You may have had an experience like I had recently. I went to see a medical specialist several weeks ago. While I am not particularly dumb, I did not get as much from the conversation as I could have. Not because I did not care, it was just a world I did not operate in. The terms were unfamiliar, and the significance of the symptoms and the possible solutions were all abstract to me. I was unable to determine which results were most significant. When given a choice of tests to have completed, I did not have the knowledge to identify what was the prudent approach. After leaving the doctor’s appointment, I could have learned more from the appointment and made better-informed choices on how to proceed if he and I were speaking on the same level.
How does this relate to accounting? Like me not being fluent in hematology, sometimes our audience is not fluent in accounting. There can be issues that seem obvious to us as someone who spent years in school and industry that others have not picked up on. It is not enough to share the information. The receiver must understand the implications, the choices, and prudent future action.
As accountants, we need to communicate the significance of numbers, trends, opportunity costs, and ratios so that the user understands the importance of those results. This will enable us to pass the user the insights we have acquired and honed over the years. As an expert in accounting, the transfer of knowledge is only complete when the person receiving understands the significance and impact of critical decision points and the possible risks and benefits we see based on our training and insights.
Communicating financial data to non-accountants or even other accountants who need to become more familiar with the underlying data can be improved by focusing on several aspects of communication.
Tailor To The Users Needs
Users of financial information have different interests and needs for financial information. A banker, an owner, and a project manager have different requirements for financial information. While the underlying data is the same, a presentation should be customized to the recipient’s needs.
A loan officer evaluating a line of credit is going to have a different perspective and needs than an owner who could consider the taxable income effects for the year, which would be different from the project manager, who could need a more detailed understanding of the underlying transactions related to a subset of information related to a company initiative. The underlying data is the same, but the information presented needs to be tailored to the user’s needs.
For accountants, as with other professionals, jargon is used as shorthand and efficiency in speaking to others familiar with the terms. Concepts like accrual basis, EBITDA, ROI, and gross margin can be unfamiliar terms or intimidating to those outside the accounting profession.
If unsure of the receiver’s knowledge, one is best served to err on the side of less jargon to improve the opportunity for the information to be fully conveyed. Even within the financial profession, different industries can have different jargon or catchphrases that can impede someone’s understanding outside.
Leaders Do Not Want To Appear Unknowledgeable
Leaders may need help to grasp the information being conveyed fully but are unwilling to ask for clarification. Some may not want to appear unknowledgeable or feel they can grasp the concepts without understanding the terms.
Consider the knowledge of the person receiving the information. Are they familiar with the terms being used at a level sufficient to utilize the information being presented? As accountants, we have a significant amount of knowledge and insight. Still, that insight is of value if we can convey that information to others in an understandable format.
Ease Into The Difficult Issues
As accountants, we may present the bad news first. Accountants are generally risk-averse; the most critical item is the negative aspects that must be addressed. Negative trends may be what we want our listeners to focus on, so we start with those topics to make sure they are presented.
For the information receiver, starting with a negative can turn users off from receiving the information.
The person we are presenting to is receiving the information for some reason, such as needing to evaluate their past decisions for adjustments based on changes. Human nature is persons prefer to avoid having their errors pointed out and can tune out critical or uncomfortable information. An approach to minimize the audience tuning out can start and end with positive information. The recipient still receives the required information, but it sandwiches the less favorable issues between news that is easier to receive, thus keeping the receiver engaged.
The Curse Of Familiarity
The people we present information to may not be as knowledgeable as us, the experts, with our accounting degrees and backgrounds. As accountants, we may have attended college for several years and passed the CPA exam.
We may have years of experience in the business industry, and we likely have an affinity for numbers. We can look at financial statements and numbers; meanings, causes, and future impacts may jump out to us. That may only be the case for some of our audience who use financial information to make decisions.
Unless the user is managing an accounting practice, it is unlikely accounting is their native language or the reason they went into business. As professionals, we must consider the knowledge base of the person or persons we are working with who are likely less familiar with accounting concepts and the underlying data. They may have other areas of focus which preclude them from being as familiar with the data, trends, and ratios.
Make It Memorable
Individuals outside of the finance department may find numbers boring or insightful. Presenting number after number can cause some users to lose focus.
Conveying information in a story can help users understand, stay engaged and remember. In presenting changes, it can be helpful to remind the user what decisions resulted in the change. What was expected, and what external factors affected meeting or not meeting those expectations?
Numbers, ratios, and trends change over time. A story can often be told to explain the change. The value in those stories can be the key for the information to be understood and retained by the person receiving the information as opposed to presenting this number becoming this other number a year later.
Like a story, a picture can make information memorable. A graph or chart demonstrating trends or changes can turn financial information into a format that can be more easily understood and remembered. This can be especially useful with users who need more fluency in financial data.
As accountants, we can overlook users outside the finance department who may have different education, experiences, talents, and ways of receiving information. It is vital to realize others may need assistance to gain the background to interpret the details, causes, and trends of the information we manage. We are there because of our expertise. If we are not considering our users, we are doing a disservice by not communicating information as effectively as we could to users.
Professionals need to consider how specialized they have become over the years. Things that are intuitive based on our background are not the same places our users are from. Consider your audience when presenting information.
It will help you be more successful in passing along insights and make you a more effective communicator of information to your audience.
These are just a couple of ways you can help improve your communication skills.
Contact Protea Financial today to see how our communication skills can help your business!