Brokerage Ops the April 2018 issue

Read the Numbers

Understanding financial concepts is crucial for managers and sales professionals.
By Elizabeth McDaid Posted on March 27, 2018

What else do they have in common? As a rule, they generally do not understand diddly-squat about finance. We know that finance is the language of business, but if you are not a numbers person, finance can be daunting. However, no matter where you sit on the org chart, it is important to understand terms like EBITDA and net present value.

Without a basic understanding of financial concepts, managers can make ill-informed decisions. Those not comfortable with finance and its language “can find themselves struggling to operate as effectively as they could,” according to management consultant PHS Management Training. Business finance is not rocket science, but for those who do not feel they are good in math, it can be a challenge. This discomfort can hold them back from making contributions that their organization needs. Alternatively, managers who are comfortable with the numbers side of business generally make more informed decisions, operate more effectively and with authority, and are promoted more often and at a faster rate.

A Forbes article, “What Are Your Financial Statements Telling You,” identifies some reasons everyone should understand financial statements:

  • Gain a better understanding of the real status of the business
  • Become more proficient
  •  Improve communication skills with internal and external stakeholders
  • Feel better prepared for presenting business ideas and projects because of an understanding of how to analyze, interpret and challenge the numbers.

Not just managers need finance acumen; salespeople benefit too. Financial literacy is not taught or even thought of as part of the core skills for the business development team. However, it should be, according to Cara Hogan at sales analytics company InsightSquared: “If you don’t understand the basics of finance, it’s next to impossible to sell effectively, explain the financial benefits of your product or even negotiate a deal.” Producers and account executives are often dealing with buyers steeped in finance. It is extremely beneficial to speak in terms that are relevant to them. When you can identify how your business solution has real financial impact, there can be an “aha” moment for prospects as they realize that your product can make a big difference to their bottom line.

When you can identify how your business solution has real financial impact, there can be an “aha” moment for prospects as they realize that your product can make a big difference to their bottom line.

In the LinkedIn article “The Role of Finance in Driving Sales Effectiveness,” Peter Chisambara states that good financial data will allow salespeople to “gain insights about changes in customer behavior which…leads to smarter pitches, shorter sales cycles and opening of new opportunities.”

How can one boost financial acumen?

Rebecca Knight, in the Harvard Business Review article “How to Improve Your Finance Skills (Even If You Hate Numbers),” says, “Stop avoiding finance because you’re afraid of numbers… the math is easier than you think.” The tricky part is the jargon.

The most important concepts to grasp are measuring profitability, EBITDA, operating income, revenue and operating expenses. Immerse yourself in your organization’s income statements. Study the balance sheet.

Reproduce the numbers, turn them into percentages so you can see the breakdown of revenue and expenditures—try to visualize the big picture.


  • Enroll in an online course or community college class about basic financial terms.
  • Review your organization’s quarterly reports.
  • Experiment with the numbers on your firm’s balance sheet.


  • Be intimidated. Business math is relatively straightforward.
  • Go it alone. Identify a trustworthy operations or financial manager who can answer your questions and serve as a sounding board.
  • Overlook the impact of financial skills on your career. If you want to advance, you need financial acumen.

Of course, The Council has your back as well! In May, we are offering a virtual workshop titled “Finance Is Fun.” It will cover the basics of finance, and as the title promises, it will be fun. Check it out at

I spoke to Jeff Lefebvre, the workshop facilitator, and asked for his words of wisdom on why someone should take this course. He said, “Seth Freeman, professor at the Stern School of Business, contends that the financial crisis of 2008 might have been mitigated if managers and leaders weren’t afraid to ‘ask the dumb questions.’ A lack of financial acumen can lead to a lack of confidence in asking the hard questions about why an idea might be good or bad financially. I work with business leaders from a wide range of industries—manufacturers, A&D, insurance, retail. If there is one consistent gap in knowledge across industries, it is financial acumen. And if that means you have leaders who are afraid to ask the hard questions, beware!”

All you liberal arts majors embrace your numbers side. Both you and your company will be better for it.

Elizabeth McDaid SVP, Leadership & Management Resources, The Council Read More

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