Financial intelligence is required in all fields of the business. Most decisions taken by various managers/executives are in fact financial decisions. Sales manager should have awareness about the financials so that she can make decisions about discounts, credit terms etc. A decision as to the levels of stock to be maintained by the stores manager is a financial decision. Marketing manager should know about the product profitability to decide about the marketing campaigns. An HR decision as to the kind of people to recruit as per
the business priorities is also a financial decision.
So what is financial intelligence ?
Financial intelligence for business is understanding of how financial success is measured and how they have an impact on the company’s performance. For example we need to know the difference between profit and cash. Need to know why the balance sheet balances. The numbers neither scare nor mystify us.
Do you know that one of the major reasons of failure of the organization is
lack of financial intelligence ?
It may sound strange but probability that a company listed in Fortune 100 in 1960 is still listed is just 17%. Greater financial intelligence, we’ve learned, helps people feel more involved and committed. They understand better what they are a part of, What the organization is trying to achieve, and how they affect results. Trust increases, turnover decreases, and financial results improve.