• Wed. Apr 24th, 2024

5 Financial Leadership Skills Every Non-Finance Manager Needs In 2024

While you may not be expected to perform complex financial analysis and understand the intricacies of accounting as a non-finance manager or leader, having a foundational understanding of financial management concepts is critical to the success of your operational role.

Finance and budget awareness skills will help you contribute more holistically to your organization, and to the success of your operations, project, or department. Being equipped with financial data and acumen can help you become a more effective leader by strengthening your decision-making skills, enabling you to confidently devise strategies that reduce loss and increase revenue within your scope of work.

Since an organization’s success hinges on its financial standing, setting the goal of acquiring financial leadership skills in 2024 should be one of your key development priorities for the new year.

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Here are five core financial management skills you should add to your personal professional development plan:

1. Basic Financial Concepts

Familiarize yourself with foundational concepts and financial terminologies, specifically the ones used in your organization and industry. Some pivotal concepts you need to be aware of include cost centers, cash flow, purchase orders, key financial metrics, and your organisation’s financial statements and documents.

You can easily obtain this knowledge through undertaking a short course to upskill yourself; key financial concepts can also be learned through collaborating closely with your company’s finance team (more on that later).

2. Cost Reduction

Regardless of your specific role or department, it is every manager’s duty to ensure that unnecessary expenses are kept to a minimum, and that savings are realized to produce a more robust financial foundation for the company. Seek to identify cost-saving opportunities, and regularly assess the impact of your financial decision-making on business profitability targets.

To identify cost reduction opportunities, implement systems that monitor costs (this is especially critical for project managers) and take time to analyze your company spend. Look out for innovative ways to streamline functions, and train your employees to be responsible with company money and be more efficient with their work. Additionally, sometimes a faulty system or machine could be costing you more than you realize, so always ensure your technology and tools are of the best quality and are regularly maintained and updated.

Another way to reduce costs is to think about initiatives that protect the environment. Optimize yours and your team’s use of energy, and think smart about ways to reduce unnecessary emissions while generating long-term savings.

3. Financial Planning

As part of your strategic planning for the new year, make it your goal to familiarize yourself with how to adequately map out the financial aspects of your operations, using the baseline financial knowledge listed above. This will enable you to plan ahead for anticipated expenses and emergency costs, and have a benchmark with which to set revenue targets and KPIs for your team, divided into monthly and quarterly targets.

4. Financial Software

To aid you with your financial planning, reporting, and analysis, you should also learn how to use financial planning software, and develop advanced Excel skills for efficient reporting. Being comfortable with using your company’s customized finance platform, or popular tools such as Sage, is essential so you can access key financial information and analyze accordingly.

5. Finance Team Collaboration

But out of all the skills listed above, perhaps the most essential is effective collaborating with your company’s finance department. Establish a good working relationship with them right from the beginning. They’re your right-hand man in your leadership journey, and can help you uncover financial insights relevant to your role. Your company’s finance team can also show you how to use key financial systems and understand financial terminology, so leverage their expertise to inform your decision making. You can even invite them to key stakeholder meetings to assist with reporting financial data, until you are entirely comfortable and can handle finance-related questions on your own.

Ultimately, financial skills are not reserved for financial leaders, managers, and accountants alone. They’re necessary to some degree in every aspect of your work as a non-finance operational manager, and should always be at the back of your mind when devising new strategies or making decisions. So take time this new year to hone these five core skills, and expand your breadth of financial knowledge, to make you a better leader.

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