Running an organization is challenging, whether it’s a family run small shop, or a major multinational corporation. Many of us start our careers thinking we shouldn’t focus on money, and that enthusiasm and vision are all we need to be successful. We soon learn better. Every organization needs to understand its finances – and if you want to grow your career, you need to develop strong skills in financial literacy and financial capability.
Let’s look at 4 ways financial literacy skills make you a more desirable candidate to employers.
Ability to make smart decisions
Employers want people with the ability to think, reason, solve problems and the ability to understand and analyze situations that are complex and ambiguous. To do that you need to understand business information – and often that means financial information such as budgets, costs, revenue projections, free cash flow and other financial statements. Financial literacy means understanding what that information is really telling you, what the gaps in the information are, what pieces of information are reliable and which are not. Understanding all of that means that you can then understand the costs, risks and opportunities of a situation and make decisions that are right for your organization.
Creditworthy and investable
The ability to produce high-quality financial information is at the heart of being both creditable and ‘investable’. Credit providers are more likely to lend money to organizations that produce regular management reports, investors are more likely to put money into a business whose employees are financially savvy, and donors are more likely to give money to a charity that spends its money wisely and in an impactful way. Having employees with the skills and abilities to perform financial management activities to a high standard enables an organization to access the widest range of finance to keep the organization running, and help it to grow.
Creativity is vital to keeping organizations relevant in challenging environments where change is a constant. Financial literacy means that you can understand the context of your customers or end-users, suppliers, donors, shareholders, competitors, regulators and others whose actions can impact your organization. Once you understand the paradigm in which you and other organizations operate, you can work around the preconceptions. You can use your existing knowledge in a new situation, to make connections, explore potential outcomes and generate new ideas. You’ll be able to help your organization not just survive in a competitive global environment, but help it thrive.
Organizations need to anticipate future trends accurately by extrapolating existing trends and facts, and fill the gaps by thinking innovatively. Financial literacy means being able to anticipate the organization’s future financial needs under alternative scenarios, and being able to assess the risks to which the organization is exposed and prepare appropriate responses. As a financially capable person, you will be able to support your organization to have confidence in planning for its future.
Financial capability is a vital competence for every organization, and for everyone who wants to work for a well-run organization. Whether you are new to the job market or looking forward to your next step up the career ladder, building your financial literacy skills will boost your value and help you to get the job you want, and to do it well.
The benefits of financial literacy go beyond your workplace – once you have gained your dream job with the help of your great new resume, your financial capability will help you to make smart decisions for your personal finances as well – understanding which credit card, loans or mortgages make the most sense for you, and how to manage your retirement savings.
To build your financial literacy, take one of the free courses from ACCA-X, Introduction to Financial and Management Accounting and Intermediate to Financial and Management Accounting.