Has your management ever asked you to get a better grip on your expenditure and investments? Have you had to choose between several projects, but lacked the financial elements? Far from being the preserve of the finance department, finance will help you manage your business. Acquiring accounting skills for a manager helps you to gain perspective.
By mastering the basics of financial decision-making, you'll be able to take a medium-term view! We explain it all!
Why should you have financial knowledge when you're a manager?
To optimize value creation within the company
To make the best decisions for the organization, managers need to understand the process of creating and assessing value. The objective? For example, to measure the impact of automating or outsourcing certain tasks. Understanding value will also help you when reorganizing a department or hiring a new candidate.
For better communication with management
Accounting for non-financial people is a real asset, strengthening your credibility. By capturing more relevant inputs (data), you'll be better able to defend your ideas to management, such as the profitability of a project. It's also easier to talk to the CFO (Chief Financial Officer) about your department's costs!
To choose the right investments
Accounting for non-financial people is a real asset, strengthening your credibility. By capturing more relevant inputs (data), you'll be better able to defend your ideas to management, such as the profitability of a project. It's also easier to talk to the CFO (Chief Financial Officer) about your department's costs!
To control expenses
As a good manager, you'll be managing a team as well as monetary resources. The decisions you make will therefore have repercussions on the organization's financial performance. Stop wasting resources! Keeping an eye on the figures, controlling costs, identifying ways of optimizing expenses... all provide valuable information for optimizing your department's economic performance.
Finance & accounting
The key financial skills needed to be a good manager
To help you see things more clearly, we have selected the accounting skills for non-financial managers that we feel are most relevant (the list is therefore non-exhaustive 😉 ). These will enable you to carry out a rapid diagnosis of the business and then identify the levers for performance.
1. Managing budget forecasts
An essential skill for all managers, budget management enables you to achieve your objectives and monitor your business with confidence.
Prepared by project or by accounting year, the budget is used in particular to:
- Define an action plan to frame the financial year;
- Question, plan and measure the effectiveness of human and budgetary resources;
- Ensure that your department's spending is aligned with the organization's strategy.
2. Master the basic of accounting
Balance sheet, income statement, cash flow statement... you'll also need to understand your organization's financial statements! The goal? Gain a better understanding of your organization's operations. Mastering the basics of accounting for non-financial people is an excellent way of laying the foundations of knowledge linked to financial ratios and controlling!
All these skills will help you to set financial targets. Setting them is an important step in helping your team make the right decisions.
3. Interpreting key controlling ratios (KPIs)
Controlling is a cross-functional process used to analyze a company's financial and accounting performance. In other words, it's all about ensuring that resources are used efficiently in each department.
For a "non-financial" manager, certain key indicators known as KPIs remain to be discovered:
- Profitability: gross operating margin, labor productivity, etc. ;
- Working capital requirements (or WCR): short-term financing needs to cover the time lag between cash receipts and disbursements;
- Cashflow: an indicator for measuring cash flow.
This list is by no means exhaustive, so be curious!
4. Having a basic understanding of market finance
Don't panic: as a manager, your organization won't be asking you for cutting-edge expertise in market finance! However, an understanding of basic financial elements is a plus in formal (or informal) discussions with your management. This will enable you to :
- Understand how to put a company's capital to work, particularly in terms of investing in financial markets.
- Understand investment strategies, integrating the notion of risk and return.
And don't forget to work on finance and accounting terminology. This will help you communicate better with your teams.
5. Adopt a "finance-oriented" vision
In addition to financial management skills, your mindset is a key point to work on. Looking to the future, the mindset of a financier requires an understanding of the organization's economic health... and the ability to anticipate! A true forward-thinker, you'll need to think "long term" to stay on course for growth.
A real asset in everyday life, finance is not the enemy of benevolent management! Rest assured, cost control is not at the expense of your teams. At our organization, we'll teach you the financial language you need to communicate with your stakeholders, as well as how to measure the impact of your decisions on value creation. And much more!
Découvrez nos formations sur la comptabilité
