DeWITT, N.Y. — Often thought of as something for individual consumers, financial literacy can be an important element of business ownership, according to one area banking professional. There are really two prongs to financial literacy for business owners, says Laura Mattice, Community Reinvestment Act officer at Community Bank, N.A. The first prong is really understanding […]
DeWITT, N.Y. — Often thought of as something for individual consumers, financial literacy can be an important element of business ownership, according to one area banking professional.
There are really two prongs to financial literacy for business owners, says Laura Mattice, Community Reinvestment Act officer at Community Bank, N.A.
The first prong is really understanding finances as a business owner, she notes. “It’s hard to be a successful business if you don’t know your finances.”
Her recommendation is that anyone considering opening their own business have a good working knowledge of basic business finances including cash flow, budgeting, and more. “Just basic accounting for any business is good,” Mattice says.
While many businesses will either employ someone full time or hire an accountant to help with finances, a business owner needs that basic knowledge, she says, to make sure that accountant is doing his/her job and to avoid being taken advantage of.
Knowledge of basic lending practices can ensure that business owners make the best financing decisions for their business, and budgeting knowledge will help them prepare and plan for necessary expenditures, Mattice says.
To find financial literacy help, there are several options for business owners and entrepreneurs including reaching out to their regular financial institution and checking with area small-business groups and the local chamber of commerce.
Just as important as having business financial know-how is making sure employees also have some basic financial literacy, Mattice says. Community Bank provides financial literacy education for its own employees, she notes, with the understanding that not everyone who works at a bank is a banker.
Nationally, only about 20 percent of employers try to help their employees with financial literacy and money management, she says, but the benefits to doing so are huge.
“You end up with a happier and healthier workforce when you provide financial education,” she contends. Financial difficulties can lead to stress, absenteeism, and other issues in the workplace.
By working with the same resources they might tap to bolster their own financial knowledge, employers can put together some basic financial-literacy resources for their employees to cover things such as budgeting, understanding credit cards, planning for retirement, and more.
But employers “shouldn’t make it mandatory or make it where people have to sign up for something,” Mattice cautions. Often, bundling it with an employee assistance program (EAP) is an easy way to make information available for those who want it.
“Businesses that invest in their employees — it’s a great benefit that doesn’t cost a lot of money,” she says.
In her role at Community Bank, Mattice makes sure the bank is reaching out into the communities it serves. A huge part of that outreach is offering financial-literacy education to businesses, to customers, and to organizations that serve the community.
Community Bank operates more than 210 branches across upstate New York, northeastern Pennsylvania, Vermont, and western Massachusetts.