It has long been established that accountants are communicators or at least should be leaders in business communications. However, I have seen on many occasions where accountants fail to communicate properly.
No matter how good an idea is or how good one is, nothing gets done without the right kind of communication. Hence, the major motivation behind writing this article on financial communication.
What is financial communication? Definition of modern-day financial communication
Financial communications from the perspective accountants simply means delivering on the communication objective mandates. This communication mandate comes from the various users of accounting information system. To meet the business requirements of these users, accountants must improve their copywriting skillset. Below are some components and characteristics of financial communications that accountants need to pay attention to.
Components and characteristics of financial communications
- Fluency in the language of choice: the language of choice in business communication is no doubt figures. Mastering the art of presenting financial information goes beyond simple number crunching. Financial terminologies must be used in a simplified context to make sure that the language does not constitute a barrier in communication.
- Using the right medium of communication: another area that we accountants need to improve on as business communicators is in the aspect of selecting a communication medium and channel. Advancement in business technology has meant that users of AIS now prefer to be communicated digitally rather than in print.
- Communicating at the right time: the various components of accounting information system must work in sync in order to ensure that financial communications are made at the right time and in the right proportion.
- Regulating the frequency of communication: too much of everything is definitely bad. The quantity not the quality of the amount of financial information sent to the users needs to be regulated, else, the negative impact of information overload will set it.
- Effective collaboration: collaboration is the new indispensable soft skill for accountants that when mastered makes a whole lot of difference. Next generation of accountants understands that effective collaboration is a powerful lever that would help them overcome problems that accountants face in this era of information overload. To do this well, accountants needs to start asking ‘how can we communicate better?’ rather than asking ‘why are the recipients of financial information not understanding the information’?
- Speedy and accurate: for financial communicators to live up to the current realities of end users’ quest for Realtime useful information, they must embrace tools that would make them be super-efficient and accurate at the same time. Traditional accounting software that requires period end accounting adjustments may no longer cut it.
- Customized for recipients: gone are the days when simply dolling out generic financial information was enough. End users of financial reports are highly sensitive to how they are being communicated to nowadays. They simply do not have time to sieve through piles of data just to get what they are interested in. coding in accounting has made it simple for financial communicators to send tailored information to end users.
- Building brand equity and trust: it is very important to build trust if you really want to make the desired impact in the financial communication field. Your brand equity is what will really position you in managing customer crisis through a well carved out useful financial communication strategy. Those that are successful in the art of using customers to get customers are those that have taken time to build trust over the years.
Uses and benefits of financial communications
Traditionally, financial communication serves as a core public relations function. Financial communication experts still act as PR agents of the organization they work for. The thing is that the job of these professionals becomes a lot tougher as technological advancement fueled by social media on steroid has made it very easy to spread negative press.
Financial communication has gone beyond being the function of some select individual in a company. Investors now interpret every information that comes out of a company with its financial implications given maximum attention.
Benefits of financial communications include:
- Provision of clarity
- Improves reputation of an organization
- Improves the chance of attracting good investments
- Ensures regulatory compliance