Analysts: What’s the Difference?
Company finances are often complex, but Accountants and Financial Analysts are skilled to assist. Here’s some help understanding which of them you might need.
Company finances are often complex. Even startup firms must manage several revenue streams, a variety of personnel, invoices, budgets, and taxes. Accountants and Financial Analysts have the skill sets required to assist. Here’s some help understanding which of them you might need.
While business owners and executives may be skilled in many areas of business, managing finances frequently falls to a team of specialists. Handling legal regulations, bookkeeping, and investing choices requires special education, and Accountants and Financial Analysts have the know-how.
Both of these finance professionals are skilled at following, assessing, and comprehending complex financial environments. Although there is considerable overlap between them, they each have a separate aspect of money management in mind.
Accountants work in the present, regularly analysing a company’s financial data. However, Financial Analysts have an eye on the future, while analysing previous and present trends. Their paths cross often since accounting reports are used by Financial Analysts to offer suggestions on the most effective use of corporate resources.
Let’s take a look at what makes each one unique.
What an Accountant Does
Through systematic record-keeping, Accountants oversee and manage a company’s financial activities. Accountants are employed by businesses to assist in decision-making, evaluating financial performance, and determining budget expenses. In addition to creating documents for customers, Accountants also carry out tasks linked to tax filing and tax return preparation. Other duties include:
- Managing a company’s books of accounts to maintain track of cash flow
- Evaluating financial operations and spotting areas for improvement
- Ensuring documents follow regulations under the Generally Accepted Accounting Principles (GAAP)
What a Financial Analyst Does
Financial Analysts make sense of all the useful data your company collects. These experts are skilled at analysing companies, investment funds, startups, and other prospects to assess their likelihood of being lucrative. They look at economic trends to identify potential investment opportunities for businesses, organisations, and people. With the aid of data, Financial Analysts strive to protect their clients’ overall financial stability and weigh risks to make wise investment decisions. Additional duties include:
- Participating in meetings with company management to provide advice on crucial financial decisions and issues
- Creating financial reports that outline the company’s economic characteristics by comparing its prior and current performance to that of other companies
- Recommending future financial decisions by reviewing past financial performance, and examining financial accounts
While analytical thinking and mathematical skills are required for both jobs, the aptitudes and characteristics required for success vary. Accountants need to be adaptive, organised and focused on the details because the quality of their output reflects the quality of the organisation. Financial Analysts require exceptional problem-solving, research and decision-making abilities because they concentrate on historical transactions and ways to enhance firm finances.
So Whom Should You Hire?
Your hiring decision depends on your company’s needs, with both accountants and financial analysts having a strong role to play in the workforce. However, when considering the future of work and the impact of digital transformation, it’s crucial that you employ people with the right skills to ensure your organisation stays current with technological changes. This means a certain level of digital literacy is essential, along with the skills to handle big data analysis.
Financial Analysts have the necessary financial abilities and competencies for the future that businesses require. They transform abstract numbers—which are meaningless to the majority of people—into understandable information for a target audience. They also make recommendations in a way that non-finance professionals can understand and apply. Every business needs sound financial planning and forecasting to operate at its best, and Financial Analysts do this exceptionally well.
We’re Not Telling You What to Do But…
Financial reporting alone is no longer enough; analysis is now equally important for any business that wants to succeed in this modern, data-driven economy. To maximise your ROI, and discover business insights to help you make smarter decisions, hire a certified Financial Analyst from The ROOM. Our Analysts are highly motivated, tech-savvy, and certified through our training partner, the Corporate Finance Institute. Don’t miss out on the opportunity to tap into their skills and insights, enabling you to make better business decisions, reduce your costs, and gain visibility into your financial operations.
The ROOM is home to a highly specialised community of agile digital talent, connecting individuals and companies across the globe with the skills and resources they need to future-proof their teams and thrive in the new world of work.