The goal of any business is to make money. Without consistent cash flow, it will be difficult or impossible to pay employees, pay vendors and otherwise cover the costs of operating the company. To increase the odds that a company is making smart fiscal choices, employees should be trained in the financial aspects of operating a business. Let’s look at a few effective ways to do this.
Pay for Them to Take Business Finance Courses at a Local College
New employees should be required to take business finance courses as part of the company’s training program. This will teach them how to calculate profit and loss, how to calculate the cost of goods sold and how to save money on labor and equipment costs. These classes can be beneficial even if these new hires may not necessarily be making financial decisions for the business today. However, what they learn will help them do their jobs with an eye on profitability as they progress within the organization.
Have Workers Spend Time in the Accounting Department
It may be a good idea to have all of your workers spend a few days or weeks working in the accounting department. While there, they can learn more about how much the supplies that they use in their own department cost. This can help provide valuable insight into ways that employees throughout the company can do their jobs in a more efficient manner.
For instance, a department manager may choose to turn the lights off after employees go home at night or lower the temperature on the thermostat during slow times of the day. A department head may also choose to schedule one fewer employee during the week in favor of scheduling an extra person during the Saturday rush.
All employees can benefit by working with the accounting department because it will teach them new skills. These skills could prove valuable when asking for a promotion or when seeking another job within the company. As a manager or business owner, employee development should be a top priority. By teaching them the financial side of the business, they can save money and develop people at the same time.
Let Your Employees Order Supplies or Negotiate Deals
One of the best ways to teach your people about concepts like the complicated accounts receivable process is to let them actually interact with customers. They should be taught how to collect past due payments with tact or how to create an invoice after a sale has been completed. Employees should also be given the opportunity to cold call customers or close a deal after being given a lead by a manager.
If an employee does close a deal, a manager should go over the terms of the deal with that person. This can be an ideal time to talk about how it impacts the company’s bottom line now and in the future. Ideally, the conversation will focus on items such as profit margin and whether or not the company saves money now or in the future.
Don’t Be Afraid to Use Financial Terms Around Your Employees
The best way to get your workers thinking like business owners is to use business terms as part of the workplace vernacular. For instance, you should always be asking your employees to upsell customers or quizzing them on the profit margin on a given product. By showing that fiscal literacy is a desired skill within the organization, your people will work harder to learn these and other concepts.
You need your people to think and act like they own the business that they work for. By providing the right training, your people will hopefully understand how to take ownership of their work each day.
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