How can executives improve the relationship between marketing and finance departments?
Finance and marketing departments notoriously dislike working together. Marketing wants to spend money; finance wants to control it.
Marketing wants flexibility to take risks; finance wants structure. Marketing wants proactivity and action; finance wants process and methodology. Marketing wants to move with speed; finance wants auditable and documented paperwork.
Putting differences aside, finance and marketing have a lot in common. In fact, their business goal is always the same: make the company they work for profitable, increase revenue and maintain cash flow. Furthermore, both departments are frequently stereotyped: marketers are perceived as creative types who don’t know math and don’t care about the numbers and finance are perceived as serious and tight-fisted. But those stereotypes are not exactly true. Most senior marketers are actually all about numbers and revenue and demand generation and most finance executives are revenue-driven and strategic. The problem is neither of them have the right tools to make the process of spend and cash management seamless and collaborative.
To make matters even more challenging, marketing costs are constantly changing, and usually going up. At the end of last year, Gartner issued a statement that marketing budgets are on the rise. Even small businesses need a marketing budget for proper campaign management of their product or service. So how can the finance department and the marketing team work better together to make sure that money is spent well and monitored?
1. Make cross-departmental communications a priority
It often seems that marketing is always going to ask for more budget allowance, while finance is always going to cut the budget. But unfortunately, neither side takes the time to sit down with their counterpart to explain exactly why money is needed or why it needs to be reduced. With the right software, finance teams can give marketers visibility on their budgets, cash allowances, and current cash flow. This is key as at the present time, marketers have no ability to know where budget is. With this information available in real time, both sides can have regular conversations where marketing can explain the upcoming campaigns and what kind of funds are needed, and finance can illustrate how cash flow must be preserved.
2. Help marketing demonstrate financial ROMI
When finance sees marketing spend a large amount of money, without any knowledge of what it is for or the return on marketing investment objectives (ROMI), finance undoubtedly will want to refuse the spend. After all, it is their job to control spend. But if marketing will only take the time to explain the return on marketing investment to finance, they may give it a second thought. I know it can seem like a time-consuming exercise, but marketers need to help finance do their job as well.
3. Hold marketing fiscally accountable
Marketers do need to be cost-conscious and ensure budget is spent wisely on strategic business initiatives. By showing constraint on frivolous spending, marketers prove themselves further to finance. With access to the right financial software that demonstrates real-time spend, marketers can even give finance ideas on where they can cut spend and finance will love that!
With the right tools, there is no reason why marketing and finance can’t be a match made in heaven. I invite you to visit our website to learn more about Budget Holder Management and how it is revolutionising businesses.