Financial Acumen: the key beyond decision making

Financial Acumen is the ability to recognize accounting and finance issues. It is taken into consideration to make decisions and to improve the ability to perceive the financial implications. 

 

How to improve the financial acumen:

You can improve your acumen by training, so you can join the improving training courses in different places around the world. For instance, you can join accounting training courses in Istanbul, Dubai, or anywhere that can provide valuable training. 

 

To improve your financial acumen, you need to get to know the financial and accounting terminologies; which create a common language about financial issues when discussions. Financial terminologies include accounting, cash flow, budget, income statement, assets, opponents, pricing strategies.

 

·       The knowledge of financial and accounting terminologies alone is not enough to possess financial acumen, but you need also to possess many skills as well, such as: 

·        Managing receivable and payable accounts. So, you work on managing and following up the liquidity for receivable accounts collection in addition to the payments of commitments before considered overdue. 

·       Managing assets where a premium of assets depreciation is calculated and the assets are sold at the right time or rather exchanged afterward. Plus, when you have this skill, you can tell whether the maintenance of assets or the maintenance resulting from the disregard for maintenance procedures is more effective.

·       Financial statements analysis such as the budget, income statement, cash flow statements, and budgeting which converts the strategic plans into financial statements.

 

Training alone is not enough for improving the financial acumen, you should also work on skills and knowledge relevant to financial acumen to improve it. So, you can join conferences and discussions that address the financial aspects of the decisions. Reading about financial Accounting and Reporting is helpful, as well.

 

Decisions led by financial acumen :

Financial acumen leads to the concept that says financially successful decisions do not necessarily achieve the best profits. Actually, financial success is beyond profit maximization because the decisions affect other financial aspects. For instance, your decisions can lead to increase profits then liabilities, as well, with deadlines that can’t be met. Then you put the organization at risk of bankruptcy.

 

Moreover, the decisions can’t be only made by recognition of the financial aspects in the short term, but also in the long term in order to preserve sustainability for the organization. 

 

After all, the standards of decisions led by financial acumen vary between the organizations according to the strategy applied by the organization itself. For instance, different kinds of decisions led by financial acumen depend on if the organization is looking at increasing investments further than profits at the current time or increasing profits.

 

The importance of financial acumen training:

When you have financial acumen, you can think about the big picture in making decisions. So you recognize the implications resulting from the decisions. Eventually, you’ll be more efficient at risk management that’s relevant to your work tasks. You need to know that financial acumen: is the roadmap to business success.

 

When you have financial acumen, rational judgment strategy is improved in the process of making decisions in addition to the discussions with the other departments, the finance department, specifically. That can facilitate the discussions on financial issues by using the common language which engages the discussants in an understanding discussion environment.

 

If you are not at a high level of acquisition of financial acumen, you can’t recognize the financial objectives set to be achieved nor do you work on the follow-up and assessment process that are required to achieve the objectives.

 

The higher position you have, the more inclusive objectives you are to achieve and the more implications result. In other words, the implications of decisions you make get increased when you are in a higher position. Hence, improving the financial acumen is important to make wiser decisions for the sake of organization sustainability in achieving objectives.