How Much is Financial Illiteracy Costing Your Tech Career?


By Heather Tenuto

After a long and successful career climbing the ladder in the tech industry, I had my eyes on a Chief Revenue Officer role. When I asked my boss how I could get it, he gave me some tough feedback: I was lacking the level of financial literacy that the job required. I was devastated and embarrassed but not defeated. I went back to school and learned the skills I needed and earned the CRO seat.

My story is not uncommon. Financial illiteracy in the workplace is pervasive, though often undisclosed. Eight in 10 people never learn about finances in school, according to a 2021 Oracle Survey.

If you don’t work in a finance role or aspire to one, you may assume it’s OK to glaze over or multitask when the finance team breaks out the numbers-filled eyecharts, but that may hold you back from getting other leadership roles you desire. Basic literacy in finance and accounting principles can help you succeed in any area by improving your decision-making, negotiation and leadership skills.

In this blog, we’ll discuss the consequences of financial illiteracy and the steps you can take to become financially literate and advance your career.

What is financial literacy?

Financial literacy is understanding financial terminology, statements and concepts and, more importantly, knowing how to use this information to make sound business decisions and improve your organization’s financial success. The first step into finance and accounts may feel overwhelming because there’s a lot you need to know. However, once you understand how your line of business impacts decision-making at the top of your organization, it will all come together and you, your line of business and your company will benefit.

What are the financial reports you must know?

To become financially literate, you’ll need to become familiar with standard financial reports that provide information about a company’s financial performance, position and cash flows. Get to know these three financial statements, which are the foundations for understanding the financial health of your organization:

  • Balance sheet – This is a snapshot of an organization’s financial position at a given time. The organization’s assets (cash, investments, property, equipment, etc.) are listed against the organization’s liabilities (loans, accounts, taxes owed, etc.) and equity (retained earnings, common stock, etc.) The sum of a company’s assets should equal the sum of its liabilities and equity.
  • Income statement – Also known as the “profit and loss statement,” an income statement looks at a company’s revenues, expenses and net income over a specific period. The income statement is where you see how your work impacts the top and bottom line. Understanding what measures are most important to your company and how your work impacts those results will make you a much more valuable asset.
  • Statement of cash flows – As its name suggests, the statement of cash flows shows a business’ inflows and outflows of cash over a specific period. They are divided into three sections: operating activities (i.e., day-to-day activities), investing activities (i.e., investments in long-term assets) and financing activities (i.e., borrowing or repayment of debt and issuance or repurchase of stock).

 What are the financial processes you must know?

In addition to financial reporting, you’ll need to become educated on key financial processes that you use to make business decisions, such as where, when and how much to invest in people and tools. Using these processes to ground your business plans or resource requests in data will make them much more compelling.

  • Budgeting and forecasting – These processes assist organizations in understanding and managing their financial performance.
    • Budgeting – A budget outlines how your company will allocate resources (e.g., labor, materials, capital, etc.) over a specific period. Budgets typically include information about revenue, expenses and net income.
    • Forecasting – A forecast is an estimation of your organization’s future financial performance based on future conditions. Many factors can impact the accuracy of these reports, including market conditions, customer demand and unexpected events.
  • Managing Cash Flow — To help ensure financial success at your organization, you should understand the following cash measurements:
    • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization looks at your company’s earnings before calculating interest and taxes, along with non-cash charges, such as depreciation and amortization. Understanding EBITA is especially important for companies considering mergers and acquisitions as valuations are often based on a “multiple” of EBITDA.
    • Operating Cash Flow:Listed on a statement of cash flows, operating cash flow is all cash generated and used in business operations and indicates whether your company can pay its bills.
    • Free Cash Flow:Free cash flow is how much money is available to distribute to investors or reinvest in the business after all expenses are covered. It’s a strong indicator of your company’s profitability.
  • Financial Analysis – A financial analysis evaluates a company’s financial performance, position and cash flow to make informed business decisions. Two primary studies include:
    • Ratio Analysis – A ratio analysis compares different aspects of a business’s financial performance, like profitability, liquidity and solvency.
    • Trend Analysis – A financial analysis examines areas of strength and weakness and compares them against industry benchmarks and competition.
  • Cost-Benefit Analysis – A cost-benefit analysis helps you evaluate the financial viability of different business decisions by comparing the costs of a particular course of action or investment with the expected benefits. There are two types of cost-benefit analyses:
    • Tangible Costs & Benefits — Tangible costs and benefits are quantifiable and easily measurable. Examples of tangible costs include expenses for upgrading hardware and software or hiring new personnel. Examples of tangible benefits include a reduction in cost-per-unit or an increase in revenue.
    • Intangible Costs & Benefits — Intangible costs and benefits are qualitative and difficult to quantify. Examples of intangible costs include the loss of employee morale or damage to the brand. Examples of intangible benefits include an increase in customer satisfaction or an improvement in business processes. 

