Finance for non-financial managers: from numbers to decisions By Stephanie Oley

Most managers are promoted for what they know about marketing, operations, service delivery or policy.

Then the monthly numbers arrive, and they are expected to explain them, make decisions, and influence others based on them, says CCE facilitator Jeremy Khoh. 'Many of these leaders were never formally taught to read the numbers they are accountable for,' he notes.

This is true for leaders across the private, public and not-for-profit sectors.

These decisions can't just be delegated to the finance team. That's because the managers closest to the work need to understand the numbers well enough to make the call, in partnership with finance.

Why do non-financial managers need financial acumen?

'Conditions are moving faster and getting harder to predict, so what managers plan for rarely matches what actually happens' says Khoh. A chartered accountant and former regional head of finance, Khoh now facilitates several business, communication and leadership courses.

A drop in sales, a funding cut, a rise in costs or a delayed project shows up in the numbers first. What happens next, he says, comes down to the manager's judgement.

The numbers tell you that something has changed. Working out why, and whether it matters, takes critical thinking. The managers who do this well do three things: they identify what has changed, decide what to do about it, and communicate that clearly to the people affected.

- Jeremy Khoh

What does the Finance Course for the Non-Financial Manager cover?

For leaders, understanding finance doesn't mean they need the technical detail of a qualified accountant. That's the premise of our Finance Course for the Non-Financial Manager, aimed at helping non-financial managers to read the three core financial statements, interpret the ratios and turn both into better decisions.

For example, leaders can learn to view the profit and loss statement, or operating statement in the public sector, as a lens for financial performance. This all-important report reveals whether gross margins, operating expenses and efficiency are leading to a healthy profit or surplus. Leaders can also learn the way balance sheets reflect long-term managerial decisions made around assets, receivables, payables and debt. Or that cash flow statements are the most practical way to assess cash available, versus cash caught up in delayed receivables, inventory, or badly timed expenditure.

How is it different from the Budgets and Forecasts course?

Once budgets are set, they need to be managed – the topic of CCE's related course, Budgets and Forecasts Course for the Non-Financial Manager. Here, teams learn common forecasting techniques, how to set a budget, and how to track actuals against it. The focus then shifts to probing and communicating issues such as underspending, leftover funds, or overspending.

They also learn to match these decisions to the original forecast. 'Why did actual results differ from the budget – was it a forecasting issue? Or because of another variable? Is it a timing difference or a permanent one? Once you understand the problem, you can address it,' Khoh says.

Both workshops invite participants to look at different sets of numbers and work in groups to figure out three things: what the numbers mean, what decisions are available, and how they might communicate that most effectively.

'We practise seeing what is happening underneath the numbers, and more importantly, how we effectively move the conversation to what we do about it,' he says.

What does financial acumen look like in practice?

In Khoh's years of commercial experience at multinational firms, the most effective non-financial managers have all had a firm grounding in how their respective functions impact the financials.

'Think of a large manufacturing company' he says. 'Their leaders are responsible for areas such as sales, marketing, research and development, supply chain management and so on. They all have a firm understanding of the financial impact of their division.

'Changes in product demand, input costs, sales or marketing campaigns can quickly impact finances and have a knock-on effect throughout the organisation. By adjusting different levers, the company can respond early and protect its profitability,' Khoh explains.

Arguably, any business era has its challenges. Spiralling wages, operating costs, geopolitical factors and climate change have dominated the business headlines these past few years.

Then there is artificial intelligence (AI), an invaluable new sparring partner for business leaders.

Both courses close with a short exercise in which participants use an AI system to probe their thinking, applying the day's tools to their own role.

'Technology keeps getting better at computation,' says Khoh, whose work focuses on human skills for an AI age. 'What stays with us is the judgement: asking what the numbers mean, deciding what to do about them and communicating that clearly. Those are the skills we practice in the room.'

Through a clearer grasp of the numbers, leaders can make decisions and communicate with more confidence, especially as organisations grow more complex.