Finance is a foreign language

Finance is the language of business. Non-finance managers, who don’t understand the language, feel incredibly handicapped.?

To understand just how handicapped they feel, we’re going to visit a foreign country where you don’t understand the language.

You get off the plane. Announcements are being made on where to collect your luggage, but you don't understand them.

You ask someone but they don’t speak English. They are trying to explain where to go by gesturing and they’re getting really frustrated. So are you! You just can’t make out what they’re saying.

There are signs with instructions but you read them or make sense of them either.?

This is just the beginning of your journey. You’re just trying to figure out where to collect your luggage. You haven’t yet travelled on public transport, gone shopping, gone to the bank, tried to find your hotel, tried to order food, converse with the locals or buy a beer!!! You get the picture.

Think of the stress, the anxiety, the frustration and the loneliness!!

Now, you have an inkling of what it feels like to be a non-finance manager, working in a organization, who is financially illiterate.

Have you ever asked yourself this question? What would my day look like if I were a financially literate non-finance manager ?

What would I understand that I previously couldn’t,? what conversations would I now be able to participate in and what decisions would I make differently?

Let’s explore the benefits of being financially literate and understanding the financial language:

Reading and Understanding Financial data

When you can read and understand financial data, numbers begin to tell a story.

When you look at your P&L, and you understand terms like gross profit, EBITDA and net profit, you will understand the levers you need to pull to improve profitability.

You’ll understand where you need to make changes and where you need to pivot to protect the margin and to grow.

You’ll see what cost-cutting measures you might want to implement to increase profits and discover ways to increase margins.

Speaking Finance

Most non-finance people don’t speak up in financial meetings because they fear looking stupid or not using the right financial jargon.

When you understand finance, you’re able speak up and challenge others in finance meetings and explain from an your perspective why/how a proposed business plan makes sense or doesn’t make sense.

When you can engage in financial conversations and add value, people will see that you really own your numbers. This is what it means to be a real P&L owner.?

Just like any two-way conversation - when you understand financial jargon and are able to contribute to the financial discussion, the benefits can be exponential for the organization.

The nod and smile (but I really have no clue what you’re talking about) doesn’t help anybody. It doesn’t drive the business forward and ultimately KPI’s are not met because the people implementing the KPI’s don’t truly understand them. There is an expectation gap and people are not on the same page.

Non-finance managers want to and deserve to feel like the visitor who knows the language of the foreign country.

Think how good it must feel to land in a foreign country and you’re a master of the foreign language. You know exactly where you’re going and you can navigate and find your way around like a real pro. You’re understood and you understand. You’re efficient and fast and the whole holiday experience is pain-free and extremely enjoyable. And most importantly, when things go wrong, you can quickly make changes to your plans and ask for help.?

If finance feels like a foreign language to your non-finance managers, we can help. DM me or visit www.accountingmadeeasy.co