Hi Laura, and welcome to the Communities

In my career, I have had three main needs for understanding financial information: understanding the management accounts (a monthly or quarterly profit and loss or P&L) and thus the performance of the business, understanding budgeting and costing new projects.

There are a lot of short courses on finance for non-financial managers but I’d start by getting someone to talk you through the monthly management accounts. You need to understand the terminology, e.g. the difference between gross and nett profit, what is depreciation etc. This allows you to track how the business is performing against the budget.

Probably the easiest way to learn how to put a budget together is to see if you can sit in as you get towards the end of the current financial year for your organisation and observe the process. The same applies for costing a new project but the technique you could learn in advance is how to calculate a break-even point. If you have already gained some familiarity with the accounts and budget so that you can analyse the effect of a new initiative in terms of those, then that might be all you need. If you are involved in costing a new commercial initiative, then calculating or understanding a break-even point is also going to be essential.

For IT, we don’t need particularly high-level skills. Using Excel to work with salaries is one essential: calculating the effect of a pay increase is a frequently needed skill but this year we have also had to use Excel to calculate the effect of putting people on furlough. Sadly, HR people have also needed to use Excel to calculate the redundancy costs this year. This is a bit more complicated than applying an across the board percentage increase as there is a cap to apply to the value of a week’s pay and you also need to separate out how many complete years of service people have at different ages (up to 41 etc).

The other package I find I need increasingly is PowerPoint. We all know it as a package for producing presentations but I find PowerPoint is now often used to create documents where once I would have used Word. It imposes a discipline of brevity.

In reply to Elizabeth Divver:

Thank you so much for this Elizabeth - all of this information is incredibly useful and I'll definitely set to work developing my knowledge and skills in these areas!

In reply to Laura:

Welcome to our Community, Laura :)

Sound advice from Elizabeth
I would add that as you progress in your career you will only be able to act as a genuine business partner to management if you are able to demonstrate that you understand the operational and financial levers that are relevant to the business you are in, and how HR actions can contribute to them. Some examples:
Running a consultancy service is driven by occupying all consultants as much as possible on work that can be charged out to customers. At the same time, experts need to keep their knowledge up to date to be able to sell it. Financial levers here are efficient cashflow and investment in knowledge acquisition.
Running a call centre is about operational efficiency and cost optimisation.
Running a power station is about massive capital investment where return on investment takes decades, so operational efficiency and preventive/corrective maintenance are the drivers.
These different contexts call for different managerial approaches and thus different types of HR contributions.
Wherever you work, spend time with the finance team to make sure you understand how THIS company makes money, not only will you get Brownie points in the eyes of key deciders, but you’ll be better placed to build HR solutions that are appropriate to the business context.

In reply to Steve Bridger:

Thank you, Steve - it's lovely to be a part of the Community!

In reply to Ray:

Some really great insights here and all very helpful information. Thank you, Ray!