Getting sales and finance to work together cohesively can be a challenge. Often, these two departments see each other as an impediment to reaching their respective goals.

Because finance is tasked with ensuring the company meets its bottom line goals, it can come into conflict with the sales task of driving revenue and its tendency to spend aggressively to accomplish its goals. By focusing on three best practices, sales and finance departments can bridge gaps and work in an effective partnership for the greater success of the overall organization.

1.  Stop fighting fires and look at the broader strategy.

One of the quickest ways that sales managers end up overspending or overcommitting their budgets is unforeseen fire drills. When customers come to them with problems, salespeople naturally feel the need to do whatever is necessary to alleviate each issue. However, if they’re making decisions solely to solve immediate problems, they can lose out on efficient, longer-term uses of funds that could drive larger revenue initiatives.

For example, in the consumer products industry, a typical fire drill involves adjusting pricing on items the customer purchases to make up for loss of POS sales—or to help the customer hit margins. These circumstances can pop up so often at various points of the year that they can consume a large portion of the marketing funds budget, thus putting other initiatives in jeopardy. By more effectively analyzing the financial metrics and product mix offered to the customer at the beginning, you can offset having to allocate as much funding to those fire-drill moments throughout the year.

The effective use of the Financial Planning & Analysis (FP&A) organization helps keep the company on track by making clear the most efficient use of sales and marketing spend. A detailed analysis by finance of the ROI of prospective sales and marketing initiatives can allow sales teams to properly allocate their budgets—and earmark funds to be spent on larger strategic goals and nothing else. With the strategic budget walled off, the team can respond more thoughtfully to quick-fix situations, as they have a limited budget that can be spent on them.

Successful corporate firefighting is a matter of prioritizing and making priorities clear across all teams. A company will undoubtedly encounter instances where it can’t spend a quick-fix amount to solve a problem. By looking at the bigger picture, they can focus the proper funding on the bigger goal, which will lead to better performance on revenue goals down the road. This focus by the finance team can lead to prioritizing the overarching financial goal over this week’s momentary issue.

2.  Develop rapport with the sales team by knowing the business.

It’s common for sales to see finance as a sort of “fun police” that prevents them from proceeding with initiatives that will generate revenue. It is important for FP&A professionals to combat that perception by building better rapport with their sales managers.

I am a finance professional who began my career in sales, and I have found being able to build this rapport critical to working effectively with sales teams.

Much of this can be accomplished by taking the extra initiative to learn the business in depth. When discussing where to allocate a particular line item, it is important for the finance professional to look beyond just the raw monetary costs and benefits of the proposal. Rather, they must look at it from a strategic business perspective and question how the business will be affected overall.

This is the most important lesson I learned in sales that I’ve leveraged into a finance career: You must do more than just look at the numbers alone to be a true partner to sales. It’s important to interact with customer-facing professionals to remove blind spots and understand the overall bigger picture.

To give proper support to sales managers, finance professionals must ask questions like:

• What are the effects of the decision long term?
• Will the deal/initiative positively affect a pain point for the customer or your own organization?
• Is there a stronger competitor? And will we need to make decisions that may yield a lower margin temporarily?

Additionally, doing your own research or simply having regular finance and sales conversations about the business are recommended. By becoming familiar with realities like sales pain points, the market environment, and your company’s perceived advantages and disadvantages, finance gets a more holistic understanding that can inform financial analysis and give weight to its recommendations. In my experience, this is a critical step towards flipping the finance and sales relationship from asking for approval to asking for advice as a partner.

The resulting rapport will make finance and sales more like partners and less like combatants. Additionally, that rapport can go toward building better deals, as finance can be more involved due to the regular contact. It may sound simple, but developing relationships is a critical element to providing sales support that often gets overlooked.

3.  Be flexible and able to evolve with the strategy.

Sales managers face ever-changing daily challenges, and situations beyond their control manifest regularly. Thus, it is important for FP&A professionals to be flexible with their sales counterparts to most effectively support their revenue producing tasks.

Budgets and annual plans are not “set it and forget it” tasks. They require adjustments and massaging throughout the year. While keeping the broader goals in mind, you still must keep flexible and ready to adjust strategy on a moment’s notice. Keep open dialogue with sales teams regarding the progress of their business or their opinion on achieving their sales forecast. This will enable FP&A teams to plan for and respond to changes in the plan, rather than being caught off guard by changes.

For example, most market development funds are tied to company revenue, which is planned at the beginning of the fiscal year. This is obviously a moving target, and sales performing better or worse than projected can have a dramatic effect on the amount of funds available. Making sure that the largest strategic priorities are addressed requires a constant interface with sales to enable the ability to adjust as quickly as possible, rather than waiting until the end of the quarter when the final numbers are in.

A Few Notes on Sales & Finance Collaboration

With a foundation of regular communication between finance and sales on the progress of the business, it’s easier to adjust plans and budgets on an ongoing basis. This means corrective actions on various related expenses can be taken beforehand. If you are communicating with sales through the entire life cycle of a particular initiative and you are aware from early on that it may not be working, you can prepare other teams to begin to trim back expenses to prepare for the impending budgets cuts or vice versa on successful initiatives. Taking the time to run numbers across teams before final decisions are made will greatly help improve overall decision making.

In summary, applying the tools of FP&A in the sales function can make salespeople more effective and create a culture of accountability and transparency. For the company to make the best decisions possible and reach their revenue goals, sales and finance most be active partners to achieve greater success.

If sales and finance alignment is something you’d like to improve at your company, then we invite you to contact us or consider subscribing to our operational finance blog for more insightful content.