What is the Difference Between Finance and Accounting? A Comprehensive Guide
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What is the Difference Between Finance and Accounting? A Comprehensive Guide
1. Introduction: Unpacking the Pillars of Business Management
Alright, let's get real for a moment. If you've ever dipped even a toe into the vast, sometimes intimidating, ocean of business, you've probably heard the terms "finance" and "accounting" tossed around like they're interchangeable. Maybe you've even used them that way yourself – no judgment here, we've all been there! It’s one of those common linguistic shortcuts, like calling all tissues Kleenex or all adhesive bandages Band-Aids. But here’s the kicker: while they’re undeniably related, inextricably linked even, they are distinct disciplines with fundamentally different focuses, methodologies, and objectives. Understanding the difference between finance and accounting isn't just academic; it's absolutely critical for anyone looking to navigate the business world, whether you're an aspiring entrepreneur, a seasoned executive, or just trying to make sense of your own personal budget.
Think of it this way: a business, any business, is a living, breathing entity. To keep it healthy, thriving, and growing, you need two vital organs working in perfect harmony. Accounting is like the historical record keeper, the meticulous chronicler of everything that has happened financially. It’s the detailed medical chart that tells you exactly what symptoms presented, what treatments were given, and what the patient’s vitals were at every single point in the past. Finance, on the other hand, is the strategic planner, the forward-looking physician who takes that historical data, analyzes it, and then makes crucial decisions about future health, growth, and risk management. It asks, "Given this history, what's the best course of action now to ensure a robust future?"
The confusion is understandable, truly. Both fields deal with money, numbers, and the financial health of an organization. Both require a keen analytical mind and a strong grasp of quantitative concepts. And often, in smaller businesses, one person might even wear both hats, blurring the lines even further. But as organizations grow in complexity, the distinct roles of finance vs accounting become not just apparent, but absolutely essential. One without the other is like trying to drive a car with a rearview mirror but no windshield, or vice versa – you’re either stuck reliving the past or blindly hurtling into the future.
This deep dive isn't just about definitions; it's about giving you a true insider's perspective, helping you grasp the nuances, appreciate the synergies, and ultimately, empower you to make more informed decisions, whether you're choosing a career path, evaluating an investment, or simply trying to understand the financial news. So, buckle up. We're about to unpack these two pillars of business management, revealing their unique strengths and how, together, they forge the backbone of every successful enterprise.
2. Understanding Accounting: The Language of Business
Let’s kick things off by really digging into accounting. If business had a universal language, accounting would be it. It’s the systematic recording, summarizing, and reporting of financial transactions that allows anyone – from an investor to an employee to the government – to understand a company's financial story. Without accounting, businesses would operate in a fog, unable to track their progress, understand their profitability, or meet their legal obligations. It’s the bedrock upon which all financial decisions are ultimately built, providing the verifiable truth of financial performance.
2.1. Core Purpose & Function
The core purpose of accounting is, at its heart, about telling a story – a financial narrative – that is both accurate and transparent. It meticulously documents every single financial event, from the smallest expense to the largest revenue stream, ensuring that there’s an unbroken chain of verifiable data. This isn't just for historical curiosity; it’s fundamental to accountability. Imagine trying to run a household without knowing how much you spent on groceries last month, or how much your utility bill was. You’d be flying blind, right? A business is infinitely more complex, and accounting provides that essential clarity.
This function extends to ensuring financial transparency, which is paramount in today's interconnected world. Stakeholders – shareholders, creditors, regulators, and even potential employees – rely on these records to make judgments about a company's health and trustworthiness. Accurate historical data is the foundation for trust in the marketplace. Without it, the financial system would crumble.
Moreover, accounting serves as a critical internal compass. Management uses these records to understand operational efficiency, identify areas of waste, and track performance against internal benchmarks. It’s not just about compliance; it's about understanding the internal workings of the money machine. The systematic nature of accounting means that every penny can, in theory, be traced back to its origin and purpose, providing an undeniable record of financial activity.
Ultimately, accounting’s primary role is to provide an accurate, objective, and comprehensive historical record. It answers the fundamental question: "What happened financially?" This retrospective view is non-negotiable for any entity that deals with money, and it underpins everything else we do in the financial world. It’s the painstaking collection of puzzle pieces that, once assembled, reveal the full picture of past financial performance.
