An important element in the training plan of any recruit is to ensure that they understand the financial side of the business. This often helps to increase employee engagement as the member of staff gains a better understanding of how the company is managed and run.
If possible set aside time for the recruit to spend at least a day with the finance department. Time here should be spent running through each financial function of the business.
Legal Entity
The first step should be to explain to the employee how the business is structured. A full background to the types of business there are will help to put this into context. For example, you can explain the differences between umbrella and limited companies, sole traders and various forms of partnership. Furthermore, if the company is a public one time should be spent on outlining both the responsibilities and advantages which are brought about by a stock exchange listing.
Accounts
The success of a business rests on cash flow. All employees should understand the function of bookkeeping within the business and how and why records are kept. If finance is outsourced to a team of chartered accountants the reasoning behind this should be explained.
Every employee will need at some stage to raise a purchase order or expense claim whether it is done on paper or electronically. Therefore it should be explained to them how this is done, who will approve it and when it should be escalated if the decision making process is taking too long.
If the recruit is to be involved in billing clients then the invoicing process should be explained to them. In line with this they will also need to have a clear understanding of the pricing structure used within the business. Furthermore, if the structure is a complex one the reasoning behind it needs to be explained, alongside any options they have for offering incentives or discounts to bring new clients on board. This will be particularly pertinent to sales staff who may spend much of their time on the road and therefore need to have all the information at their fingertips.
If the employee is working direct with clients it is also important to impress upon them the importance of keeping accurate records. An invoice will only be able to be raised if they have written data about what is due to be billed.
Taxation
There are two elements to taxation as far as an employee is concerned. Firstly, they will be interested in how taxation is calculated on their own personal salaries under PAYE. Taxation rates should be explained depending on the person’s salary level. It also needs to be made clear if they have tax obligations because of any employee benefits they receive and whether it is their responsibility to declare it on an individual tax return. They will also be pleased to hear about any tax incentives available such as Cycle to Work schemes.
Secondly, it can be helpful for employees to understand how the business as a whole is taxed and depending how senior they are within the company, what business expenses can be legitimately claimed. If they are to be making any purchasing decisions this is particularly important.
Data Protection
Finally, it is crucial that all employees are made aware of any steps they need to personally take to protect sensitive personal and financial data within the company. This can include: making sure they connect regularly to the network to allow backups to run if they use a laptop; using complex passwords and changing them frequently; and making sure laptops, mobiles and external drives and USB sticks are kept secure when they are travelling.
