The finance report is in. Numbers are going up and numbers are going down.
Turn the page. More numbers. Turn the page. And you just feel blank.
Sometimes fear sets in as the expectation for your participation grows beyond your perceived capability. Maybe no-one will ask you what you think, or maybe they will.
Getting to that part of the meeting where the finances are discussed can be a stressful feeling for many executives and managers without an accounting background. And it’s not just the numbers that can cause confusion. There are financial words and lingo that often don’t make sense. And to make things worse, the finance folk love to cram information on a page in 7-point font so it’s even trickier to decipher what’s going on.
Learning accounting and finance can be a bit like learning a language. It takes a little practice and time. But, here are some tips to help you put fear aside and start adding value to discussions on the numbers.
Detailed information to be discussed in meetings for decision should ideally be sent out well beforehand so people have time to digest it. Get on the front foot and ask your finance people to do this. Even a 10-minute review of the numbers before you enter a crowded meeting gives you time to think more clearly. It sounds simple but I’m still amazed how seldom this happens, leaving committee members and project teams blank-faced in meetings unable to comment.
It’s bad enough having to deal with the operational lingo associated with the industry you are in. Add into the mix accounting lingo like WDV, IRR, NPV, CAPEX and OPEX (just to name a few) and you’d be utterly forgiven for feeling confused. Even something as seemingly simple as an asset can get referred to in up to ten different ways! No, you weren’t supposed to learn lingo by osmosis. Get the ghostbusters outfit on. Meet up with the preparer and demand some explanations!
It’s really hard to get meaning from financial information without making comparisons. Quite often you’ll be looking at profit performance of a project or business area showing variances to forecast. Unless you have a good feel for what you were expecting (the forecast), variances to actual results are difficult to interpret. Get behind the forecast. Focus on the concepts, not the detailed calculations. What were the assumptions? What were the methodologies? More often than not the assumptions will be based on things that make sense to you – volume, prices, and probabilities of certain events happening.
4. Ask questions
Don’t assume that the only way people add value in finance discussions is when they triangulate multiple financial data points and comment on an earth-shattering insight. Sometimes adding value is about asking a simple question that results in some hearty discussion around the table. And, if you’re a newbie at commenting on the numbers it’s an easier way to start. Trust your instinct. I’ve heard simple questions like “What’s this number made up of and why is it so high this month?” lead to major business issues being uncovered.
How often are you part of the discussion on the numbers? Do you sit silently at the leadership table or project meetings wondering what to say?