It’s no secret that if you get promoted to a leadership role, you’ll be expected to manage staff, meet team objectives and manage the budget. However, more often than not, newly appointed managers get very little training and are often thrown in at the deep end when it comes to balancing the books. Some people pick this additional responsibility up with ease, but how do you get up to speed if you’re not a numbers person and finances leave you scratching your head?
Below are some ways that you can learn the fundamentals of business finance if you’re a non-financial manager.
Understand the financial impact of your role
When working outside the financial department, it can be hard to see the connection between the work that you’re doing and the impact it has on the finances. It’s easy to think of the impact of your work as limited to yourself, your team, or your wider department. But whether you’re in marketing, IT, or project management, what you do will have a flow-on effect to areas of the business beyond that. Learning the fundamentals of business finance can help you understand how your piece of the puzzle fits in with the rest of the business.
Get to grip with the basics
It’s hard to get on top of team finances when you don’t understand the basics. Developing your financial literacy and taking the time to learn how budgets, cost centres, profit and loss statements and margins work, will pay for itself in spades.
With a solid understanding in finance:
- You can ensure that you’re spending the right funds, at the right time, in the right way and not over or underspending.
- You can figure out what metrics your department’s performance should be measured against, allowing you to get a clearer picture of what’s working well and what’s not.
- You’ll gain the confidence to have robust discussions about budgets and strategy with your manager, the finance team and other departments.
Whether you’re in marketing, IT, or project management, what you do will have a flow-on effect to areas of the business beyond that. Learning the fundamentals of business finance can help you understand how your piece of the puzzle fits in with the rest of the business.
Understand the unique requirements of your company
It’s important that you take the time to understand your companies financial management cycle; from planning and budgeting through to reporting and forecasting, as well as the templates, systems and software’s you need to use. This way you won’t get caught by the surprise of sudden deadlines and have plenty of time to look at examples, ask questions and upskill as needed.
Ask to set up regular training sessions with your direct manager or someone in your finance team. People tend to have a lot more respect for those who ask questions and seek guidance, than those who pretend everything is OK and then submit figures that make no sense or put the budget in jeopardy.
Getting to know the fundamentals of your business’ financial processes will also give you the opportunity to gain a wider understanding of the long-term business plans. You’ll then be able to better align your day-to-day operations with the ‘big picture’.
Make better-informed decisions
Being better-informed on the financial effect of your everyday activities will help you make smarter decisions toward the long-term goals of the business. While not every activity has a direct and obvious ROI, understanding financial impact will help you determine where to funnel your energy to churn out better results. This might mean re-organising your priorities, adjusting your goals or developing a new strategy. Considering the financial impact of your decisions will enable you and your team to maximise value for the business.
Motivate your team to achieve organisational and individual goals
As a manager, it’s useful to have metrics and standards to use to motivate your staff. Through building financial knowledge, you’ll be able to communicate the objectives, opportunities and plans of the business and help your employees see the connection more easily between the work they do and the success of the business.
The understanding alone can be an excellent motivator, but you can also use financial metrics as part of the evaluation of your employees’ performance to motivate them further. For example, a marketing manager might compare the sales figures of a product from the current and previous month to evaluate the effectiveness of a marketing campaign worked on by their team.
Understanding finance as a non-financial manager is an important and useful skill that will benefit you, your team, and your business. You can upskill yourself in a number of ways through learning from your peers, self-driven distance learning or researching online and in books. If however, you need to upskill in a hurry, or just brush up on your general understandings of finance, our Finance for Non-Financial Managers course could be a good fit for you and is offered in both face-to-face courses and online. If you’d like to find out more just get in touch, our friendly team is here to help.