Any business enterprise makes use of financial as well as nonfinancial data for its operations. The persons who manage a business make reports on the performance of it with the help of financial and non-financial data. Both the aspects of the business have to be covered. Finance for non-financial managers is therefore a necessity to carry out business operations.
The performance of a company and its employees are measured in terms of several financial and nonfinancial aspects. The use of financial measures to evaluate company performance makes management compare the net income of the year with that of the earlier years, and review the current ratio. The non-financial measures used by the management to evaluate the performance of the company include taking count of the number of defects from the manufacturing process or the sales quantity for the period. To cite examples, a financial performance measure for an employee would be the debtors balances solicited and cash received on delinquent accounts for the company. A non- financial performance measure for an employee would be the customer targets achieved.
Marketing is the technique by which products are sold for the business, and it is carried out by the marketing department. The marketing department makes use of financial and non-financial information to form it strategy to carry out its marketing operations. Financial marketing information includes targeting products for sales by sales dollars, and non-financial marketing information includes covering the sales territory for the products.
The monthly performance results that are non-financial and financial are required by, the managers and department heads respectively, and the owners. They require this to know how the company has been making progress, and the financial health of the company mainly. Financial information has to cover the sales figures, profit figures, cost figures, outstanding for the month and the stock if any. Non-financial information includes sales figures in terms of product quantities, stock in hand, employee performance.
Any business would require setting a goal for achieving the required results. The goals should be realistic so that they are achievable by the employees. Financial goals for a marketing manager would be to increase the sales in dollars of the products, and the nonfinancial aspect would be to reduce the overtime working hours of the employees.
It can be seen that the finance for non-financial managers are also part of the job of managing.