Finance is the language of business. And yet managers and leadership teams in many organisations around the UK receive very little, if any, help in understanding the financials to help drive the business forward. It might be difficult for managers to contribute to improving the company’s profitability if they have no idea how!
There are possibly many reasons for this. Financial training isn’t really considered the sexiest subject, is it?! Many are daunted by the prospect of finance, considering it technical, complex, dull or boring (or all of the above). However, just consider the many fantastic benefits to your organisation of empowering your team to be financially aware and astute.
- Improved profitability once managers truly understand how their decisions can increase revenues and improve costs
- Improved cash flow as managers know the implications of an exciting new customer and contract….that doesn’t pay on time or at all
- Better decision making which boosts the financial health & performance of your organisation
- More valuable and useful participation in corporate strategy, business planning and during budgeting season
- Better challenge and questioning from the managers
- Improved focus on the right activities that drive the business forward
- The list goes on!
Outsmart your competition
With financially savvy employees and the improved decision making that results, this can give you a great advantage over your competitors. Perhaps the numbers are showing you should devote more resources to a particular activity or cut back on other areas. With an executive team who understand the financials, these improved decisions can also be agreed and implemented more quickly, effectively blowing your competition out of the water.
Company health warning
Many managers don’t understand the financial reports they are given to help them make sound business decisions and they are too embarrassed to ask. They may ignore the information completely or misinterpret what the reports mean. As Richard Lambert, author of Financial Literacy for Managers says: “All of these behaviours are dangerous to your company’s financial health. They are like trying to fly a plane with no instruments and with the windshield fogged up.” Look around at your next management meeting when it’s time for the finance report and see your managers shifting uncomfortably or nervously. It’s not their fault! Empower them! Educate your workforce in the language of business.
Fun finance quiz!
If you want to see how financially savvy your management team are, or even if you wish to test yourself, please take our fun finance quiz and see how you all do! Have fun and best of luck!
Please click here for quiz.
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