As the name suggests, "internal finance" refers to the finance departments within companies, as opposed to external advisers, such as banks and accountancy firms. Graduate opportunities can be found at firms large and small across all sectors. Whilst the bigger institutions may offer rotation schemes, in most cases you will join either the management accounting or the financial accounting department.
The fundamental difference between management and financial accounting lies in who the work is aimed at. Financial accountants produce the official figures that are released publically to shareholders and other interested parties, including the most common financial statements: the balance sheet and the P&L. The primary aim of a financial accounting team is to make sense of the torrent of figures swirling around the company and to present them in a comprehensible and standardised format that gives an indication of the financial health of the firm. Such statements are produced in line with regulation designed to encourage as much transparency as possible. Consequently, financial accountants need to understand the legal and regulatory implications of their work, especially in the wake of the last decade, which began with the Enron scandal and ended with many banks admitting that they did not know the contents of their own balance sheets.
On the other hand, the management accountant's audience is purely internal: their work will only be seen by people within the firm. The aim of the management accountant is to produce financial reports which can be used to guide senior management in their strategic decision making. Consequently, management accountants typically produce forward-looking financial projections (whereas financial accountants analyse things that have already occurred). Given that the management accountant's work will not be published to outsiders, there is no legislation dictating how it is produced.
A management accounting job will involve a significant amount of communication within the firm. You will be required to meet and interview various teams to understand their figures and to present your projections to senior managers. The maths required to produce revenue and cost projections can also be complicated. The work is typically project based, for example, you may be projecting how price cuts affect sales volumes for an FMCG firm, or the financial merits of moving a call centre from the UK to India.
Financial accountancy jobs involve less complex maths but still require the ability to handle numbers with accuracy and confidence in order to avoid giving erroneous figures to the firm's stakeholders. The job is more desk-based than that of a management accountant and less communication within the firm is required. However, by handling financial statements on a regular basis you will quickly come to understand in detail the dynamics which make a company work and the wide range of factors that influence performance.
As with most jobs, the career path in internal finance is normally more structured in big companies than small ones. In larger firms, where new graduates enter each year, you could soon find yourself managing more junior staff members and playing an increasingly important role in producing financial statements or on project work. At a good smaller company you may find yourself getting extra responsibility in quick time as you prove yourself a competent employee and there are fewer staff members to take the burden. However, it is always worth asking smaller companies about their career paths before you commit to joining as there can be a tendency not to promote until someone more senior has left, leaving you frustrated as your peer group rise around you.
However, at the right firm, starting a career in internal finance has many advantages. Delving into the financial drivers at a company, whether a large multinational or a new start-up, offer an insight into the workings of the commercial world at an unusually early stage of a career. This knowledge is boosted by the fact that most companies will sponsor you through a professional qualification, either the CIMA (Chartered Institute of Management Accountants) or the ACA (Associated Chartered Accountant). These are highly valued beyond the financial industry, offering career paths into consultancy, banking and business-orientated roles in corporates.