The Benefits of ‘Finance for Non-Finance Managers’ training: Impress your Finance Director with these 3 Questions

As a business owner, it’s easy to get lost in the numbers. Sometimes, you just want to skip through all the jargon and ask your Finance Director one thing – “How much did we make?”

Yet, learning what goes on behind the numbers is just as important as the big number itself. Financial literacy training is about understanding the basics of finance so you can learn to ask the right questions. Next time you sit down your FD, ask these three questions and show you’re a little more clued-up than they thought. 1. What steps can we take to improve our cash flow? Cash flow is often considered even more important than profit. This is because profit can be manipulated in so many ways, while cash cannot. In fact, profitable businesses go bankrupt all the time, simply because they can’t turn their assets into cash when it matters. There are many ways to improve cash flow, as it’s influenced by many different factors, including:

• Methods of financing
• Debt collection
• Dividend policies
• Supplier agreements

Almost every transaction a business makes influences its cash flow in some way, and your FD is one the best people to ask about how to improve it. 2. Is the current funding of the business right? The past few years have been a tentative time for acquiring funding. Banks have been more cautious, interest rates have been choppy and investors have been waiting anxiously amongst unstable markets. However, economic downturns have also been ideal times for capital restructuring. Some companies take advantage by buying back shares at low prices, others negotiate new lending terms and some change their mix of debt versus equity altogether. If there’s room for improvement, your Finance Director will be the one to ask. 3. What is Finance doing to drive the business forward? Accounting and Finance staff are almost always guilty of one thing: looking back instead of looking forward. It happens naturally, because financial information tends to be historical. After all, we can’t tell you the annual profit until the year is actually over! But an increasingly important part of finance is learning to look forward. Instead of just analysing current numbers, ask your FD what is being done to improve future results.

• Are new suppliers being sourced or new systems being researched?
• Are we looking at new pricing strategies to improve our gross profit?
• What changes are being made on the basis of last year’s results?

With their in depth knowledge of your business’s finances, your FD is the ideal person to ask. Colour Accounting™ is our financial literacy course. Click here to secure your place. [traininglist slug=”colour-accounting-normal”]  ]]>