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