Let’s face it: not everyone is thrilled to handle income statements, balance sheets, and anything else that might involve a calculator. It’s natural, and you’re not alone. When you set up your company, you might have thought something along the lines of letting an accountant handle the financial side of your company. You might have hired one or two or even an entire team of accountants to make sure that they can handle anything that might be related to your finances and accounting. While it may have worked for so many, there’s one pitfall to this plan: letting accountants and third-parties handle your finances can leave you vulnerable in more ways than one. You are risking your company’s lifeblood, and you are allowing yourself to be woefully unprepared in terms of your financial decisions. This is why companies of all sizes may need financial education.
The hands-off approach to the financial side of your company can only do so much until you’re forced to learn it anyway. By then, you might already be facing challenges that could risk your company as a whole as well as everyone’s paychecks.
As such, to help you take the step you need to understand your finances better, here’s an overview of what you might expect when receiving financial training.
Acknowledging the challenge
The first step to coming face-to-face with something you might be hesitant to try is to acknowledge the challenge. You need to come to terms with the fact that your company needs you to learn even the basic ins and outs of your financials if you want to make a positive change in this department, maintain your financial health, and make better spending decisions.
Enrolling into a financial training program, whether formal or introductory, can help you not only acknowledge the challenge but also tackle it. Such education can help ensure that you’re learning the right financial terms and that you’re putting your new skillset into practice exercises before you apply the strategies to your own company. Essentially, you will learn to recognize that handling and understand your finances isn’t so much as a challenge as it is that you were simply kept in the deep, dark unknown.
Recognizing the importance of financial knowledge
The second step to learning how to handle your finances is to recognize why you need to learn it in the first place. In this step, you are acknowledging the benefits of knowing what an income statement or a balance sheet is. For instance, your income statement details your expenses and profit over a specific period of time.
Knowing how to look at it means that you will be able to tell how your company is doing in terms of its financial performance. This knowledge helps in motivating you to either implement better business strategies or maintain the ones responsible for your increased financial performance.
Taking matters into your own hands
Once you have acknowledged the challenge and recognized why you need face it, the next step is to take matters into your own hands. This step starts the moment you enroll in educational or training programs that teach you the basic mechanisms of the financials. It continues as you participate in each class and put in the effort to actively learn what is being taught by doing the exercises that should be provided or studying cases that may remind you of your company and your situation.
This step is where you gain financial literacy, which can ultimately help you secure yourself from ill-intentioned accountants and identify any other threats to your finances, including your own business strategies. Remember that it takes time and effort, and, in the best case scenarios, a little bit of money.
Maintaining your financial health
The final step to learning the financials is applying what you have learned to your own company. At this point, you should have been able to build the confidence to look at your cash flow statement and balance sheet and not be completely lost on what any of it means. This little bit of knowledge comes a long way as it is what will help you gain the experience you need to become more knowledgeable on the subject matter. You should also know that at this step, you will be more conscious of the factors that can affect your financial performance and health. As such, you can make better financial decisions, whether in terms of your day-to-day expenses or in your marketing efforts, among many others.
In our 90-day MBA, we help you go through each of these steps in the simplest, most informative way possible. Our goal is to demystify the financials to empower you enough to know what your financials looks like, understand what the basics mean, and keep your company afloat.
Master financial management with ACCA L.E.A.D
The ACCA L.E.A.D. (Leadership, Excellence, Achievement, Development) Program is designed to teach you how to master your financials in just 10 weeks. This fully digital program equips you with the tools you need to understand and improve your financial statements, connects you with leaders nationwide, and shows you how to grow your bottom line — plus, enjoy lifetime access to all the course materials.
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