If you work in private enterprise, your company measures its success at the end of the year by comparing how much money it made to how much it spent. If it has made more than it has spent, it was a good year. If it has made less than it has spent, it was a bad year—or the company is in an investment phase. (In other words, like Amazon.com, it spent more than it made because the company and its investors believed it would realize a profit in the near future.)
People who work in corporate finance and accounting are responsible for managing the money—forecasting where it will come from, knowing where it is, and helping managers decide how to spend it in ways that will ensure the greatest return.
This career profile focuses on opportunities in corporate finance and accounting in private industry. To learn about other areas in financial services, read our industry profiles for investment banking, mutual funds and brokerage firms, commercial banking, insurance, and accounting. These profiles detail a variety of specialized financial functions beyond those in private enterprise.
Every company has a corporate-finance function. The responsibilities that fall under finance and accounting range from basic activities such as bill paying to very sophisticated ones such as forecasting the value of a potential acquisition. The stakes can amount to hundreds of millions—sometimes billions—of dollars and thousands of jobs. Careful assessment of the financial implications of particular strategic decisions can be critical to a company's success or failure.
Of course, a company's size, complexity, economic sector, and stage of development (start-up or established business) influence what tasks the corporate finance team undertakes every day. All companies need to balance their books. Some large technology companies, for example, hire financial experts to valuate potential acquisitions. Others (such as insurance companies) have hundreds of millions of dollars to invest and need financial wizards to manage it.
What You'll Do
Corporate finance includes two key functions: accounting and finance.
Accounting concerns itself with day-to-day operations. Accountants balance the books, track expenses and revenue, execute payroll, and pay the bills. They also compile all the financial data needed to issue a company's financial statements in accordance with government regulations.
Finance pros analyze revenue and expenses to ensure effective use of capital. They also advise businesses about project costs, make capital investments, and structure deals to help companies grow.
In spite of their different roles, finance and accounting are joined at the hip: The higher levels of accounting (budgeting and analysis) blend in with financial functions (analysis and projections). Thus, finance and accounting are often treated as one, with different divisions undertaking particular tasks such as cash management or taxes.
Finance and accounting jobs require critical, detail-oriented thinking. If you have a knack for using numbers to understand patterns that influence business, you're going to be valuable to a company. If you can't crunch and analyze them, this isn't going to be the right job for you. You should also like, and be good at, solving problems and be able to think critically about the numbers you're working with.
Finally, if you can effectively evaluate business scenarios and recommend a course of action based on quantitative research, finance may be just the career for you. If you have a BA, you can demonstrate your interest in finance with relevant undergraduate courses in accounting, finance, and economics. Internships are always a great way to strengthen your résumé and differentiate yourself from other candidates. An MBA will make you attractive to companies hiring for budgeting, planning, and strategy functions.
Many firms hire outstanding undergraduates and MBAs...