| When talking about the best business accounting | | | | first difference relates to the treatment of funds |
| software, you must first know the relationship | | | | while the second relates to decision making. The |
| between finance and accounting. Conceptually | | | | viewpoint of accounting relating to the funds of |
| speaking, they are closely related to the extent | | | | the firm is different from that of finance. The |
| that accounting is an important input in financial | | | | measurement of funds (income and expenses) in |
| decision making and there are key differences in | | | | accounting is based on the accrual system. For |
| viewpoints between them. Accounting is a | | | | instance, revenue is recognized at the point of |
| necessary input into finance. That is, accounting is | | | | sale and not when collected. Similarly, expenses |
| a sub-function of finance.Accounting generates | | | | are recognized when they are incurred rather |
| information or data relating to the operations or | | | | than when actually paid. The accrual-based |
| activities of the firm. The end-product of | | | | accounting data do not reflect fully the financial |
| accounting constitutes financial statements such | | | | circumstances of the firm. The viewpoint of |
| as the balance sheet, the income statement | | | | finance relating to the treatment of funds is |
| (profit and loss account) and the statement of | | | | based on cashflows. The revenues are recognized |
| changes in financial position (sources and uses of | | | | only when actually received in cash (i.e. cash |
| funds statement). The information contained in | | | | inflow) and expenses are recognized on actual |
| these statements and reports assists financial | | | | payment (i.e. cash outflow).Finance and accounting |
| managers in assessing the past performance and | | | | also differ in respect to their purposes. The |
| future directions of the firm and in meeting | | | | purpose of accounting is collection and |
| certain legal obligations, such as payment of taxes | | | | presentation of financial data. It provides |
| and so on. Thus, accounting and finance are | | | | consistently developed and easily interpreted data |
| functionally closely related.But there are key | | | | on the past, present and future operations of the |
| differences between finance and accounting. The | | | | firm. |