2.2. Key Activities & Responsibilities
The daily grind and overarching responsibilities within accounting are incredibly diverse, but they all circle back to that core purpose of meticulous financial record-keeping and reporting. One of the most foundational activities is bookkeeping, which is essentially the entry-level, yet utterly crucial, task of recording financial transactions. Think of it as the grunt work, the daily ledger entries that capture every sale, every purchase, every payment. It’s the raw data input, the very first step in the accounting cycle. Without accurate bookkeeping, everything else collapses.
Moving beyond raw data entry, accountants are responsible for preparing financial statements. These are the formal reports that summarize the financial position and performance of a business. We're talking about the holy trinity: the income statement (showing profitability over a period), the balance sheet (a snapshot of assets, liabilities, and equity at a specific point), and the cash flow statement (detailing cash inflows and outflows). These statements are the output of all that diligent recording and summarizing, presenting a consolidated view that's comprehensible to both internal and external users.
Another monumental responsibility is auditing. This involves an independent examination of a company's financial statements to ensure they are presented fairly and accurately, in accordance with established accounting principles. Auditors act as financial detectives, scrutinizing records to verify their authenticity and compliance. This process is vital for building confidence among investors and creditors, assuring them that the reported numbers aren't just wishful thinking or outright fabrication. Tax compliance is another huge piece of the pie, where accountants ensure the business adheres to all relevant tax laws, calculating and filing tax returns, and advising on tax implications of various business decisions.
Finally, accountants often engage in internal controls, setting up systems and processes to prevent fraud, ensure operational efficiency, and safeguard assets. This involves everything from managing payroll and accounts payable/receivable to implementing robust software solutions. The sheer breadth of these activities underscores that accounting is far more than just "math"; it's a comprehensive system designed to maintain financial integrity and provide actionable insights derived from verifiable data.
2.3. Main Branches of Accounting
To fully appreciate the scope of accounting, it’s helpful to understand its main branches, which typically fall into two broad categories, each serving a distinct audience and purpose. The first, and often most visible, is financial accounting, which is primarily concerned with providing financial information to external stakeholders. This includes investors, creditors, government agencies, and the general public. The output of financial accounting is those standardized financial statements we just talked about – the income statement, balance sheet, and cash flow statement.
Financial accounting operates under strict rules and regulations, like GAAP or IFRS (which we'll discuss shortly), to ensure consistency and comparability across different companies. Its focus is on historical data, presenting a clear and accurate picture of what has happened financially. The information is typically aggregated and summarized, designed to give an overall view of the company's performance and position, rather than granular operational details. It's about public disclosure and transparency, allowing outsiders to make informed decisions about whether to invest, lend, or regulate.
Then we have managerial accounting, which shifts its focus entirely to internal users – the management team itself. Unlike financial accounting, managerial accounting isn't bound by external reporting standards like GAAP. Its purpose is to provide specific, detailed, and often forward-looking information that helps managers make operational and strategic decisions within the company. This could involve cost analysis for a new product, budgeting for a specific department, performance evaluations of different business units, or even analysis of potential mergers and acquisitions.
Managerial accounting is incredibly flexible and tailored to the unique needs of a business. It can delve into things like product costing, variance analysis (comparing actual results to budgeted results), and profitability analysis by customer segment. It’s less about reporting what did happen and more about understanding why it happened, and what could happen if certain decisions are made. While financial accounting provides the "what," managerial accounting helps answer the "how" and "why," empowering internal decision-making and strategic planning.
2.4. Guiding Principles & Standards
The reliability and comparability of financial information aren't accidental; they are the direct result of adherence to stringent guiding principles and standards. For companies operating in the United States, the bedrock of financial accounting is GAAP (Generally Accepted Accounting Principles). These are a comprehensive set of rules, conventions, and procedures that define how financial information should be recorded, summarized, and presented. Think of GAAP as the universally agreed-upon grammar and syntax for the language of business; without it, every company would be speaking a different dialect, making comparison and understanding impossible.
GAAP ensures that financial statements are consistent, relevant, reliable, and comparable. It dictates things like how revenue is recognized, how assets are valued, and how expenses are matched against revenues. For instance, the revenue recognition principle under GAAP specifies when and how revenue should be recorded, ensuring that sales aren’t booked prematurely. Similarly, the matching principle ensures that expenses incurred to generate revenue are recorded in the same period as that revenue. These principles aren't just arbitrary rules; they are designed to provide a true and fair view of a company's financial performance and position.
