Communication

Every SBL answer is a piece of professional communication. You write as someone in the case, such as a consultant, a finance director or an internal auditor, to someone in the case, such as the board, a regulator or the staff, in the format the task specifies. Communication is one of the five professional skills that share the exam's 20 professional skills marks, and it is the skill most directly in your control: a technically strong answer written as an unstructured stream of points leaves skills marks behind. This lesson explains what the skill means in SBL, shows a weak and a strong answer to the same task, and gives you a way to practise.

What communication means in SBL

ACCA's study guide describes communication in three parts. In our words:

The professional skills marks are allocated as each task's requirement determines, so read every requirement for the skills it points to. Where communication is rewarded, markers look for:

• the right format: a report looks like a report, an email like an email, slides like slides;
• a clear structure: an opening that states the purpose, headings that follow the requirement, and a conclusion or recommendation;
• the right tone for the reader: formal and courteous; technical with specialists, plain with a non-financial board or the public; sensitive when the news is bad;
• concision: short paragraphs with one idea each, and no padding or copying out of the case;
• persuasion: a recommendation backed by reasons and evidence, with the main objection answered.

Writing for the reader

A few habits do most of the work:

• Start with the point. A busy senior reader wants the conclusion or recommendation first, then the reasons.
• Use the reader's language. A non-financial board may not know "gross margin", but everyone understands "for every $100 of sales, we keep $26 after paying for the goods".
• One paragraph, one point, opened by a sentence that states the point.
• Mirror the requirement in your headings, so the reader and the marker can see that every part has been answered.
• Make numbers mean something. Round them, and say what they imply: "$3 million less gross profit than last year".
• Challenge without blame. "The forecast may be optimistic for three reasons" persuades; "the sales director is wrong" alienates.
• Respect cultural differences. Avoid idioms, slang and jokes, especially when writing to people in another country or from different backgrounds.
• Build an argument in order: the claim, the reason, the evidence, the main objection and your answer to it, then the conclusion.

How to practise communication

• Cut by a third. Take an answer you have written and cut it by a third without losing a single point. It is the fastest way to learn concision.
• The two-minute test. Give your answer to someone who does not know the case. After two minutes, can they tell you your recommendation and the main reason for it?
• Practise every format. Write at least two reports, two briefing notes, two emails and one set of slides in the exam software before the exam (the area J lesson covers the layouts).
• Write the reader down. At the top of every plan, note the role you are playing, the reader, the format and the purpose.
• Study model answers for structure. Compare your answers with ACCA's published answers and examiner's comments, looking at how they are organised, not only what they say.

Worked example

Case extract. Ikeja Home Electronics (a fictional company) sells televisions and appliances through 40 stores. Its gross margin fell from 32% to 26% this year, on revenue of $50 million. The finance team has found two causes: most stock is imported and paid for in US dollars, and the local currency weakened, raising the cost of each item; and the company matched a competitor's price cuts. The chief executive proposes raising prices by 5% on premium products and buying more stock from a local assembler. The non-executive directors, most of whom have no finance background, meet next week.

Requirement: As the financial controller, write an email to the non-executive directors explaining why gross margin fell and what the chief executive proposes. Professional skills marks are available for communication.

Working. Gross profit this year: 26% × $50 million = $13 million. At last year's margin: 32% × $50 million = $16 million. Shortfall: $3 million.

A weak answer

Hi all, GM% decreased from 32% to 26% (i.e. −600bps) due to FX exposure on USD-denominated COGS and competitive pricing pressure (matching). Revenue was 50m. The CEO wants to do a 5% price increase and change suppliers. Porter's five forces shows rivalry is high. There are risks. Let me know your thoughts.

Why it earns little: it has no subject line and an informal greeting; it is full of jargon ("bps", "COGS", "FX exposure") that these readers will not follow; it never says what the fall cost in money; it names a model without making a point; "there are risks" says nothing; and it ends by handing the thinking back to the readers.

A strong answer

To: Non-executive directors. From: Financial controller. Subject: Why our gross margin fell, and the proposals for next week's board meeting.

Dear colleagues,

Ahead of next week's meeting, this email explains why our gross margin fell this year and summarises the chief executive's two proposals.

What happened. For every $100 of sales, we kept $26 after paying for the goods we sold, down from $32 last year. On sales of $50 million, that is $3 million less gross profit than if the margin had held.

Why. There are two causes. First, most of our stock is imported and paid for in US dollars; the local currency weakened, so each imported television cost us more. Second, when a competitor cut its prices we matched them to keep customers, so we earned less on each sale.

The proposals. The chief executive proposes:

1. raising prices by 5% on premium products, where customers are less sensitive to price;
2. buying more stock from a local assembler, paid in local currency, to reduce our exposure to the exchange rate.

Points to consider. A price rise could lose sales if the competitor does not follow, so we would test it on a few product lines first. Local supply reduces currency risk, but we have not yet checked the assembler's quality or capacity, and I suggest a quality review before any contract is signed.

I would be glad to answer questions before the meeting.

Financial controller

Common mistakes

• Ignoring the format the task asks for, or using the same layout for every task.
• Writing for the examiner instead of the reader in the case: jargon, model names and theory for a lay audience.
• Long paragraphs that hide several points, and copying case facts without saying what they mean.
• An informal or blaming tone, especially when challenging a director.
• No conclusion or recommendation, or one that appears only in the final line.

Exam technique

Before you write, put four words at the top of your plan: role, reader, format, purpose. Check them again before you finish. Use the requirement's own parts as your headings, keep each paragraph to one point, and spend the last two or three minutes of each task reading your answer as the recipient would. Communication shows across the whole answer, so a clean structure set up at the start protects marks all the way through.

Study with AI

I am studying for ACCA Strategic Business Leader (SBL) and practising the
communication skill. Give me a short business situation (about 150 words) with a
few figures in $, and ask me to write an email or briefing note to a named reader
who is not a finance specialist. When I send my answer, mark it on format,
structure, tone for that reader, plain language and persuasion, quote my weakest
sentence and rewrite it, and tell me what the reader would still not understand.

AI assistants can misjudge what an ACCA marker rewards: check their feedback against these notes and ACCA's own model answers before you rely on it.

Lecturer's note: The test of communication is not whether you understood the case, but whether your reader will after one reading. Imagine handing your answer to the person in the case at the end of a long day, with ten minutes before a meeting. Would they know what you are telling them, why it matters and what you want them to do? If yes, you have earned the marks. If they would need to come back and ask what you meant, the marker will not award them.

Key points

• Communication means informing, persuading, and clarifying and simplifying, for the reader in the case.
• Use the format the task asks for, a clear structure that follows the requirement, and a tone suited to the reader.
• Put the main point first, keep one idea to a paragraph, and make every number mean something.
• Persuade with reasons and evidence, and answer the obvious objection.
• Practise every format in the exam software, and cut your drafts until nothing is wasted.

Quick check

1. A task asks you to write to the staff of a company about a restructuring. Give two ways your communication should differ from a report to the board on the same subject.
2. Rewrite "GM% fell 600bps" for a non-financial reader, for a company with revenue of $20 million.
3. What four things should you note at the top of your plan before you write?

Answers

1. For example: plainer language with no financial detail staff do not need; a tone that acknowledges their concerns; no confidential information about options the board has not decided; and clear practical next steps, such as when they will hear more and whom to ask.
2. For example: "For every $100 of sales, we now keep $6 less after paying for the goods we sell; on sales of $20 million, that is $1.2 million less gross profit."
3. Your role, the reader, the format and the purpose.