A Guide to Finance for Non-Finance Managers

Regardless of your managerial level, having a baseline understanding of finance is essential to your position. Learning the foundations, including budgeting, creating financial statements, and dealing with a balance sheet, will help you gain a better understanding of money management.

The skills that you will pick up will help inform your decision-making at every feat. So, how do you learn finance for non-financial managers?

Although non-finance managers shouldn’t expect to know all of the ins-and-outs of financial management, getting educated in a few key areas could help them to build their careers.

There’s an art to making well-informed business decisions. Budgeting plays a major role in decision-making. Put simply, if a business doesn’t have the funds for a certain project or task, it cannot happen. Learning about how financial statements work will allow you to develop an overall strategy that supports the company’s growth and development.

While financial professionals are well-versed in ratios, expenses, and outgoings, chances are you are not. When you’re learning about finances, the balance sheet will be your first port of call. Getting to grips with the company’s expenses gives you an overall picture of where the business can afford to spend. Having an understanding of these fundamentals will likely change the way you approach different areas of the business world.

At a glance, you need to be able to look at an income statement and understand it. You don’t have to be a financial professional to know how to manage this. Whether that means using an Excel spreadsheet or another system, understanding revenue will give you an idea of how an individual or the entire team is performing. You should be able to take a look at a cash flow statement and determine whether the team is currently on target.

It doesn’t matter what managerial level you currently hold. Budgeting matters more than you might expect. Knowing the basics of a profit and loss account is an excellent place to start. Getting your head around these intricacies means that you won’t continually have to verify budgets with senior management. Instead, you can become more independent in your approach. Having that autonomy could help you to support the company’s financial health.

You might find financial information overwhelming if you’re not used to processing it. There’s nothing to say that good managers naturally have a talent for management accounting. If you’re finding it tricky, it’s worth learning more about it. 

Gaining a sharp level of financial literacy could make all the difference to your career. You can have all the management skills in the world. However, if you don’t understand how it affects the working capital, that could be a problem. Let’s break down the reasons here:

As a manager, it’s your job to make properly informed decisions. You cannot do this without having some understanding of corporate finance. The more you learn about this sector, through finance for non-finance managers training or other routes, the better equipped you will be to accurately suggest areas to focus on or pull back from regarding revenue generation.

You might utilise cash flow forecasting, for example, to determine the areas that are lacking. Adding this to your repertoire is a huge bonus.

It doesn’t end there. As a business leader, you will already be comfortable using key performance indicators (KPIs) to monitor your team’s progress. Having a knowledge of finance allows you to be more ambitious in goal setting. 

Armed with that wealth of information, you can reflect upon the overall financial direction of the company. Aligning your team’s goals and targets with that makes a massive difference to whether they work. 

Knowledge in this area can give you insight into relevant financial accounting for your business and help you with risk management in deciding which direction to take your team or section of the business.

Having the right management skills allows you to collaborate with c-suite executives. If you have the right level of financial knowledge, you will be able to speak their language. 

If you’re looking to get ahead in the business world, showing that you have this expertise is one way to get started. You can present and discuss financial reports, help explain financial performance and give them the information they need to feed back to stakeholders in the business.

Whenever you’re presenting ideas or pitches to managers, you need to back up your points. Managers may ask you, “why does this move benefit the company?” If you have a level of financial literacy that gives you more information, you can share it with them.  

Being able to share the overview of the cash flow statement or simply a loss statement shows that you are paying attention. This approach works whether you are working for a start-up or a fully-fledged business.

Ready to get started and improve your business finance knowledge? There are plenty of ways you can learn finance for non-finance managers. Look at some training courses and webinars for beginners, or ask about in-house schemes. Alternatively, there are online courses in finance that will help you learn the skills you need to excel. 

Online training and Finance courses for non-finance managers are the ideal way to learn more about the skills you need whilst ensuring you don’t spend too much time learning about topics that won’t apply to your role. 

When you get started on this journey, you never know where it may take you. You may have a natural flair for numbers and forecasting that leads you to kickstart a career in finance. At the very least, having a better understanding of budgeting will set you apart from similar leaders and make you stand out.