On the international stage, particularly for companies outside the U.S. or those with global operations, IFRS (International Financial Reporting Standards) holds sway. IFRS is a set of global accounting standards issued by the International Accounting Standards Board (IASB). While GAAP is more rules-based, IFRS tends to be more principles-based, allowing for a bit more interpretation in application, though both aim for the same goal of transparency and comparability. The move towards convergence between GAAP and IFRS has been a long-standing initiative, reflecting the globalized nature of business and the desire for a single, high-quality set of international standards.
The importance of these standards cannot be overstated. They are the guardians of financial integrity, providing a common framework that allows investors in New York to compare a company's performance with one in Tokyo, or a bank to assess the creditworthiness of a borrower based on universally understood financial metrics. Without GAAP or IFRS, financial reporting would be a chaotic, fragmented mess, undermining confidence and hindering capital markets.
2.5. Primary Tools & Technologies
Accounting, often stereotyped as a dusty, paper-laden profession, has been dramatically transformed by technology. Gone are the days of sprawling ledger books and manual calculations as the primary mode of operation. Today, accountants leverage a sophisticated array of tools and technologies to streamline processes, enhance accuracy, and provide deeper insights. At the heart of most small to medium-sized businesses lies accounting software like QuickBooks, Xero, or Sage. These platforms automate much of the bookkeeping process, handling invoicing, expense tracking, payroll, bank reconciliations, and the generation of basic financial reports. They significantly reduce manual errors and free up accountants to focus on analysis rather than data entry.
For larger enterprises, the landscape shifts to more comprehensive Enterprise Resource Planning (ERP) systems such as SAP, Oracle Financials, or Microsoft Dynamics. These aren't just accounting tools; they integrate all aspects of a business – from supply chain and human resources to sales and, of course, finance and accounting – into a single, cohesive system. This integration allows for real-time data flow, providing a holistic view of the organization's financial health and operational performance. The sheer scale and complexity of these systems require specialized knowledge, making expertise in them a valuable skill for accountants in larger corporations.
Despite the rise of specialized software, the humble spreadsheet, particularly Microsoft Excel, remains an indispensable tool for accountants. While not ideal for raw data entry in large volumes, Excel is unparalleled for detailed analysis, reconciliations, modeling, and custom reporting that goes beyond the capabilities of standard accounting software. It allows for incredible flexibility in manipulating data, performing ad-hoc calculations, and creating custom dashboards. Many accountants still refer to themselves as "Excel wizards," and for good reason – mastery of its functions can unlock profound insights from raw financial data.
Finally, the underlying structure of all this is the ledger system, albeit now digitized. Whether it's a general ledger in QuickBooks or a complex module within SAP, the fundamental principle remains the same: a systematic record of all financial transactions, categorized and balanced. The evolution of these tools means that while the core principles of accounting remain constant, the how of doing accounting is constantly evolving, demanding that professionals stay abreast of technological advancements to remain effective and efficient.
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Pro-Tip: The "Why" Behind the Numbers
Many people view accounting as just number-crunching. But a truly great accountant isn't just good at math; they understand the story those numbers tell. They can look at a balance sheet and not just see assets and liabilities, but the operational efficiency, the strategic decisions, and the inherent risks of the business. Always ask "why" when you see a number – why is it up? Why is it down? That's where the real value lies.
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3. Understanding Finance: The Art of Resource Management
Now, let's pivot and explore finance. If accounting is about meticulously chronicling the past, then finance is about strategically shaping the future. It’s the dynamic, forward-looking discipline focused on the management of money and other valuable assets, with an eye firmly fixed on maximizing future value and deftly navigating risk. Finance professionals aren't just recording what happened; they're actively deciding what should happen, making choices that will impact the wealth and solvency of individuals, companies, and even governments for years to come.
3.1. Core Purpose & Function
The core purpose of finance is fundamentally about making optimal decisions regarding the acquisition, allocation, and management of financial resources. It’s less about documenting transactions and more about strategically deploying capital to generate returns and maximize wealth. For a corporation, this means optimizing capital structure – deciding the right mix of debt and equity – to fund operations and growth. It’s about making astute investment decisions, evaluating potential projects, and choosing where to deploy scarce resources for the highest possible return, all while balancing risk.
