skip to navigation skip to content

Compass

 

Senior management? Don’t understand finance? Don’t panic, there is an answer

Cambridge Judge’s Finance & Accounting Programme for Non-Financial Managers aims to demystify the dark arts of accounting.

Decisions about the future

Every organisation aims to paint a rose-tinted picture of its finances. It’s vital to maintain a healthy, confident profile for your customers, partners and competitors – and of course your employees.

But if you’re part of that organisation, it’s useful to know what’s really going on – and if your role in the business is non-financial, it can be difficult to assess just how well the company’s actually doing.

If you don’t know the difference between your assets and your reserves, or what goodwill really means on a balance sheet, you’re not alone, says Dr Jenny Chu, Academic Programme Director, Cambridge Judge Business School. “You’d be surprised how many people who have reached senior positions in organisations and either don’t have a baseline knowledge of finance, or believe certain financial terms mean one thing, when in fact they mean something completely different,” she says.

“There’s no shame in that if you’ve never had the opportunity to learn it – the language around finance can seem impenetrable – but if you can acquire a bit of an understanding it will help you to understand your company better, communicate across the organisation and, if you need to, make much better informed business decisions.”

Neil Green describes himself as a “solutions engineer, a technical pre-sales resource” for his employers Salesforce, but realised that without a broad grounding in accounting and finances, he had no real idea of how the company was truly performing. “I work for a US company and, as with many firms, whenever they publish their quarterly earnings call there’s a lot of terminology and complexity in the way the figures are reported. I didn’t doubt we were doing well but, if you’re not an analyst, it’s more difficult to know what’s really going on. I wanted to be able to take the earnings transcripts and be able to understand the figures in more detail.”

The programme introduces the basics of accounting and financial analytics, exploring how these integrate into an organisation’s overall strategy and explaining the potentially baffling terminology. “These concepts underpin and inform business decisions,” says programme lecturer Chu. “If you understand that, you can use that knowledge to dig deeper into your own organisation, to challenge and to question from an informed standpoint.”

The programme combines lectures with an opportunity to work on real-world scenarios, individually and with other participants. “Understanding how you apply that knowledge in an actual situation is invaluable,” says Green. “You don’t need to be a mathematician. It’s about the concepts, what the columns mean and how companies report their assets – is this a product now, or a service later?”

Fellow student David Williamson says he was “surprised” at how much content the course covered in two days. “From the use of accounting information at the start of day one, we were looking at detailed ideas around value creation and value-based management by the end of day two,” he says.

Williamson, who is public affairs director for the Scotch Whisky Association, said his increased budget responsibility inspired him to “get a grip on the basics of accounting and financial analysis”. He adds: “Completing this course means I now know what to look for when assessing financial information, as well as the right questions to ask. The course has certainly given me more confidence in managing a budget, interpreting and understanding the information decisions are based on, and to ask challenging questions when necessary.”

And as with all CJBS courses, the other students bring fresh perspectives to enhance the learning experience. Says Chu: “Our students have included people in the NHS, factory workers, small businesses, large corporations – the individual businesses are very different but the concepts remain the same.” Green agrees: “During my CJBS modules I have worked with people from organisations from Nigeria, the Philippines, Russia – and it all adds new perspectives.”

And of course a financial grounding has many applications. “I’ve just become a school governor and am on the finance committee,” adds Green, “so can now understand the treasurer’s figures to see if we are making valid use of the money for the benefit of our pupils. Who knows where your career will take you? I might be involved in a small startup or work for a huge multi-national looking at figures the finance officer puts in front of me. I’m not saying I want to be CFO – indeed it would be very unsafe for anyone to put me in that position! – but to know what you’re looking at enables you to ask the right questions.”

And the more people who understand how their organisation’s finances work, the better for everyone, says Chu. “If everyone knows broadly what’s going on there’s more opportunity for open discussions and better communication between departments. Financial planning is the language of business – things are much easier if we can all speak that language.”

Green believes there’s no better place to learn it than at Cambridge Judge. “The tutors are world-class, not geeky but capable, engaging presenters,” he says. “And all the while you’re in Cambridge – there’s something about the feel of the city, such a relatively small place but with so much knowledge. That goes into the classroom with you, that feeling that you are part of a so much bigger educational community.”