What actually is ‘Finance for non-financial managers’?

11 July 2016 | Published by AME

Finance for non-financial managers, also known as “finance for non-financials”, or “finance for non-financial people” is a course offered by many business schools and training companies. But, who is this course for, why is it needed and what is its’ ultimate purpose?

We know that most companies have a financial manager – normally this is the person who oversees the accounting department and ensures that the finance function is operating optimally.

The ‘non-financial manager’ is every other manager aside from the financial manager – the sales manager, operations manager, human resources manager, training manager, key accounts manager, factory manager, plant manager etc..

Each of these managers should have financial know-how and business acumen. On a daily basis, these managers will make important decisions that have a major impact on the financial standing of the company. If these ‘non-financial’ managers don’t understand these impacts, the consequences for their department or business unit could be dire. Every manager should aspire to be a ‘financial manager’, someone who has a solid grasp of accounting and financial concepts in order to make better business decisions on behalf of the business.

Finance is a very broad term for the financial skills that a manager requires. A manager should have accounting skills, budgeting skills, be adept at financial ratio analysis, financial statement interpretation and then be able to combine all those skills to make sensible and well-informed business decisions. In essence, non-financial managers need to acquire the financial skills that empower them to exhibit better all-round business acumen.

What do most companies aim to achieve by sending their managers on a ‘finance for non-financial managers’ course?

They are hoping their managers will acquire the requisite skills they need to:

  1. understand how transactions that occur affect the business from a financial point of view
  2. analyse financial reports in order to identify trends that stick out like a sore thumb and merit investigation and corrective action
  3. plan (budget) for the future to ensure past mistakes don’t resurface
  4. Evaluate if a business decision will ultimately enhance company profit

Wouldn’t you be over the moon if your managers had those skills?