Sales managers are focused on increasing the company’s revenues. Accomplishing this often requires an increase in the marketing budget. Finance personnel are concerned with the company’s bottom line -- its net profit and cash position. The sales and finance people often disagree about what expenditures are necessary for the company to reach its revenue targets. Despite this possibility of conflict, the finance team plays important support and advisory roles for the sales department, which is also called the marketing department.

Annual Planning

In many companies, the chief executive officer requires each department to generate and submit its own annual plan. The finance team plays the role of consultant and guides marketing employees -- who may not be proficient with or enjoy working with numbers -- through the process of completing the department plan. The expertise of the finance staff streamlines the planning process for the marketing people, saving them time and frustration. Finance staff members often find that marketing people want to learn more about planning but never had an opportunity before being asked to develop the annual plan.

Accurate Forecasting

The revenue forecast is one of the most critical elements of the company’s business plan. If actual revenues are significantly less than what was forecast, the consequences can damage the company by creating a serious cash flow shortfall. Finance personnel are trained in forecasting and planning techniques. They work with the sales team to develop revenue models that are realistic, with assumptions based on a thorough understanding of the economy and industry in which the company operates. Marketing personnel tend to be extremely optimistic. The inherent conservatism of the finance staff can temper this sentiment, with the resulting forecast -- a blend of both views -- being realistic and attainable.

Justification of Budget Requests

When the proposed budget is presented to the CEO, the sales and marketing staff must be able to justify the increases in marketing expenditures included in the forecast. The finance staff will participate in this meeting and answer the CEO's concerns so she can decide whether or not to approve the budget. While the interests of marketing and finance might clash at these discussions, examining the rationale for budget requests gives the CEO the information she needs to make an informed decision about whether the expenditures should be made.

Variance Analysis

When actual financial results are compiled by the accounting department at the end of each month, the finance team compares these results to the forecast. Significant variances merit further investigation to determine why they occurred. The finance team develops a variance analysis report that presents the major variances along with explanations. Team members often meet with the marketing department to help marketing employees better understand and interpret the results. The reports and trend analysis produced by the finance staff guide the sales manager in decision making. For example, the variance analysis will reveal which marketing strategies are working well and which may need to be revised based on actual results that are unsatisfactory.

Purchasing

Finance personnel help the marketing department make better purchasing decisions, including upgrades to office technology. The finance people are proficient with analysis techniques that can weigh the costs and benefits of important decisions. Input from the finance staff can help the marketing department save money, and these savings can be applied to expenditures that generate additional sales.