“I don’t do numbers.”
I’ve heard this so many times from public relations professionals. I’m even guilty of saying it a few times myself. However, this avoidant and fearful attitude about all things finance isn’t doing communicators any favors. We need to have a basic understanding of business finance in order to deliver meaningful results for our clients and organizations.
Three Box CEO Amanda Hill and I were pleased to present on this topic at the PRSA Dallas Leadership Class on Saturday, where we shared key concepts communicators should understand about finance.
Learn the Basic Financial Terminology
You don’t need to go to business school to talk the talk. Challenge yourself to learn and understand the meaning of the following financial terms as a starting point:
Revenue / Expense
Asset / Liability
We love Investopedia as a resource for these definitions and other helpful articles on finance geared to non-finance professionals.
Want to test your knowledge of key financial terms? Take this quick quiz to see if you can beat the class high score of 90 percent.
Understand Key Financial Reports
Investor relations professionals aren’t the only communicators who need to know how to read and understand financial statements. A balance sheet and profit and loss statement can communicate valuable information about the financial health of your organization, your clients and your competitors – if you know how to read them.
Don’t know what the reports are or how to read them? Here’s a great overview of the difference between a balance sheet and profit and loss statement.
To practice reading and understanding financial reports, check out the investor pages on your clients’ or competitors’ websites and review annual reports from the nonprofit organizations you support.
Budget Early and Often
It’s important for communicators at all levels to understand the process of creating and managing budgets. Entry-level agency pros need to manage their own time for each client each month against the amount budgeted. Agency leaders need to be able to budget a project for a prospective client, while also keeping agency finances in shape. Corporate communicators manage department budgets, event budgets, agency budgets and more.
If you haven’t had an opportunity to be involved with budgeting in your organization yet, there are a few ways you can build your experience:
Volunteer to chair a committee or event with a nonprofit organization
Look for company-funded committees you can get involved in at your office, such as the social committee or corporate social responsibility team
Ask for an opportunity to manage a small budget for your company, such as a single influencer campaign
Gain control of your personal budget using a tool like Mint.com
Don’t let your fear of finance hold you back in your career. The more experience you get with numbers and Excel now, the more comfortable you will be in the financial space and the better equipped you will be to handle higher-level responsibilities.