Finance professionals are constantly looking ahead, asking questions like: "Where should we invest our profits?", "How should we fund our expansion?", "What's the best way to manage our cash flow to avoid liquidity issues?", and crucially, "How can we maximize shareholder wealth?" This forward-looking perspective often involves forecasting future economic conditions, market trends, and internal performance metrics. It's an inherently proactive discipline, constantly seeking opportunities and mitigating potential threats.
The function of finance also heavily involves risk management. Every financial decision carries some level of risk, and a key role of finance is to identify, assess, and manage these risks. This could range from hedging against currency fluctuations to evaluating the credit risk of potential borrowers or diversifying investment portfolios. It's about ensuring stability and resilience in the face of uncertainty, protecting assets while simultaneously pursuing growth.
Ultimately, finance is the engine of value creation. It's the art and science of making smart money decisions today that will yield greater prosperity tomorrow. It takes the historical data provided by accounting and transforms it into actionable strategies for growth, stability, and long-term success. It’s about making the money work for you, rather than just keeping track of it.
3.2. Key Activities & Responsibilities
The activities and responsibilities within finance are broad and diverse, reflecting its strategic, forward-looking nature. One of the foundational activities is budgeting, which involves creating a detailed plan for how money will be acquired and spent over a specific period. This isn't just about tracking expenses; it's about allocating resources strategically to achieve organizational goals. Closely related is forecasting, where finance professionals use historical data, economic trends, and statistical models to predict future financial performance, revenue, and expenses. These forecasts are crucial for strategic planning and decision-making, helping management anticipate challenges and seize opportunities.
Another critical area is investment analysis. This involves evaluating potential investment opportunities, whether it's a new factory, a startup venture, or a portfolio of stocks and bonds. Finance professionals use various valuation techniques and financial models to assess the potential returns and risks associated with these investments, guiding capital allocation decisions. This often means delving into complex calculations and considering a multitude of variables to determine if an investment is worthwhile.
Risk management is an overarching responsibility in finance. This encompasses identifying potential financial risks (e.g., market risk, credit risk, operational risk), quantifying their potential impact, and developing strategies to mitigate them. This could involve using derivatives to hedge against commodity price fluctuations, setting credit limits for customers, or implementing robust internal controls. The goal is to protect the organization's assets and ensure its financial stability in an unpredictable world.
Finally, capital allocation is perhaps the pinnacle of finance's responsibilities. This is the process of deciding where to deploy a company's financial resources to generate the greatest value. It involves weighing competing investment opportunities, determining the optimal mix of debt and equity financing, and managing working capital efficiently. These decisions directly impact a company's growth trajectory, profitability, and ultimately, shareholder wealth. These activities collectively highlight how finance is constantly engaged in dynamic decision-making, shaping the financial destiny of an entity.
3.3. Main Branches of Finance
Just like accounting, finance branches out into several specialized areas, each with its unique focus and set of challenges. One of the most prominent is corporate finance, which centers on the financial decisions that businesses make and the tools and analysis used to make those decisions. This includes everything from capital budgeting (deciding which projects to invest in), capital structure (how to fund those projects through debt or equity), and working capital management (managing short-term assets and liabilities). It's the financial backbone of any operating business, guiding its growth and daily operations.
Then there's personal finance, which, as the name suggests, deals with the financial decisions and activities of individuals and households. This covers a vast array of topics, including budgeting, saving, insurance, mortgage planning, investment planning, and retirement planning. The goal here is to help individuals manage their money effectively to achieve their personal financial goals, ensuring long-term financial security and prosperity. While it might seem less complex than corporate finance, the emotional and behavioral aspects often make personal finance incredibly challenging in practice.
Public finance focuses on the role of government in the economy. This branch examines how governments raise money (through taxation and borrowing), how they spend it (on public services, infrastructure, defense), and the impact of these activities on the economy. It delves into fiscal policy, national debt, and the efficient allocation of public resources. Understanding public finance is crucial for comprehending macroeconomic trends and government's influence on markets.
