Many compare the financial manager and financial accountant and often consider them to be the same. In fact, these professions are completely different. The financial activities of any enterprise can be divided into three main areas: accounting and taxes; management accounting and budgeting; financial analysis and financing of the enterprise. So, by definition, an accountant cannot coordinate three directions at once. He has a different education, different tasks and even a different type of thinking. And this in no case can not be blamed on the latter. Just a financial manager and an accountant are different people, different positions and different functions.
Try Two Careers Compare and Contrast essay writing help from experts!
The main difference between a financial accountant and a financial manager lies in their professional competence. An accountant is a specialist who deals with accounting, reports. Its main task is to timely and accurately calculate taxes in the state budget and monitor changes in legislation that are happening too often in our country. At this time, the financial manager is a specialist who deals with working capital management, planning of financial flows, and developing their strategies for the effective functioning of the enterprise. In addition, the financial manager follows the state of the company in the market, changes it and must respond in a timely manner to these changes, optimizing the situation. The financial manager provides the head manager with information about the current state of the organization and its arguments for planning and forecasting its future activities. The accountant does not have such information about the future operation of the enterprise.
From this it follows that the accountant and financial manager have a different base of numbers. The accountant works with the reports and current numbers of the company. That is, it means that the numbers are yesterday’s and today’s. Forecasting the future situation requires the further processing of these figures through special methods and approaches that are not within the competence of the financial accountant.
The financial manager deals with administrative documents and has information about the company’s activities every day, cash flows, production, sales, sales channels, strategic advancement of the organization and its value on the market for buyers. Of course, an accountant can take on such responsibilities and deal with future forecasting and planning. However, this is a very voluminous work. In addition to the responsibilities of accounting and reporting, the accountant will have to study this work, to obtain additional education in this regard. It will also include additional time and energy.
It follows that the accountant and financial manager have a different course of thinking. Manager for rational use of resources takes financial and investment decisions taking into account all possible risks. He evaluates all possible alternatives, and then leans only to one of them. He weighs all the pros and cons and finally makes a choice. The accountant is not engaged in the evaluation of alternatives, because it is not necessary for him. The main professional qualities of the accountant are pedantic and punctuality. This does not mean that the accountant is the worst specialist than the financial manager. This means that these professionals have different goals and objectives in the company, so they use different means to achieve them and a different course of action in the work that is natural.
Consider the differences between a financial manager and an accountant in detail. So, professional competence. The accountant is a specialist working under the accounting system in accordance with applicable law. Its tasks are to pay taxes and to pay to the state authorities, customers and partners of the company on time and correctly, monitor the status of the company’s account and reduce the balance to a single indicator. The financial manager, in turn, must manage the working capital, plan financial flows and budgets of the enterprise, develop financial strategies. At the same time, constantly analyzing the real economic condition of the enterprise, verifying it with the national and even international market situation, must make certain financial decisions in time to optimize the situation. In addition, the financial manager is required to provide the head of the company with reliable information about the current state of the enterprise, the forecast of its future state and an action plan for further development. An accountant cannot do this because he does not have the necessary information. Information competence can probably be identified as a separate point of difference between an accountant and a financial manager. Forecasting the future financial condition of a company based on such data requires additional processing by a special analysis technique, knowledge of which is not within the competence of the accountant.
The financial manager works with management accounting documents, i.e., has information about the value result of the daily activities of an enterprise, about cash flow, sales, production and procurement, about its financial condition in the context of certain types of business, about the strategic position of the enterprise in the market and, most importantly, the current value of the company for the founders and owners. These data form the basis of forecasts, budgets and strategies of the enterprise. And this information most of all interests the head of the company. A simple example: an accountant knows from a certain instruction that a company must pay a certain amount by a certain date – this is its main job, to know how much and when it should be transferred in order for an enterprise to have no problems with legislation. The financial manager, in turn, has information about the current state of the company, as well as about the company’s future plans, for example, to take a loan. On this basis, he may decide: does it make sense to pay the specified amount now, or there are options for extending the period to optimize the financial situation within the company. The latter, by the way, can also be attributed to the distinguishing feature of a financial director: he is familiar with commercial law and can offer alternative options for working with financial reporting services, if there is a need for it. Naturally, a person working as an accountant in an enterprise can take on the collection and analysis of management data as well.
For a rational and effective involvement of specialists, everyone has to deal with their business. It’s better to focus very highly on your specialization than to know everything at the same time. The accountant should be engaged in accounting and reporting, the financial manager – the global company in planning and forecasting, and the competence of the manager is to manage the company and own all information on it for further strategic use.
Consequently, the separation of functions is very important for entrepreneurship. It will help the position of the company on the market. Although an accountant and financial manager are related professionals, it is important to distinguish between these two posts for more efficient operation.
It is important to understand how to motivate the workers in the company. Often incentives for effective work are divided into financial incentives (monetary and non-monetary); social (change of social status or social role of the employee); personal incentives (changing the variables of the psychological characteristics of the employee’s personality, such as self-esteem, self-esteem, etc.). But stimulating factors can not be clearly attributed to a specific group.
The question of material stimulation of labor as the main form of human motivation for more effective results has been studied for a long time. The first attempts to increase productivity in organizations were based on the material encouragement and the search for an understanding of fair remuneration for employees. Any proposed theory of motivation, as one of the elements or motivational factors, contains material remuneration for labor.
Material incentives are considered as one of the most powerful incentives for effective work. But the incentive power of material incentives, according to experts, is particularly effective when the organization makes material payments for the quality and quantity of work performed, and not for the time spent at work. Material stimulation of labor consists in the formation and use of the system of material incentives for labor and the distribution of wages in accordance with the law of distribution by quantity and quality of labor. The system of material incentives – a system of various complementary motive, associated with a single process of creating a material interest in the implementation of work.
So, the following scheme of management of these areas can be called ideal: the chief accountant is involved in accounting and taxes. The financial manager assumes planning, accounting and control, and the financial director manages the assets of the entire enterprise based on the analysis of data provided by the accounting department and the manager. Often, companies do not distinguish the function of a financial manager – the financial director deals with two areas.
EffectivePapers.com is a professional essay writing service committed to writing non-plagiarized custom essays, research papers, dissertations, and other assignments of top quality. All academic papers are written from scratch by highly qualified essay writers. Just proceed with your order, and we will find the best academic writer for you!
References
Donohoe, A. (2018, June 30). The Difference Between Accountants and Financial Managers. Retrieved from https://work.chron.com/difference-between-accountants-financial-managers-11226.html
Hopper, T., Kirkham, L., Scapens, R. W., & Turley, S. (1992). Does financial accounting dominate management accounting—a research note. Management Accounting Research,3(4), 307-311. doi:10.1016/s1044-5005(92)70019-5
Huczynski, A. A., & Buchanan, D. A. (2013). Organizational behaviour. Harlow: Pearson Education Limited.
Motes, J. (2019, February 11). The Difference Between Accountants and Financial Managers. Retrieved from https://bizfluent.com/info-12012204-difference-between-accountants-financial-managers.html
Mullins, L. J. (2011). Essentials of organisational behaviour. Harlow, England: Financial Times Prentice Hall/Pearson.