Principle Accountant Bolton at Home
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Talking accountancy with non-accountants

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Management accountant and Great British Bake Off 2020 star Makbul Patel explores effective communication of complex subjects with non-accounting professionals.

1st Jun 2021
Principle Accountant Bolton at Home
Columnist
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The other day I opened my fridge door to find something wholesome to binge on. When I say wholesome, I mean sweet and fatty. Rummaging past the carrots (I’ll eat you one day, I promise) and the gigantic probiotic yogurt (don’t worry, I’d buy you again) I saw something which put a dagger in my heart.

Sitting there in the farthest corner of the chilled oasis was my jar of sourdough starter. Created many weeks, nay, months ago with meticulous measurements, love and patience, it had been relegated to the division where mixed spice and herbs-de-Provence reside. A good idea at the time. 

My starter needed rescuing. It was my moral duty as the ‘saviour’ of British baking to revive this starter. One night, sleeves rolled up, I fed the starter and put it to one side overnight.

The next morning showed signs of life. I got on with the sourdough and added the levain after autolysing and leaving it to prove in the Banneton. A good scoring made for a very attractive design and was transferred to a Dutch oven. A Bain-marie was added and 30 minutes later, viola. The tastiest sourdough in the world ever. Well, that’s what my mum said.

Hands up if that made zero sense to you. What on earth is levain? What’s autolysing? We’re making a sourdough, not fixing a PC. And a Banneton, what’s one of those?

This would all be a mystery if you weren’t familiar with the sourdough making process and I wouldn’t blame you if you gave up thinking on the subject as soon as I raced away with the terminology. Levain is the bacteria filled gloop that is active and gives bubbles and tang to the sourdough, ready for use. Autolysing is the patient method by which you gradually add flour and water, leave it to rest, and then repeat. The Banneton is that trendy basket that’s traditionally used to prove the dough, giving it a nice circular pattern.

But, why didn’t I explain this at the very beginning instead of racing into a wild frenzy of strange words? Not everyone makes sourdough. Even if they did, not everyone would seem entirely comfortable with using the words I did. There are more every-day substitutes.

I fear that this is what we as accountants do every time we talk to non-accountants. As a management accountant, I am faced with this trap each time I have a budget meeting - the lack of empathy is all consuming.

I once paired up with a fellow management accountant and we had a group meeting around a table with our services department. One item on the agenda was the number of redundant photocopiers lying dormant with the section and the fact that we as an organisation were still paying for their rental. My colleague at once handed out charts and analyses on the cost and usage of the photocopiers, KPIs and ROCE. The section managers were all very studious in looking at the reports.

The report commentary continued for a couple of minutes and I noticed a heavy silence from the budget holders’ side. No one was even looking up from the reports and glances were being darted from one corner of the A3 report to another.

I interrupted and asked if everyone was following what was being discussed. The replies were slightly muted, as if they didn’t want to appear stupid, but the closest manager next to me shook his head and admitted he was lost. The others said the same, and that is when we accountants had to paddle back and explain the chart in simple terms they could understand. The rest of the meeting was thankfully more involved and there was a healthy dialogue between our two sections.

The photocopiers had to go back, regardless.

In my view, the beauty of management accountancy is that the discipline makes you interact with almost the whole of the organisation. There isn’t a corner left untouched. Each cost centre and each directorate has a financial report to summarise its performance. It is all very dull to the cost centre manager, but alas one of the duties is to have a grip on the variance to budget and the subsequent forecast, which in turn will impact future budgets. It is therefore essential that managers and other budget holders understand what you are going on about.

It’s all well and good waffling on about KPIs that no one understands, but until you have the budget holder hooked onto the numbers there is little chance of getting much information from them.

This is the key element of management accounting, to speak in the language of the listener in order to empower them over their own budgets and outcomes. I have seen management accountants who were absolutely brilliant at general ledger coding and at making the balance sheet, well, balance. When it comes to people skills and communicating with other people, they were hopeless.

I cut my teeth as a cost accountant at a very down-to-earth engineering company. The shop floor was filled with steam, grease and colourful expletives that definitely expanded my vocabulary. It was in this lion’s den I had to mix with managers. Technically they were geniuses in their trade, but show them a finance report and they’d look at you as if you’d just called their mum something rude

The key was communication and speaking at their level to give them ownership of their out-turn. This made my job far easier and afforded me a bit of time to wander around asking stupid questions about bill of materials. This was over 25 years ago, and I left the company soon after. However, I am still friends with many of the engineers.

In the end, the clue is in the title: Management Accountancy, accounting for the managers. Barriers between finance and non-finance can only be brought down with a dose of empathy and simplicity. I’m all up for that.

Replies (3)

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By BrianL
03rd Jun 2021 11:16

Having experienced board members' glazed eyes when scrutinising balance sheets, I once introduced a net worth chart (i.e. a monthly plot of assets, liabilities and net worth) side by side with the balance sheet. It took less than a minute to explain what it showed and what they, mainly non-financial folk, should be watching out for. Example: net worth making a steady dive towards zero. It was universally liked and it gave the non-financial folk an opportunity to ask the FD sensible questions, which they were unwilling to do previously for fear that their question was based on a poor understanding of the balance sheet.
The chart had another advantage: it showed the current position in the context of a time series, helping to eliminate the elephant trap of making two-point comparisons, so common in reports to boards and management teams.

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By SteveHa
04th Jun 2021 08:52

I think the lesson is to "Know your audience". My career started in HMRC, and in my early days I regularly covered the enquiry counter (anyone remember those). I worked in an area with a large subcontractor population (SC60 workers) who, whilst many were probably excellent at their own jobs, needed tax explaining in plain English. This was a skill I learned, and brought with me throughout my HMRC career and into practice when I moved on.

Now, the complexity of my language will depend on who I'm addressing. If a client, knowledgeable about their tax and accounts, there is little need to "dumb down". For those like the old SC60 subbies, yes, I keep it simple. In the office, if I''m responding to a partner I'm happy to reference and quote the legislation.

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By DaveSimon
04th Jun 2021 10:03

"speak in the language of the listener in order to empower them over their own budgets and outcomes."
ABSOLUTELY!
via reports, websites, emails, leaflets, adverts, newsletters, social media, LinkedIn as well as conversations...

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