Every high school student takes at least one class in a foreign language – it might be Spanish, French, German, or even Latin. But how many people have ever had a class in the language of business (also known as accounting)? We would never expect a student who studied Spanish to decipher a text in German, so why do we expect business leaders to make sense of a financial statement they can’t understand? Few companies offer training to their current or rising leaders and, if they send them to leadership training, it tends to focus on the people skills rather than financial understanding. We agree that leadership skills are important, but how can you lead a team of people towards a financial goal they can’t understand or worse connect to their daily activities?
We think financial education is a critical aspect of financial success for businesses of all sizes. We offer Financial Fluency* training for owners and their teams designed to give everyone a common understanding of the language of accounting.
We start by explaining financial statements, the three bottom lines that they display, and how these results might be interpreted by external users of those financial statements.
We talk about the difference between profit and cash as well as how collectability can impact the amount of available cash in the business. From there, we educate owners and employees about the drivers of financial results and demonstrate how front line workers in all areas of the business have the ability to impact the financial goals of the business.
Using a combination of automated, interactive dashboards and what-if spreadsheets, trainers can help make financial results relevant and actionable for everyone involved. We find that teams leave the training with new insights about the complexities of business, the importance of good recordkeeping, and a sense of relief that they can ask questions when they encounter an accounting challenge.
By removing the mystery (and often fear) around common financial concepts, organization leaders enable everyone to be part of the company’s financial success.
*Drawn from our Mentor Plus, Level 5 training, this term indicates a level of understanding that goes beyond “Financial Literacy” (which is being able to read financial statements) to “Financial Fluency” which is the ability to speak and understand financial concepts so they can be applied to actions and results.
