Before I get all my CFO friends upset, let me begin by saying I know finance teams play a very important role and are critical to the success of any business. But sometimes finance can make a marketing leader’s life miserable. And vice versa. Not because of the commonly-held but flawed belief that accounting is all about numbers and marketers are all about words. The best marketers are very much about numbers. But they do get tripped up by lack of budget visibility and the different ways in which marketing spend is accounted for, often resulting in nasty surprises related to being over budget or under budget. You'd think being under budget was a good thing, but not if your company subscribes to the "you don't use it, you lose it" philosophy.
Your Role, Their Role
Marketers are tasked with driving company and product messaging, demand creation, sales enablement, and customer and prospect engagement. Our sole purpose is to make a positive impact on revenue. Ahhh yes, revenue. Now that’s something we have in common with finance. Successful marketers positively impact revenue. Finance teams track revenue and profitability and need the right data to do so. You hold a piece of the puzzle they need to solve the puzzle, so play nice and give it to them.
“How is your budget looking?” is the dreaded question for most marketing leaders.
Finance teams need accurate budget and spend data from marketing. How much is that marketing program going to cost the company? How long will the program last? How much are we paying in advance? What did the program actually cost the company? And what were the results? And marketers need to know in advance how accounting will treat marketing spend. Tip: learn about accrual accounting.
Marketers must align their activities and budgets to business goals and to do that they need to be able to do some basic revenue modeling. What is revenue modeling? It’s creating multiple revenue models based on differences in geography, industry, products, segment, etc. Most marketing departments don’t have a way to do this easily. They end up guessing or looking at past performance and inferring the same results for future performance. While history may repeat itself, these guesstimates are a far cry from concrete evidence.
Marketers must be able to predict, with confidence, which marketing programs will succeed so they can focus their resources and budgets on those with the most potential and be able to measure how effective the program was at driving business goals and revenue.
Budgets can be allocated down to the programs or tactics level and actuals can be captured either through manual input or integration with an accounting system. In either case, marketers can see where they are getting the best bang for their buck and modify existing programs to improve effectiveness.
Marketing Does Make A Difference, So Prove It
Of course, as much as finance can drive marketers crazy, the feeling likely goes both ways. Finance teams can’t effectively do their jobs if marketers don’t give them accurate budget and forecast numbers. With an automated marketing planning solution, you can give an accurate budget forecast and track projects to that forecast much more easily. Not only will your marketing department run smoother, you just might make a few friends in accounting.
Tying budgets to goals and results, and being able to see plan/forecast/committed/actual budget numbers changes everything. Having one view of plans, budgets, and results, with the ability to drill-down by regions, products, segments and more – now you’re talking your CFO’s language.