What are the financial skills you need?

Knowing basic financial reporting and analyses is a great first step. But you’ll also need to back those up with additional financial skills to help you manage and navigate important financial decisions.

  • Analytical Thinking – Business leaders are highly interested in team members who can analyze and interpret information in financial documents.
  • Financial Decision-making – The ability to apply financial data to make decisions that create value for the firm and align with financial priorities is pivotal for any leader.
  • Communicating– Knowing finance is half the battle. The other half is communicating financial information effectively and clearly with team members inside and outside the finance department. For non-financial audiences, for example, you may need to translate complicated jargon into simple terms.
  • Investing – Your company leaders are likely looking at new opportunities to sustain long-term growth. Helping your organization decide where to invest resources based on well-reasoned advice and data can be invaluable. 

What is the benefit of financial literacy on your ability to perform your job?

Once you’ve learned these documents, processes and skills, you can bring them into your job and apply them with the following benefits:

  • Make Informed Business Decisions ­­– Confidently consider the financial implications before making a decision.
  • Build a Business Case – When you need a project budget, you can prove its impact on your company’s bottom line, making your case more compelling.
  • Improve Negotiation Skills – Whether you’re negotiating for yourself (e.g., salary, benefits) or your team (e.g., budget, tools, staff, programs), understanding the financial implications can work in your favor.
  • Realize Cost-Efficiencies – Understanding how expenses play into the liabilities on your organization’s balance sheet can help you identify ways to be more cost-effective. 

What can you do to improve financial literacy?

Depending on your goals and timelines, there are several ways to improve your financial acumen. While not mutually exclusive, potential paths include:

  • Read and Study – Many reputable sources offer information free or through a subscription that will get you going in the right direction toward financial literacy. Here’s an example from Harvard Business Review: The Importance of Financial Literacy.
  • Seek a Mentor/Coach – Look for someone to provide one-on-one advice or tutoring. This could be a formal mentoring relationship or a paid coach.
  • Take an Online Course – Many institutions have virtual courses that you can take. Some are even self-paced, so you can fit them around your schedule.
  • Go Back to School –If the C-suite is in your sights you may want to invest more by returning to school to earn a degree or certification in finance. To get started, most business schools have short courses on finance and accounting for non-finance executives. Check them out!

What is the benefit of financial literacy on your career?

Whatever your current role, financial literacy is critical to advancing your career. Increasing your knowledge of finances enables you to perform your job better, which makes you more valuable to employers and more helpful to team members. Ultimately, financial literacy empowers you to choose your career path.


Heather Tenuto is a leader in the IT and telecom channel with more than 15 years of working with high-tech companies to maximize their revenue potential. Tenuto is the Chief Revenue Officer for Zift Solutions, a provider of Partner Relationship Management (PRM) and Through-Channel Marketing Automation (TCMA) solutions. Throughout her career, she has helped tech companies accelerate revenue through direct sales and channel partnerships. Tenuto is a problem solver with a fresh perspective and fearless style, which she uses to motivate teams to action, producing exceptional results within a short timeframe.