Does Everyone in the Business Understand Profit and the Bottom Line?

When new employees are oriented to their jobs, the orientation likely covers things like company policies, compensation, benefits, and even details like where the restroom is and how to set the building alarm. What is often overlooked as employees are learning their jobs is helping them to understand how profit, bottom line and the company's financial goals are influenced by the work they do. If everyone in the company, business or organization understands the "bottom line" and the profit goals, they are more likely to feel that their work has a direct impact on the company's success or failure.

Financial information can be overwhelming, and there are those managers who believe that it is confidential as well as confusing. Most companies do share their profit information and other financial details with investors or others in terms of reporting, however. Why not consider sharing this information with employees as well? For employees, understanding how expenses, budgeting and profit margin is influenced by their work, as well as how they can influence the outcomes, can be a good way of helping them feel more invested in the business operations overall.

Consider that the more financial information and education you provide employees (within reason and appropriately, of course), the more valuable they become as employees. Understanding how a business works can be a very good thing for the overall moral and productivity of the operations. Employees are less likely to feel disengaged or to think that management is the enemy if they can see how the big picture affects and is affected by their work. It also puts daily operations in "real" terms for them if they can see how expenses fluctuate or all the external and internal forces that may influence profit.

Sharing profit margins and information, or explaining how expenses affect the bottom line does not have to be major, it can be a slight addition to staff meetings and information sharing. Allowing all employees to be a part of budging process or to at least have access to the numbers can be just one way of educating individuals about the financial aspects of business. Transparency can also be a good tool in building teams of involved employees-if they have a solid understanding of the company's financial situation and how each department, product, service, etc. contributes, they may also be more creative in helping to strengthen both profit and the bottom line.