Finally, investment finance (often overlapping with investment banking) is concerned with the financial markets and the valuation of securities. This includes understanding stocks, bonds, derivatives, and real estate, as well as the strategies involved in building and managing investment portfolios. Professionals in this field might work as portfolio managers, financial analysts, or investment bankers, helping clients or institutions make profitable investment decisions, raise capital, or facilitate mergers and acquisitions. Each of these branches, while distinct, shares the common thread of managing money to achieve specific objectives, whether for a company, an individual, or the public good.
3.4. Guiding Theories & Concepts
Finance isn't just about intuition; it's built upon a robust foundation of theories and concepts that help explain market behavior and guide rational decision-making. Perhaps the most fundamental concept is the Time Value of Money (TVM). This principle states that a dollar today is worth more than a dollar tomorrow, because a dollar today can be invested and earn a return. TVM is critical for evaluating investments, discounting future cash flows, and making capital budgeting decisions. It’s the very reason we care about interest rates and compound growth.
Another cornerstone is the risk-return trade-off. This theory posits that higher potential returns usually come with higher risk. There’s no such thing as a free lunch in finance; if an investment promises an exceptionally high return, you can bet it carries a commensurately high level of risk. Understanding this trade-off is crucial for constructing balanced portfolios and making informed investment decisions. It helps investors align their appetite for risk with their desired returns.
Portfolio theory, pioneered by Harry Markowitz, revolutionized investment management. It suggests that investors can reduce overall portfolio risk without necessarily sacrificing returns by combining different assets that don't move in perfect lockstep with each other. The idea is diversification – don't put all your eggs in one basket. By strategically combining assets, investors can achieve a higher risk-adjusted return than by holding individual assets in isolation.
Building on this, the Capital Asset Pricing Model (CAPM) is a widely used model for determining the expected return on an asset, given its risk. It relates the expected return of an asset to its systematic risk (beta), the risk-free rate, and the expected market risk premium. While CAPM has its limitations and assumptions, it provides a powerful framework for understanding how markets price risk and how investors should expect to be compensated for taking on different levels of risk. These theories, among many others, provide the intellectual scaffolding upon which modern financial practices are built.
3.5. Primary Tools & Technologies
The world of finance is incredibly technology-driven, relying on sophisticated tools to analyze markets, model scenarios, and execute transactions at lightning speed. One of the most pervasive tools is financial modeling software, often built within advanced spreadsheet programs like Excel or specialized platforms. These models are used for everything from valuing companies and projects to forecasting future performance, assessing risk, and analyzing different strategic options. A strong financial modeler can translate complex business scenarios into quantifiable outcomes, providing invaluable insights for decision-makers.
For those in investment finance, trading platforms are absolutely essential. These are sophisticated software systems that allow investors and traders to buy and sell financial instruments (stocks, bonds, derivatives, currencies) in real-time. Platforms range from simple online brokerage interfaces for retail investors to highly complex institutional systems used by investment banks and hedge funds, often featuring advanced charting, analytical tools, and algorithmic trading capabilities. The speed and efficiency of these platforms can directly impact trading profitability.
Statistical analysis tools and software packages like R, Python with libraries like Pandas and NumPy, or specialized econometric software are increasingly critical. Finance professionals use these tools to perform complex quantitative analysis, build predictive models, backtest trading strategies, and analyze large datasets to uncover market trends and anomalies. The ability to manipulate and derive insights from vast amounts of data is becoming a non-negotiable skill in many finance roles.
Finally, access to robust databases of financial information is paramount. These include Bloomberg Terminals, Refinitiv Eikon (formerly Thomson Reuters Eikon), Capital IQ, and FactSet, which provide real-time market data, company financials, economic indicators, news, and research reports. These terminals are the lifeblood of institutional finance, offering comprehensive data sets that fuel financial analysis and decision-making. The combination of these powerful tools allows finance professionals to operate at the cutting edge of market dynamics and strategic planning.
4. The Core Differences: Accounting vs. Finance Side-by-Side
Alright, we’ve broken down each discipline individually. Now, let’s put them head-to-head and really highlight the core differences between finance and accounting. This is where the rubber meets the road, where we clarify why they are distinct, yet undeniably complementary, pillars of business.
4.1. Primary Focus & Time Horizon
This is perhaps the most fundamental distinction, and it's a concept I often emphasize when explaining the main difference between finance and accounting. Accounting is inherently backward-looking. Its primary focus is on meticulously recording, classifying, and summarizing financial transactions that have already occurred. It's about providing an accurate historical record, detailing what happened financially during a specific period. Think of it as the rearview mirror of a car – it tells you precisely where you’ve been, what turns you took, and what obstacles you passed.
