ACCOUNTING: The methodical, precise recording, reporting, and assessment of the financial deals and transactions of a business.
FINANCE: The efficient and productive management of assets and liabilities based on existing information.
Now, in terms of business, in order to have your finances in order, you need to have a quality accounting department. Proper finance relies on accurate accounting, to put it bluntly.
In terms of business, the accounting department produces information regarding the daily operations of the business, based on past performance analysis. This includes:
Financial declarations like balance sheets.
Income declarations like profit and loss ledgers.
Positional declarations like changes in financial sources and uses.
The information contained within these declarations and reports aids the directors in the finance department in analyzing past performance in order to determine a strategy for the future.
In terms of business, the finance department, then, is responsible for managing the actual handling of money in regards to the analysis. This department takes all of the data collected and analyzed by the accounting department based on past actions and results and formulates a direction for action in the future.
Another way to look at it is: Accounting looks at the past while finance looks to the future.