Sales and finance teams are seemingly very different. The role of sales teams is to spend what is needed to build and maintain a customer base. The role of the finance team is to create budgets and forecasts involving spending and revenue. Based on this it doesn’t seem that there is too much room for working together- other than when it comes to deciding on the budget.
In reality, there is plenty of room for cooperation. There are several ways in which FP&A teams can work together with sales and improve different aspects. Starting with consistency and communication, both of these departments can come together to improve overall company efficiency.
Every relationship starts with collaboration, and the more communication there is, the more potential there is for a better relationship. While other departments are famously known for working together and collaborating, finance and sales teams rarely seek each other out to develop a relationship more than what is needed for yearly check-ins or setting the budget, all of which does very little in terms of building relationships.
Ineffective communication not only doesn’t help advance the relationship, but it actually pushes the two departments further apart. Part of this means that both teams are missing out on potential growth in the office and business.
FP&A departments can develop more effective strategies and bridge the gap with sales and finance by simply facilitating communication. Speaking with the sales team and actively seeking out this collaboration allows for a deeper analysis of sales KPIs that the finance team might not reach by themselves, as well as a far higher level of efficiency. Reaching out regularly is key to developing a healthy collaboration between the two departments.
In this case, success isn’t measured exclusively by financial growth and hitting targets. The quality of customer experience is an example of something outside the direct KPI measurement that is best analyzed by the sales team which directly deals with customers.
Increased collaboration can identify points such as these, for which the sales and finance teams can come together to improve or build on, by taking the unique perspectives of both departments into consideration.
Uncertainty and inaccuracy will do the exact opposite of collaboration- it will drive departments apart. Being on the same page is extra important when it comes to goals and budgets, the two most important things for sales and finance respectively.
This is where data-driven strategization (with an element of collaboration) comes in. Finance teams can run the numbers an unlimited amount of times, but without evidence to support new strategies, the sales team will likely not come onboard.
FP&A teams use data to create long term strategies based on real facts and numbers. Whether it be past performance or in-depth market research and trends, the sales budget needs to have a heavy data aspect to it that illustrates their reasoning in order for the sales team to accept it and even more importantly, be happy with it.
This doesn’t only apply to budget allocation. Data is just as important for sales forecasting which helps FP&A teams come to the most accurate numbers. Because so many other budget decisions are based on the sales forecasts, accurate data-driven numbers are essential here.
Automate Data Collection
Understanding how important data is to both sales and finance is a very important step in bridging the gap between the two departments, but how you go about doing it is no less important.
The first benefit to automating data collection is eliminating the risk of manual human error. Finance records go through a tremendous amount of data every month, and the less manual input, the less of a chance of costly mistakes.
The second benefit is saving time. Finance teams spend far too much time on collecting manual data and not enough time conducting analysis. FP&A professionals have a lot of good insights to provide the organization, and FP&A automation can help provide them with the time needed to do so.
Lastly, automation creates consistency. Finance and sales teams see the same company from different angles, and they both have different insights on how to get to the goals. Instead of working on mixed or conflicting data sets, both departments can have a single source of truth to go back on. Having access to consistent and accurate facts will help bridge the gap between the two departments. At the end of the day, both departments have the same goals for the company, but their vision for how to get there may be different.
FP&A and flexibility go hand in hand. Collaboration between sales and finance doesn’t end when quarterly strategies are established or when the yearly budget is set. Analysis should continue throughout the entire process, adapting and developing plans where needed. As a bonus, reviewing the process after it’s finished, can provide good insights and increased flexibility and output for the upcoming budget periods.
FP&A should meet regularly with sales management and use KPIs to evaluate strategy. Flexibility provides many additional benefits to the company:
- Being that both departments have very different perspectives and ideas, working together to find the best solution can come about from out of the box strategizing.
- Being flexible with each other avoids wasted time and resources on an ineffective plan.
- Flexibility is key when it comes to hitting targets, whether they be short- or long-term. It can help the company reach better cross-departmental solutions.
Without looking at the bigger picture, finance and sales teams have very different priorities which can develop into interdepartmental discord. While sales teams focus on customers and hitting their targets, finance teams focus more on internal budgeting and a company wide outlook. Although they traditionally don’t fit together like other departments do, bridging the gap can create great results for the entire company.