This retrospective view is crucial for understanding past performance, ensuring compliance, and providing a factual basis for future decisions. An accountant will tell you, with verifiable data, exactly how much profit a company made last quarter, or what its assets and liabilities looked like on a specific date in the past. Their domain is the verifiable truth of history, documented to the penny. The time horizon for accounting is firmly rooted in the past, analyzing completed cycles and events.
Finance, on the other hand, is relentlessly forward-looking. Its primary focus is on making decisions about the future. Finance professionals take that historical data provided by accounting, along with current market conditions and economic forecasts, and use it to project future outcomes, evaluate potential investments, and manage risk. It's the windshield of the car – it shows you where you're going, what opportunities lie ahead, and what potential hazards you might encounter.
A finance professional isn't just interested in last quarter's profit; they want to know what that profit implies for future growth, how it can be reinvested, or what impact it has on the company's stock price going forward. Their domain is the strategic deployment of capital to maximize future value. The time horizon for finance is firmly in the future, constantly asking "what if?" and "what next?" It’s about anticipating, planning, and adapting to create future wealth.
4.2. Objective & Outcome
Building on the time horizon difference, the ultimate objectives and desired outcomes for each field also diverge significantly. Accounting's primary objective is fundamentally about accurate financial reporting and ensuring compliance with regulatory standards. The goal is to present a true and fair view of an organization's financial position and performance, adhering to principles like GAAP or IFRS. Accountants strive for precision, verifiability, and objectivity in their reports. Their success is measured by the reliability, consistency, and completeness of the financial records they produce, ensuring that all stakeholders have access to trustworthy information.
The outcome of meticulous accounting is financial transparency and accountability. It provides a basis for external audits, tax calculations, and regulatory filings. When an accountant signs off on financial statements, they are essentially attesting to the historical accuracy of those numbers, providing a factual foundation upon which others can build. It's about maintaining order, adhering to rules, and preventing financial misrepresentation. The focus is on stewardship – safeguarding assets and providing a clear record of their use.
Finance, conversely, aims for optimal resource allocation and wealth maximization. Its objective isn't just to report what happened, but to actively influence what will happen. Finance professionals are tasked with making strategic decisions that will enhance the value of the organization, whether that's through profitable investments, efficient capital structures, or effective risk management. Their success is often measured by metrics like increased shareholder value, improved return on investment, or enhanced profitability.
The outcome of effective finance is growth, strategic advantage, and increased financial prosperity. It's about making choices that generate the highest possible return for a given level of risk, constantly seeking ways to grow the pie. Where accounting aims for a clear, factual picture of the past, finance aims for a prosperous, strategically sound future. It's the difference between documenting the score of the last game and strategizing how to win the next championship.
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Insider Note: The "Why" vs. "What Now?"
I’ve seen countless new graduates struggle with this. Accountants are excellent at explaining why a company's profit was $X last year. Finance pros take that $X and then ask, "Okay, so what do we do with it? Invest? Pay down debt? Buy back shares? How does this impact our future stock price?" It's a subtle but crucial mental shift.
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4.3. Data Utilization & Interpretation
The way each discipline utilizes and interprets data further underscores their distinct natures. Accounting places a paramount emphasis on precision and verifiable data. Every entry, every number, must be supported by documentation – invoices, receipts, bank statements, contracts. The data must be objective, quantifiable, and historically accurate. Accountants are essentially financial historians, meticulously piecing together verifiable facts to construct a clear picture of past events. Their interpretation of data is largely focused on ensuring compliance with established rules and principles, making sure the numbers accurately reflect the economic reality of past transactions.
When an accountant looks at a financial statement, they are scrutinizing it for accuracy, consistency, and adherence to GAAP or IFRS. They are concerned with whether the revenue was recognized correctly, if expenses are properly matched, and if assets are valued according to standard. There's a strong emphasis on audit trails and the ability to trace every reported number back to its source. The data is largely static once recorded, representing a fixed point in time or a completed period.
Finance, by contrast, uses data for predictive analysis and strategic planning, and this often involves a significant degree of assumption and forecasting. While finance professionals certainly rely on the precise historical data provided by accounting, they don't stop there. They project these numbers into
