By Tania Ibarra | Photo by Hillary Schave
In today’s fast-moving for-profit and nonprofit world, financial acumen isn’t just imperative for the chief financial officer — it’s a critical skill for any leader. Whether you manage a team, lead a nonprofit organization or run a startup, your ability to understand and apply financial information affects how others view your decision-making, strategic thinking and overall credibility.
The good news? You don’t need to be a money expert to become financially fluent. With curiosity, consistency and a few simple habits, you can grow your confidence and make more informed, impactful decisions. Here are three practical ways to start strengthening your financial acumen today.
Understand and use Your Organization’s Financial Reports
Begin by reviewing your organization’s key financial statements: the income statement (profit and loss, or P&L), balance sheet and cash flow statement. These reports reveal how money flows in and out — what’s earned, what’s spent, and what’s left to support your mission or business.
At first, the terminology may seem unfamiliar, but don’t let that hold you back. Read these documents regularly and ask questions like: Are revenues on track? Are costs rising? What’s our cash position? If you’re not sure, ask a finance colleague to walk you through them. This habit will build your confidence and help you engage more meaningfully in budget and planning discussions.
Tie Financial Insights to Strategic Decisions
Financial information becomes powerful when it’s tied to decisions. When proposing a new idea, don’t stop at describing the concept — explain the costs, potential return or mission impact. Even a simple cost-benefit analysis can elevate your recommendation and show that you’ve considered long-term implications.
Likewise, when reporting positive results — like coming in under budget — share how those funds might be reinvested strategically. Leaders who can connect financial insights to organizational goals demonstrate big-picture thinking, which builds trust and respect across teams and stakeholders.
Partner with Your Finance Team
One of the most effective (and underused) ways to build financial acumen is to collaborate with your finance colleagues. Finance professionals value leaders who want to learn and their insights can give you a stronger grasp of the story behind the numbers. This partnership shows others that you’re committed to leading with accountability and clarity.
You don’t need to become a financial expert — just financially aware. The more you understand the numbers, the more confident and credible your leadership becomes.
