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Defining the Relationship Between Accounting and Finance…Are they one in the same?

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Accounting and finance, finance and accounting – what’s the difference?  Many non-accounting professionals out there misperceive accounting and finance as the same thing.  In reality they have a close relationship, but are definitely NOT one in the same.

Accounting is traditionally defined as the bookkeeping for a business.  Accounting is the collection and organization of a business’s financial data.  Most accounting department file cabinets and computers are filled with files – receivables, payables, collections, contracts and invoices, etc.  Most businesses have long paper trails and gigabytes of computer records all storing how money is made and spent, how assets are obtained and used.

Sounds like that’s all about finances right?  Close, but not quite.  Actually, a business’ finances are just as important, but very different from the accounting.  When considering a business’ finances, you will review all of the accounting data to make monetary decisions affecting the business.  The accounting data may help you with financial planning, reviewing the performance of the business, and ensuring that the business is meeting the legal obligations, such as tax reporting.

Microsoft Dynamics® NAV will not only keep your accounting organized, but will also help you make important financial decisions.  In Microsoft Dynamics NAV, all of your accounting data is centrally stored so that you can collect financial, manufacturing, supply chain, sales, and other critical information from across the company.  Because it has a familiar look like other commonly used Microsoft software, employees from all departments can easily enter their data and access job-specific information quickly.  Management can then review the accounting data and create any number of reports that are useful for making important business decisions and making sure the business is in compliance with regulations.  Microsoft Dynamics NAV is very flexible, easy to use, and can be customized to meet the changing demands of a dynamic business.

Both accounting and finances are critically important to the success of any business, but they are not the same thing.  Accounting is knowledge and finances are what you do with that knowledge.  Accounting and business management software, such as Microsoft Dynamics NAV, can improve your accounting and business finances, which can improve your bottom line.

By Peter Elgar with Concentrix TSG, Microsoft Dynamics NAV Partner based out of the United Kingdom

Concentrix TSG provides a range of ‘best-in-breed’ ERP and CRM solutions and is devoted to ensuring our clients get the most out of their solutions.

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One question

  1. amellardeste says:

    Great article, I just given this onto a co-worker who was doing a little research on that. And he in fact purchased me lunch because I discovered it for him

    [Reply]

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