Signalling theory is based on the assumption that information is not equally available to all parties at the same time, and that information asymmetry is the rule. Information asymmetries (see also asymmetry issuer/investor) can result in very low valuations or a sub-optimum Investment policy. Signalling theory states that corporate financial decisions are signals sent by the company’s managers to Investors in order to shake up these asymmetries. These signals are the cornerstone of financial communications policy.FINANCIAL COMMUNICATIONS 7:7
3. Financial PR
In Corporate Communications we have an in-depth understanding of finance as well as a broad understanding of communication. This combination reaches its fullest potential in financial PR, creating synergies between IR and PR for listed companies. A company’s reputation may be improved by engaging in proactive media work based on financial information. Similarily, a strong profile in the media may contribute to increased interest from investors. This is best achieved when you integrate your IR and PR work.
Financial PR also includes advising companies within the financial sector, such as banks, fund management companies, brokerage firms and private equity companies. These clients emphasise that communication strategies and activites are founded on financial knowledge and understanding.FINANCIAL COMMUNICATIONS 7:7
What Communication Skills are Typically Needed in Finance?
The field of finance is a number-intensive discipline, making it crucial for professionals to develop adequate communication skills to make their work product relatable to laymen. The financial strength of any organization determines how effectively corporate goals can be met and the overall mission accomplished given the resources at hand. Crunching the numbers and analyzing operational successes as reflected by the data is a critical part of business systems. However, getting everyone on board with strategies based on historical data means ensuring that the information is communicated effectively and in a timely manner.
Financial Experts Need Written Communication Skills
Finance deals with data, but it is important that the financial professional is able to explain the significance of data generated while composing a narrative for the implications and significance of said data. The financial expert should be able to explain trends, patterns and forecasts in clear and coherent ways. These explanations should be concise and information-laden because executives are often too busy to read long reports. Technical report writers should be skillful enough to use jargon when necessary to turn out professional reports. At the same team, it is also the responsibility of the financial team to make sure that reports are readable by laymen.
Related Resource: 50 Best Online Master of Finance Degree Programs 2018
Verbal Communications for Presentations
Small-group meetings, conferences and conventions are typical venues for presenting and discussing financial reports. The financial team may be tasked to create and present these reports to small and large groups. The team should be able to translate complicated data to simpler terms while makings sure that the presentation is interesting to the audience. Even in one-on-one discussions, highly developed verbal skills are crucial to getting the point across and to persuading influencers to get behind a proposal or project.
Nonverbal Communications are Necessary Life Skills
Communicating nonverbally may seem like an instinctive skill, but communicating without words requires that one is conscious of the possible interpretations of certain gestures, facial expressions, body movement and other aspects of physical expression. As a financial professional, it may be necessary at times to adapt a poker face especially when discussing sensitive data with clients and superiors. The old saying that “It’s not what you say but how you say it,” applies very well when discussing financial information. Strive for emotional neutrality whether delivering good news or bad news.
Interpersonal Communications can Move Things Along
Interpersonal communications refer to small-group interactions in a face-to-face setting where the ensuing dialogue may be unrestricted. This typically happens in settings where individuals are already familiar with each other, ensuring that the exchange may be more intimate and discussions more pointed. For financial pros, this is the kind of setting where controversial issues may be settled or transactions are brought to closing, making it important that anyone involved in the financial aspect of organizations is well-versed in the nuances of interpersonal communications.
Chron.com explains how communication skills are fundamental strengths for anyone involved in a business or financial field. The ability to translate technical data into usable information for those who may be unfamiliar with financial jargon is a key skill for finance professionals. Whether one is presenting to a group or persuading an audience to get behind an initiative based on an organization’s financial performance, it is vital to have the written, verbal, nonverbal and interpersonal communications skills to do so effectively.FINANCIAL COMMUNICATIONS 7:7
FP&A… and C: Why Communication is Crucial for Finance
- By FP&A… and C: Why Communication is Crucial for Finance
- Published: 7/26/2016
It may be too early to expand an acronym that’s still in fluid form and not fully defined. However, there’s a case to be made to add a “C” to FP&A. As the role of financial planning and analysis (FP&A) expands, and the importance of soft skills rises, there should be some official recognition that technical skills only go so far. If executives cannot tell their story and influence decisions, they are not doing their jobs.
In a recent AFP FP&A roundtable in Boston sponsored by Peloton, over a dozen FP&A professionals gathered to discuss top-of-mind issues. The conversation quickly turned to the necessary skillset for today’s successful practitioners. Yes, fundamental finance skills remain important, yet most of the discussion revolved around the interpersonal skills, such as influencing and the communication competencies of successful professionals. This was also the case during two previous roundtables in New York and Chicago, as well as countless conversations with FP&A professionals in the United States, Europe and Asia.
“FP&A execs need to be puzzle solvers, not number crunchers,” insisted one practitioner. Although you still need to have the technical competency to get into the weeds, “communication is the key. FP&A needs to be able to communicate back out to the business and leadership.”
Building a business partnership
Good communication skills are also critical in being able to build collaborative relationships with the business. “FP&A professionals need to have the ability to move from the tactical to the strategic, to advocate for the business while sharing the corporate strategy with business leaders. That requires walking a fine line and having advanced political skills,” said the head of FP&A at a pharmaceutical company.
A finance executive from a defense manufacturer agreed. “[FP&A professionals] walk a fine line,” he said. “They cannot just be a bullhorn for the CFO and CEO because that won’t win them the trust of the business leaders. Yet they can’t just advocate on the part of the business because they need to be objective advisers who can say no when that needs to be said, but explain the reasons so their partners understand it’s not arbitrary.”
