Home » Business » Positives of Having Financial Expertise [column]

In football, all players, regardless of their position are equipped with training on how to ensure that goals are produced.

Its everyone’s effort and aim to ensure that the ball is kept around the goal area where they shoot. It would be folly for defence to believe that their sole responsibility is kicking the ball away from their goal post.

The most successful defenders have on occasions, sometimes out of excessive zeal, have been known to produce goals. So it should be in the business world.

Today’s organisations, especially in the increasingly tough economic environment, must emphasise on the need for not only managers but all employees to be able to know that they can also contribute to the financial success of the business.

An “I am an employee” mentality is very retrogressive it takes away the potential of thinking of ways of contributing to the success of the business.

If only everyone within the company understood ways of making money for the company and how each individual impacts the different ways of making money, some of our challenges would be easier solved.

If only the workshop floor assistant would be able to understand the financials reports released, that person would be in a better position to jump in and provide full support for a cost management exercise.

They would be able to appreciate what sales and revenue is, what cost of sales are, what is the gross margin and the net profit or loss. That way a person is able to know what impact their actions have to the bottom line.

Many times, businesses compartmentalise functions and most businesses suffer as a result. A driver will be relegated to his driving duties to the extend that he may not be knowledgeable about selling the company.

That is why you find that many of the drivers fail to answer a lot of questions that customers raise during their trips outside office premise. If a person has been equipped with business acumen, they are able to flow in different boats.

With business acumen, the individual is given basic skills on reading the financial statement.

Let’s consider an employee that works in the flour department that keeps on ordering more and more flour in anticipation of an increase in demand.

That person is not aware on the dangers of keeping and hoarding stock as well as the impact of excessive inventory on managing the working capital.

They may feel secure by having so much stock within their warehouse yet its affecting their bottom line.

Every individual must have an appreciation of what ways the company makes money and how that cash is generated. An employee who is not knowledgeable of how his decision impacts the business will never be able to act appropriately.

This kind of open culture allows the business go grow. This goes contrary to some owner managed businesses that believe that the employee must never know what the company is making. Financial ratios are not difficult to teach to the employees.

Things like revenue per customer or revenue per room must be understood by every person that is in the Guest Relations department of a hotel.

An air hostess who understands the difference in the amount of money the person that travels in business class as compared to the person that travels in economy class is in a better position to deliver the best customer service to a specified group.

Generally, when the right business acumen level sets in within the organisation, employees and managers begin to ask the right questions during meetings and deliberations, There is a high level of discussions that you would have introduced to the organisation that sets things apart.

Many of our managers that are promoted and offered high managerial positions are promoted because of their technical judgement and expertise. Many of them lack the financial expertise, they may be great at other things but may lack the financial edge to things. These are the ones that must be trained to reach better levels of business acumen.

We have heard of workshop mechanics that order a whole lot of new spare parts that cost the company a lot of money. Then later on, the company cries foul because they discover that the old parts can be fixed and upgraded.

Many of these employees must be taught on impact of their decisions Such decisions such as purchase or hire decisions, make or buy must be given training on. Decisions to do with outsourcing are purely financial and need financial experts to conscientise each department.

Sales persons that give discounts may just need a bit of training on the impact of their actions on the business, they may not be really inexperienced or dull.

The employees ability to see the bigger picture can contribute to the profitability of the company.

Till next week, may God richly bless you!

Source : The Herald