Over half of UK finance workers are confused by financial terminology
19 October 2023
Over half of UK finance workers are confused by financial terminology at least once a week and, worryingly, nearly half (45%) have witnessed serious errors in their workplace due to misunderstandings of basic financial terminology.
The new research, from AAT (Association of Accounting Technicians), revealed that two out of five (42%) UK finance workers are embarrassed to admit they don’t understand terminology at work with many turning to tech for the answers rather than asking their workmates. Two thirds (63%) use Google and just under half (45%) use AI/ChatGPT for answers, finding it faster and less embarrassing than asking colleagues. A further quarter (24%) regularly opt to simply pretend they understand.
The top five financial terms that finance workers find most challenging to explain are:
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) (19%)
- Liquidity radio (19%)
- Leverage ratio (18%)
- Accrual accounting (17%)
- Treasury management (15%)
It’s not just making errors that concerns finance workers – nearly half (47%) are worried that a lack of terminology understanding will result in them losing their current job. Over half (57%) wish it was easier to discuss gaps in financial knowledge with their colleagues or managers, 54% wish their workplaces provided better resources and 50% felt their workplace lacks training.
Anthony Clarke, Business Development Manager (Employers) at AAT, said: “This data clearly shows that financial language, terms and phrases are a confusing minefield for thousands of finance workers.
“What’s worrying is that the majority feel a sense of taboo around reaching out to their workplaces for help, due to fear of embarrassment or running the risk of losing their job, meaning employers are in the dark and can’t remedy the situation.
“What’s ironic is that for even the most seasoned of finance professionals, undertaking continued professional development to build on the skills they already have ensures they remain relevant and competitive. It’s something that most employers are happy for their staff to do. Staying up to date with the latest legislative and technical changes helps businesses be more resilient in the face of economic challenges.
“The desire to learn is there; an overwhelming 98% feel it’s important to continue to learn and understand workplace finance terminology. However, if employers aren’t aware of any issues they can’t put plans in place to refresh training, upskill staff or provide more comprehensive resources.”
It's not only those working in finance; general UK workers have also confessed they find finance tasks in their jobs difficult. Over a third (37%) of UK workers said they find budgeting at work extremely stressful and half (49%) wish their workplace provided better resources to help them understand terminology. Similarly to those in finance, the overwhelming majority (86%) of UK workers believe it is important to learn and understand workplace finance terminology.
Even successful business woman Jo Fairley, Founder of iconic British brand, Green & Black’s Chocolate, said: “I was no stranger to financial confusion when I first founded my business - at the time I sold my first bit of chocolate, I wasn't sure of the difference between profit and net profit.”
Anthony Clarke continues: “Finance skills aren’t just for those in accounting; they are key for any professional, in any sector. A production company can’t produce a film without excellent budget management, fashion brands can’t host at London Fashion Week without someone getting a firm grip on the costs and no one could secure a loan to launch a business without preparing a cash flow and budget.
“We’re calling on all employers to encourage the communication barriers around finance knowledge in the workplace to be broken down. If more people talk about where they need more learning, the more commonplace it becomes, and businesses become far better at upskilling their workforce.”
AAT offers a wide range of accountancy and bookkeeping qualifications and short-courses which enable businesses to offer training and development opportunities to their staff. All of AAT’s qualifications and courses are open to everyone across the UK, regardless of age or previous experience. Employers can find out more about CPD and development opportunities for their staff by visiting the AAT website.
 House of Commons Library confirmed there were 1.08 million financial services jobs in the UK in 2022. 57% of UK finance workers said financial terminology confuses them, totalling over 615,000