What is finance? | Finance Features | Types of finance| Benefits of Finance
Finance is something we know very well. It is not necessary to be autonomous, to have an SME or a large company to understand that this concept is present in the daily life of any person and/or family. And managing what you earn and spend today is crucial, especially for making a living.
But what is Finance? Is it the same as accounting? And what types of financing are there? All these doubts and a few more are what we will discuss in this article today.
What is finance
According to the RAE, finance is conceptualized as: “One’s obligation to undertake to respond to another person’s obligation.” However, among other meanings it offers, we usually know it as “Flows, goods”. In reality, finance can be defined as the part of the economy that is responsible for studying the money and capital markets and the institutions that work in them. It not only focuses on ways of making money (income, salary, etc.), but also deals with savings and investment, suggesting plans to make everything profitable.
The difference between finance and economics
It is clear, however, that Finance is one thing and economics is another. We can say that finance is a minimal part of everything involved in the economy.
While economics has a broad approach to different disciplines, it focuses on seeing how people’s needs will be met through economic production; finance simply has a more money-centered approach.
Finance vs accounting
It deals with certain concepts. We are talking about financial and economic terminology: benefits, interest rate, risk, investment costs …
What is the funding for?
Types of finance
They focus on companies. So what they are looking for is to learn how to acquire, manage and use a company’s economic resources. For example, they can decide which projects or products to invest in. So how to divide profits, or how to get funding sources to move the company forward.
These are the best known for practicing these daily individually and as a family. We refer to those who study how to obtain and manage resources. And it will encompass not only the economic issue, but also the workforce and education because depending on the career or occupation and the job he has.
Public finance, analysis, and management of all financial and economic resources owned by government agencies.
In other words, how to obtain resources with taxes, how to invest money in projects; how to redistribute resources and profits etc.
These relate to international transactions, mainly focused on companies that export or import or buy and sell abroad.
They should be very aware of the fluctuations in the exchange rate, its profitability, the indebtedness of a country and the risks that may arise from these transactions.
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Benefits of Finance
Here are the 5 most important reasons!
1-Convenience: Fintech mobile app development companies simplify customer processes for large and small businesses by adding banking capabilities with the help of BaaS service providers,
2-Seamless payments: Seamless experience creation through integrated financial services such as QR code on non-financial apps, BNPL (CHASÖ: buy now, pay later) or digital wallets
3-User experience: Fintech software developers have expertise in developing a user-friendly interface that focuses a user on their fintech product,
4-Conversions: Better understanding to serve customers due to greater visibility and convenience,
5-Revenue: The expectation of a 5x increase in revenue per user by integrating financial services into the company’s existing applications or customer campaigns.