Change is never easy. But looking at change as an opportunity to improve and to reassess is how we grow – both as individuals and as organizations.
In my experience (at other companies, not at Allocadia!), a consistent area for change and growth is the relationship between marketing and finance. The changes, uncertainty, and tough economic times caused by the pandemic can strain any relationship.
Marketing and finance are stronger together and if you’re not on the same page today, it doesn’t mean you can’t be tomorrow. Here’s my advice for how to bring marketing and finance together.
Nurture a Strong Interpersonal Relationship
This is simply good career advice: regardless of what team or position you’re interacting with, it’s critical to establish good interpersonal relationships. You’ll develop the ability to understand the other department’s goals, constraints, and roadblocks.
We all have different skill sets – if we didn’t, our company would never get off the ground! Understand and appreciate that your marketing or finance counterpart is bringing new subject matter expertise that can compliment yours, if you give them the opportunity.
At the end of the day, a company can’t run without a strong marketing plan. And that marketing plan needs funding. If marketing and finance have the foundation of a solid interpersonal relationship, it’s much less daunting to reach out and use each other as resources. We both want the company to succeed, and we need to work together to make that happen.
Align Under Corporate Goals
The best way that marketing and finance can work together is first by understanding corporate goals, and secondly by knowing neither department can meet those goals alone.
It’s a bit of cliche that us finance professionals are always asking “well what’s the ROI?”. But especially during this pandemic, finance departments are responsible for steering our company’s bottom line through uncertain economic impact. It’s imperative to know that all activities – across all departments of our company – roll up to support corporate goals. We possess the corporate metrics and can advise marketing on overall budget allocations, bring forecasts into the conversation, and assist with ROI analysis of marketing programs in order for marketing teams to make better decisions.
Marketing will have different risks, roadblocks, and paths with their investments and plans compared to finance. But if both departments keep their activities aligned to corporate goals, we’ll be in lock step, no matter what new challenges get thrown our way.
When it Comes to Reconciling, Timing is Everything
Both finance and marketing had to make changes to how they worked over the past year. For us finance professionals, it was deeper scrutiny on where and why investments were being made. For our marketing counterparts, it was pivoting programs fast enough to keep up with market changes.
But the need to reconcile spend between the two departments is something that never changed. We (Finance) still wanted to know what’s committed, what’s not, and the timing of cash flow. The problem of course is that finance is not structured to meet the needs of marketing’s project-based funding. Instead, we record marketing expenses on a cash and accrual basis. I’ve described it as trying to use a toothbrush to clean your floors, it’s just not going to work! We need different tools for different processes.
Finance and marketing organize investment data differently, because we look at spend differently. Finance works on an accrual basis with monthly reconciliations, while marketing plans months, quarters, even a year ahead and considers that money spent. We talk two different languages, and need to find the common language and realize each department may work differently, yet we can still work together.
It gets tricky when we need to bring those disparate processes together so finance can prove marketing spend as part of the overall corporate budget. More than tricky – in all honesty, it can be horrifying. It can take days going through each invoice, what it was recorded as, what it actually is… My best advice here is to use Allocadia, because then you’ll truly know what discretionary budget is left. It creates a common language between two structures that are set up fundamentally differently. And it dramatically cuts the time my team spends reconciling marketing’s budget: from days to an afternoon.
Scenario Planning Isn’t Just a Marketing Exercise
If you’ve taken my earlier advice to work on your interpersonal relationship and built trust between marketing and finance, then us finance professionals can really help flex that scenario planning muscle. We can help marketers explore a thousand different ways to get to where they want – which should be somewhere that furthers corporate goals.
What I always want to know is:
- What are the consequences of the investment?
- Will it get us where we want to be, or if not all the way, then close?
Finance brings to the table the knowledge of the company-wide budget, where bigger roadblocks lie, and the means to trigger the release of funds. At its core, scenario planning is an exercise that identifies when to pull which levers to drive the biggest impact. And we bring access to different levers, opportunities, and a broader scope of plans. Finance is uniquely positioned to know where we have money and how it can be used to apply pressure to various levers. Scenario planning is a leap we can take together.
Make Every Dollar Count
COVID-19 has brought unique challenges to each individual and organization. But those challenges can be opportunities. It’s a chance for us to step back and take a bird’s eye view of how we were running and question if it’s leading us to where we want to be.
We can strive for more clarity, more efficiency, and double-down on what we know is successful. Regardless of which department you’re in, it’s a chance to break the status quo and stop investing in the same things year after year out of a sense of obligation. If it’s not bringing in returns, stop investing.
Budget decisions are inevitable, and marketers and finance should be partners in that process. The better marketers know their budgets, what’s needed to drive impact, and which programs they can run best to support corporate goals the easier the decisions become. And the more finance will look to marketing for their input.