I have two very basic questions. Please advise.
1. I have seen a couple of people who work as a “Principal” in financial organizations. What does this designation mean?
2. What is the difference between “finance” and “
Two very basic questions
Answers
Two excellent questions both with many answers.
It depends. On industry, size, personal preference.
One possible answer for finance/accounting is
Principal could be owner, lead or a title given to a minor owner.
Again, open for discussion and alternative viewpoints
My experience, which isn't as much as others on this site, is that Accounting is responsible for the recording of what's occurred, as Wayne comments. Accounting is also responsible for the presentation of the financial statements thus focusing on what's already happened. Whereas finance is more forward looking. Finance will look backwards to historical data in order to report what it thinks is going to happen in the future. Finance will set up deals and look for deals for the company to get involved in.
If the company is small enough the same person who's responsible for accounting will have traditional finance work to do also. There may not be a clear delineation between the two
Anon
I wrote this blog a while back
https://www.proformative.com/blogs/len-green/2013/09/24/
I would expand the definition of Accounting into
-Financial Accounting: basically the role of the
-Management Accounting: in the USA often called FP&A; forecasting and analysis of the financial aspects of the business (helping business colleagues with costing, pricing, business cases/modeling, budgeting, management reporting)
Then Finance deals with: capital structures and company financing, M&A deals,
Hope this helps