The more Marketing and Finance can collaborate, adapting their local datasets and language to each other’s world, the easier it will be for the company to make sound business decisions.
One of the most crucial relationships in every company is between marketing and Finance. This relationship has emerged as a dynamic marriage of equals, from an adversarial war of attrition between marketing across one side spending some money and Finance on the other seeking to save it.
To get the most out of a marketing career, it is critical to understand Finance. When Finance and marketing are best friends, they form a formidable partnership.
The marketing team is funded by Finance
Finance is at the highest level of an organization’s strategic planning. They collaborate closely with the CEO and other strategic executives to determine which initiatives are financially viable and which are not. They decide how much funds a department gets, whether it will grow or slump, and at what rate.
It’s critical for Finance to comprehend the strategic value of the marketing team’s efforts. It’s critical that they understand why the marketing team might want additional cash next year to make specific hires or invest in new marketing activities, as well as the potential effect those investments will have on the company. If the marketing team wants to receive the resources they need to implement their strategy next year, they will have to tighten up their budgeting. They have tremendous sway over how much money is spent on marketing.
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The marketing team has a discretionary capital budget
Unlike Finance, marketing has a budget that is distributed across a variety of areas and is not tied to the team’s headcount. The spectrum of viable channels to spend on is broad, from advertising to digital agency. Finance, on the other hand, may only invest in new technologies once in a few years and have a little budget for travel.
Finance manages discretionary spending amid a crisis
Finance must ensure that there is enough capital available to run the company as sales and earnings decline. Although they are frequently portrayed as ‘the grim reaper coming to reduce expenses, the truth is that they are doing all possible to keep everyone employed. Discretionary spending is regarded as ‘variable,’ and is thus the first line of defense in a crisis. In conclusion, low-hanging costs such as training and marketing are the low-hanging fruit.
Also Read: Leveraging Brand Voice to Build Meaningful Relationships with Customers
Finance ensures that the marketing team stays within budget
Most marketers spend their entire careers pondering how to create and implement highly effective marketing strategies. That’s what marketers want to do and where they focus their efforts. However, marketers frequently have another major responsibility: managing a substantial quantity of money for the company. Aside from wages, marketing program spending is frequently one of a company’s major expenses.
Marketers are in charge of efficiently managing that money. This is especially true as one rises through the ranks of a marketing organization—nothing will derail a marketer’s (career) faster than a major financial mistake.
Here, Finance is the marketing team’s collaborator. They can show them how to keep track of and forecast their spending in a systematic and precise manner. They can instruct the marketing staff on topics such as the distinction between “cash” and “accrual” accounting and aid in the implementation of accounting best practices. Marketing teams can keep up the momentum and prevent major financial and possibly career-ending mistakes by leveraging the Finance team.
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