The Essentials Of Finance And Budgeting

HR Magazine, August, 2005 by Leigh Rivenbark

The Essentials Of Finance And Budgeting

Society for Human Resource Management and Harvard Business School Press, 2005

List price: $39.95, 329 pages

ISBN: 1-59139-572-0

This volume emphasizes the point that by being financially savvy, HR professionals can help their organizations reduce expenses and increase revenues. Financially smart HR practitioners can guard against attempts to cook the books. And when it's time to cut costs, HR professionals who know budgeting can better explain measures such as layoffs.

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The Essentials of Finance and Budgeting offers readers:

* Explanations of what balance sheets, income statements and cash flow statements tell about a company.

* Guidance on understanding different companies' financial statements.

* A primer on the balanced scorecard--a way of measuring performance to provide a "fast but comprehensive" overview of a business--plus steps for creating an HR scorecard.

* A description of accounting fundamentals, including cost accounting, which helps a manager see which operations are contributing to profits and which aren't.

* A look at the workings of the money and capital markets and how companies get financing at various stages of growth from sources such as savings, loans, credit and venture capital.

* Background information on budgeting, with definitions of different types of budgets, tips on estimating labor costs and steps for developing an HR budget.

* Information on cost-benefit analyses and return on investments, including ideas on how HR can use them to evaluate its own potential.

* A definition of "human capital" and how to measure it.

The book helps HR practitioners devise personal plans for developing financial know-how, and it contains advice on how to create positive working relationships between HR and the finance department.