Make Financial Statements Work for You, Not Against You

As a woman in sales, one of the most powerful skills you can develop is translating the features and benefits of your offering to how it impacts your prospect's bottom line. While many qualities make us effective at influencing decision-makers (empathy, relationship-building), understanding financial statements is an essential skill for you to reach the top 1%.

Today, let's talk about financial statements and how your knowledge of them can give you a competitive advantage.

Q: So, what exactly are financial statements??

A: Financial statements are formalized records of a business's financial activities, position, and performance.

Q: I work in sales, not accounting or finance. Why do I need to understand financial statements?

A: Your ability to have financial discussions will open doors and help you influence executive-level customers and prospects while separating you from your competition.?

Three reasons why you need to understand financial statements:

1. Understanding the financial implication of your value proposition is critical for you to lead customers and prospects to make mutually beneficial decisions effectively.
2. Quantifying your product's value, or ROI ("Return on Investment"), to your customers. Communicating your product's ROI is an influential sales tool in any economic climate.?During booming economic times, you can leverage it?to strengthen and build your case for implementing your product or service.?In a recession, communicating ROI allows you to avoid the pain of lost sales to buyers with frozen budgets.
3. Qualifying your prospect for a line of credit with your company. Often, your organization is taking on more risk than a financial institution would, so they often need to gather as much information as possible before making a credit decision.

There are three major types of financial statements, according to the Securities and Exchange Commission:

1. Balance sheet
2. Income statement
3. Cash flow statement

• Balance sheet –?The balance sheet provides a snapshot of the company's total assets, liabilities, and shareholders' equity. This is most commonly expressed as assets = liabilities + equity. Balance sheets display the current value of assets at that moment in time, showing their depreciated value. Assets can include physical as well as intangible property, such as real estate, inventory, or accounts receivable. Liabilities encompass all money owed by a company, including outstanding loans, accounts payable, and other forms of debt. Shareholders' equity represents the company's net worth if the company sold all its assets and paid off all liabilities.
• Income statement –?The income statement shows a company's revenues against its expenses during a specified period. Individual sources of income and expenses are listed. Then total expenses are subtracted from total revenue to determine a company's net income. The net income represents the profit a company made during the period in question.
• Cash flow statement –?The cash flow statement gives an overview of how a company generates cash to pay its debts, fund its operations, and make investments. It allows you to understand where a company's cash is coming from and how it is being spent. This statement does not use a specific formula but simply lists a company's cash-generating activities during a specified period, how much cash it had at the start of the period, and how much cash it ended up with at the end of the period.

Q: I can definitely see the value of developing my financial acumen, but I have zero knowledge of finance or accounting. How can I create an understanding that will give me more influence and command through the sales process?

A: The National Association of Women Sales Professionals and I are hosting a new masterclass, Business Acumen for Women In Sales: Understanding Financial Statements, on December 15, 2021. We'll unpack financial statements and how to grasp the performance drivers for your customer's business so you can clearly explain how your product or service will drive THEIR results. You can RSVP here.

Becoming well-versed in financial statements will give you more influence and command through the sales process, resulting in faster sales times and less price pressure. Join us on December 15 and learn how to have a financial conversation that will allow you to open doors and influence the highest levels of your customers/prospects and separate you from your competition.

Secure your spot.