In fact, excellent communication and interpersonal skills have become a must-have rather than a nice-to-have, as FP&A has pivoted from a backward-looking reporter of what’s happened before to a forward-looking prognosticator of what’s going to happen next. Finance professionals must be able to dig into the numbers, identify emerging patterns and effectively and concisely tell the story of that trend, often visually, and always in a digestible manner to business leaders and management.
According to Rudy Garcia, AVP of FP&A at Sizmek, working with the business is a key role of FP&A that is only growing in importance. “It’s about interacting with each of the heads of the functional areas and understanding what they need in order to move forward,” he said.
William Howell, the FP&A manager at payroll and HR technology provider, Ceridian UK, insists that “communication is at the heart of being able to build that credibility and achieve successful partnership.” FP&A needs to be encouraged to see and know other parts of the business, and some of that communication has to be face-to-face. Even if finance execs can’t visit in person, they should make a point of meeting with business executives as they visit headquarters.
Howell stressed the importance of clearly explaining the budget and the plan in jargon-free terms. “There’s no point in holding people accountable for something they’re not aware of in the budget,” he said.
What sets FP&A professionals apart?
In fact, this ability to speak to business leaders in their own terms, to communicate complex concepts in simple language, to influence decision-makers and drive action is what sets FP&A executives apart from their accounting brethren. While both report numbers, each speaks a very different language. Accountants follow rules and speak in GAAP terms. They rarely need to go beyond “going over” the numbers and their reports follow a strict set of prescribed formats dictated by convention and law.
FP&A meanwhile needs to explain why the numbers are what they are: good or bad. FP&A must show future alternative outcomes and describe each scenario in plain English. Its role is to provide insight into what has taken place and foresight into what’s likely to happen going forward. That requires excellent communication skills and the ability to navigate the trust of business and senior management—not an easy political line to walk.
Hence the “C” in FPA&C.
FINANCIAL COMMUNICATIONS 7:7
Your career in finance – 10 skills that really count
By Robert Half 12 May 2018
It’s no secret that carving out a high-flying career in finance hinges on more than just good grades.
Whether you’re just starting out or you’re an executive with decades of experience, can you recall what led you to this career choice?
In today’s fast-evolving workplace, accounting and finance professionals must demonstrate everything from razor-sharp analytical ability and stellar interpersonal skills, to a sharp understanding of industry-standard software.
So, how do you know whether your resume will reach the top of the pile or is destined to fall short? Here are the top 10 finance must-haves that will put you in prime position for a promising career in finance.
1. A formal accounting qualification
In some industries, sparkling talent combined with real-world experience is enough to land your dream job.
But a career in finance – a sector ruled by rigorous processes and standards as well as commercial best practices – a glowing resume simply isn’t enough.
Successful candidates will have completed recognised industry qualifications to demonstrate they have the necessary educational training to back-up any work experience they have.SEND US YOUR RESUME TODAY
2. Interpersonal skills
There once was a time when finance professionals were bound to cubicles, but that era is long gone.
These days, any perception that a career in finance involves simply crunching numbers has been replaced by the reality that positions require workers to deal with clients every day.
For accounting and finance professionals, the ability to build successful relationships with customers is critical if you want to excel. When looking at two equally qualified hires, interpersonal skills are often the point of difference.
3. Ability to communicate
For aspiring accounting and finance workers, strong written and oral communication skills are important, but it’s just as imperative to be able to explain financial jargon in simple terms.
Many companies choose candidates who can make complex industry language legible to clients who have limited knowledge, as opposed to potential hires who simply regurgitate what they’ve learned.
4. Financial reporting
There’s no denying that financial reporting skills is a requisite requirement, particular with in growing areas such as superforecasting.
However finding candidates with strong financial reporting skills is proving a challenge in this sector.
Financial candidates looking for a competitive edge would be wise to ensure they can demonstrate a high aptitude for financial reporting at their next job interview.
5. Analytical ability
Companies are looking to hire employees who can implement lateral thinking, the ability to analyse scenarios, and draw suitable conclusions. Candidates looking for a successful career in finance must demonstrate their analysis abilities with real-world examples and KPI driven results.
These days, it isn’t enough to have watertight knowledge of systems and processes – it’s also essential to be able to tackle complex problems as they arise.
Whether it’s addressing the financial implications of a complicated business structure or coming up with a personalised solution for a client’s tax dilemma, a record of solving problems will see your career grow in leaps and bounds.SEARCH OUR JOBS TODAY
7. Knowledge of IT software
The increased focus on digitisation and automation has encouraged more hiring managers to look toward financial professionals with the right IT skills to leverage new financial systems.
Candidates who can demonstrate knowledge and proficiency in predictive analytics, accounts payable automation, SAP accounting software or Oracle will find themselves in-demand.
8. Management experience
Although it’s not essential, management experience is often highly desirable for employers looking to hire a financial professional for a new role.
If you’ve proven your ability to manage teams during your career, you’re bound to excel in a leadership position in the future.
9. Commercial acumen
It’s important for financial professionals to understand the relationship between a company’s fiscal behaviour and marketplace demands.
Candidates that can exercise commercial acumen as well as an interest in the trends shaping the industry are well-placed to get ahead.
10. Capacity for innovation
Finance and accounting may be associated with routines and systems, but that doesn’t mean that innovation doesn’t have its place.
Whether you’ve invented a data-collection method that streamlines productivity or a recording process that drives accuracy, candidates who are innovative are likely to stand out.
Do you tick all the boxes for a career in finance?
From brushing up on your financial-reporting skills to cultivating the ability to think outside the box, broadening your skill set is paramount to establishing a career in finance that lasts.
Indeed, if you can tick most of these boxes, you just might be one of finance’s most sought-after professionals.CONTACT US TODAY
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FINANCIAL COMMUNICATIONS 7:7