Did you know that high-growth organizations are three times more likely to have collaborative marketing and finance teams?
Partnering with finance is the smart move for a marketer, and we’re here to show you how. Here are three ways to bury the hatchet and make finance your best friend.
Both marketing and finance are guilty of assuming their counterparts understand the fundamentals of their jobs. But most marketers don’t have an accounting degree, and vice versa! Take turns hosting Marketing 101 and Accounting 101 sessions to teach each other the fundamentals.
A good place for finance to start is defining the processes and rules around submitting invoices and POs. Marketing 101 should cover how you organize spend, because it’s much more granular than the broad general ledger codes finances uses. For example, finance has one general ledger code for advertising, but marketing allocates advertising spend by campaigns, geography, teams… the list goes on! It’s ok that we think about investments differently, but we need to create a shared understanding and alignment to bring it all back together.
How does this help you with planning? Understanding how finance views and categorizes marketing spend as part of the company’s investment portfolio will help with setting SMART strategic targets and scenario planning. The more marketers understand finance’s processes, the better they’re able to report marketing contributions in a way that everyone understands. And nailing down budget alignment keeps everything organized so you can easily pivot to a different scenario and execute on it without causing massive budget headaches and delays.
Pro Tip: Provide finance visibility into marketing budgets with frequent forecasting and amortizations. In other words: keep your planned investment info up-to-date and have it mapped to the correct quarter or fiscal year. It’s a massive help to finance to know the timing and status of marketing spend, but is also in your benefit to keep finances current. It’s going to save everyone a lot of headaches.
Marketing’s budget is the largest source of discretionary spend in a company. It’s no wonder that finance shows an interest in how you invest it! Show you’re using resources to make an impact by providing finance with answers to these questions:
There’s a theme to those questions and it’s ROI. When your CFO asks about marketing ROI, they’re really asking when that investment will pay off for the company. Marketing needs to frame their budget conversations with finance around the expected impact, which is a key part of the planning process. Using ROI to talk about marketing investments clearly demonstrates how marketing’s decision-making aligns with overarching company investments and revenue strategies.
These questions can also guide marketers as they build plans to support their strategic targets. They highlight the benefits and risks to each potential plan. In particular the last question on the implications of passing on an opportunity helps define which plans are necessary for success or when to establish a trigger point for scenario plans.
This one seems pretty obvious, but it’s a repeat offender in most marketing organizations with marketers spending over or under their budget. Although they’re extreme opposites, they cause the same issue: marketing has funds that could have been allocated to a different company investment.
Remember: you don’t own your marketing budget, you rent it.
Your company only has so many investments it can make. It’s not that they don’t want to give extra to marketing, but they want—and should—be able to weigh this investment against others. Finance’s role is to manage all investments and allocation of spend in the company’s best interest. If your marketing budget is consistently over or under by a wide margin, don’t be surprised if finance doesn’t trust you.
Earn their trust back by sticking to your planned budget. And if a situation does come up where you know that your actuals will look very different from forecasts, be proactive and bring it up right away. Don’t sweep mistakes under the rug and try to hide them, that’s how this bad blood started in the first place! Honesty is the best policy. And you never know, they might be able to help fix the mistake. Solving and avoiding financial challenges is their job after all.
Any of these three ways is a great in-road to becoming partners with finance. And the secret behind all three of them is that you’re making an effort. Never underestimate what a good-faith attempt at trying to create a strong, professional relationship will achieve. When finance sees you making the effort to understand their processes, communicating your plans and results in terms of ROI, and spending to plan, they’ll start to reciprocate. Suddenly, you won’t be able to remember why you weren’t friends all along.
If you’re serious about driving impact for your company then it’s time to get serious about your relationship with finance.
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