Three tips for communicating with your FD

Communicating effectively with your Finance Director (FD) is not always an easy task.

Meetings are often dull and end with reports filled with strange abbreviations such as OPEX, ROI and EPS that you don’t understand (Operating Expenses, Return On Investment and Earnings Per Share, in case you were wondering). However, your FD can be a valuable resource to you and the growth of your business. Here are three quick tips to make meeting with your Finance Director (FD) more productive. 1. Use language you understand Don’t be afraid to use layman’s terms. If you are simply interested in how much money you made this year, that’s how you should ask. Don’t ask for percentage changes in EBITDA when you don’t understand what it is and how it works. If you ask questions in terms you can understand, that’s how they’ll be answered. 2. Don’t just ask for numbers The job of your FD is not to calculate figures – that’s what his staff are for. Your FD’s job is to analyse the numbers, uncover trends, find areas of weakness, make comparisons and then set benchmarks and guidelines for the future. So, try not to ask limited questions like “How much money did we make?” as this provides little insight. A better question might be, “How much did our profit increase from last year and why?” Instead of getting an answer like “We made £25,000,” you will instead get something like “We made £25,000 compared to the £40,000 we made last year. This appears to be because of much higher advertising expenses this year, which increased by £12,000 but did not generate higher sales as we had anticipated.” Asking the right questions will provide valuable insights into your business which can then be used to make improvements. Don’t simply ask for numbers. Ask for trends, comparisons and reasons behind the numbers. 3. Don’t just ask questions, ask for suggestions Your FD isn’t just there to explain debits and credits. Let them know the big picture. If you want to expand overseas, take on more staff, make a big purchase or restructure your capital, your FD can help. He’ll know whether you need better cash-flow, any tax issues you might face, ways of raising capital etc. Your FD will be business minded and is ideally placed to provide suggestions and generate ideas for growth and improvement. Learn to use them less as an accountant and more as a consultant. Colour Accounting™ is our financial literacy course. Click here to secure your place. [traininglist slug=”colour-accounting-normal”]]]>