Every manager must have a thorough knowledge of finance

Role of the managers in an organization:

Managers occupy a key role in any organization. Whether it is the line management or otherwise, the role of the manager can never be underwritten. He is the only connecting link between the top management and the workers below. It is an everyday duty of the manager to take decisions concerning the finance of the company on various operations of the company, on the hiring and other personnel-related matters, budgeting in the company whether micro or macro budgeting. If you have realized we have almost covered all the important processes of a business!

In short, the role of a manager cannot be shortchanged for anything. His role is to overlook every process that is happening in the organization.

Are all the managers financially capable?

Organizations in the past decade have been very particular that their managers acquire soft skills and the ability to make the people work under any kind of circumstance. While soft skills are still considered the quintessential skill for every manager, it has off late been noticed that a lot of operational losses do occur because the managers lack even basic financial skills.

How can the financial vacuum in a manager affect the organization?

Because the manager is the most powerful link between the management and the workers, his actions are considered to have a deep impact on the company. A manager with zilch financial understand-ding can become more of a liability on the organization than an asset because his actions and decisions affect the culture as well as the bottom line of the company.

A bad financial decision can result in

  1. Wastage of precious and scarce resources and
  2. The loss to the company in pursuance of poor financial decisions taken.


Let’s get this straight first:

Being a nonfinancial manager does not in any way mean that the manager is inefficient but what it means is that the company could definitely do better if he is someone with a good foundation in finance. Being familiar with finance can pave way for a two-way communication between him and the finance/accounts department.

A manager that is in touch with the accounts department is definitely in the know how. He can allocate funds for different operation and processes, analyze previous year’s performance vis a vis allocating funds and drawing up newer budgets and planning activities for the present and the coming years.

We cannot stress more the importance of financial knowledge in a manager. There are courses for managers who need to update themselves with financial knowledge and companies are embracing such programs with open arms in a serious bid to fill up the lacuna that there is in its middle management.

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