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How to manage finance as a non-finance manager

Nov 09, 2016

How to manage finance as a non-finance manager

The first thought in seeing these words to a non-financial manager is to stifle a yawn and start thinking of other issues. But it does not have to be that way. 

Financial information can be helpful in your career, and can even be interesting. You do not have to understand all the technicalities of accruals and prepayments and other such matters, but if you appreciate the key aspects then the understanding can even be fascinating. 

The trouble with many reporting systems is that they produce a mass of figures, and it is difficult to see the wood from the trees. If you can persuade your finance team to present figures which emphasis the key aspects which are relevant to your role, then these figures can come alive.

Budgeting yourself personally and in business

We all need to budget even in our personal lives to make sure our outgoings do not exceed our incomings, and an organisation is no different. By planning ahead, through a budget, or a forecast, or a projection, then such shortfalls can be seen in advance and plans made to correct these. However, budgets are used for much more than just that. All sorts of plans can be made through budgets, and then it can make the job interesting by investigating where the budget differs from the actual - which can be either beneficial of detrimental differences.

By co-ordinating with the local finance manager to portray figures in a helpful user-friendly way, then this can yield favourable benefits. You need to be constantly badgering your finance manager to help you do this. Management is interested in making profits, and needs to have the best financial information to take crucial decisions, and then see the financial effect of these decisions.

Profits are key.

It is not just what the profit is, but more importantly how that profit arose and how it can be improved - where will the profit come from, product by product or service by service, and how to correct future issues which gave rise to losses in the past.  

Finances which look to the future are always more interesting than finances which report the past. The past has gone, and cannot be corrected. But the future is exciting and challenging, with an element of the unknown. Financial information can help navigate this environment, and plan how to tackle it, and monitor how it happens.   

So how can you be interested in finance? Do not be downcast by worrying about the terminology.  Finance is easy – but accountants make it complicated! When we talk about Profit, we all understand that. So accountants complicate that by asking is it gross profit, net profit, operating profit, pre-tax profit, post-tax profit, or retained profit. And what is the difference between income, sales, turnover, or revenue?  Don’t worry about it. Get to the key figures – understand them, and enjoy the challenge of meeting them! Another route to get expert knowledge and training on the topic is to attend finance training courses.

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