Confused by financial terminology? Well, don’t worry you are not alone, as over half (57%) of UK finance workers are too!
New research from AAT also shows that 45% of finance workers have witnessed serious errors in their workplace due to misunderstandings of basic financial terminology. And, many are turning to google, AI and ChatGPT as they find it faster and less embarrassing than asking colleagues.
The top five financial terms that finance workers find most challenging to explain are:
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) (19%).
- Liquidity radio (19%).
- Leverage ratio (18%).
- Accrual accounting (17%).
- Treasury management (15%).
It’s not just making errors that concerns finance workers either – nearly half (47%) are worried that a lack of terminology understanding will result in them losing their current job. Over half (57%) wish it was easier to discuss gaps in financial knowledge with their colleagues or managers, 54% wish their workplaces provided better resources and 50% felt their workplace lacks training.
AAT Business Development Manager (employers), Anthony Clarke, said: “Finance skills aren’t just for those in accounting; they are key for any professional, in any sector. A production company can’t produce a film without excellent budget management, fashion brands can’t host at London Fashion Week without someone getting a firm grip on the costs and no one could secure a loan to launch a business without preparing a cash flow and budget.
“We’re calling on all employers to encourage the communication barriers around finance knowledge in the workplace to be broken down. If more people talk about where they need more learning, the more commonplace it becomes, and businesses become far better at upskilling their workforce.”
