In order for your organization to be effective, all your departments have to work in unison. However, to someone with so many obligations, responsibilities and administrative tasks to worry about at the same time, it can sometimes be quite hard to see a direct link. For instance, both your marketing and your accounting are processes that are vital to the success of your enterprise; however, is there a direct correlation between the two? Well, here are top five reasons why these two aspects of your business need to go hand in hand for maximum effect.
1. Marketing expenses
The first and the most obvious reason why marketing and accounting go hand in hand is due to the fact that you have to handle your marketing expenses. You see, every marketing method that you consider using has its own ROI and cost per conversion, which is why you need some professional help to determine how much marketing investment you can actually make. Performing a proper financial forecast requires so much skill and effort, which is why it is essential that you have someone with more experience in the field to help you out.
2. Better decision-making
The next advantage of consulting your accounting before engaging in a marketing campaign is the fact that it provides you with a more rational way to pass judgment on the successfulness of your efforts. You see, an accountant can crunch some numbers and see exactly what the returns of the previous campaign were. Now, before we go any further, it’s incredibly important to understand that the decision-making isn’t just about the number. There’s more to the business world than just accounting. However, looking at returns can help you get one objective metric that you can use in the decision-making process.
3. Automation and IT integration
The next thing you need to consider is automating the process via options like Xero integration. The reason why this is so great is due to the fact that marketing, as well as any other field, has its own unexpected expenses. This means that you might pay for a premium version of the tool instead of a regular one and forget to add this to your list of expenses, thus creating a substantial deficit. With tools like Xero, you get a real-time view of your cash flow, which means that the odds that your marketing expenses will surprise you might go down quite a bit. Lastly, when it comes to confidentiality, protecting your business data is a top priority.
4. Generating reports for analysis
John Wannamaker once stated that even though he knows that the half of the money he uses on marketing is wasted, he can never know which half. However, in this fictional situation he used in making the famous quote, he could still calculate the return on his investment as a whole. Also, this approach is no longer as accurate. For instance, when it comes to digital marketing, you have some incredibly sophisticated analytical tools that can show you the value of each invested dollar. One example is the estimate that every $1 invested in email marketing generates a return of $44. Needless to say, when it comes to interpreting these results, your accounting department can be invaluable.
5. Pricing
The very last thing you need to understand is the fact that your pricing may greatly depend on your marketing. First of all, when it comes to calculating the profit, you can’t just take the cost of production without counting in the marketing investments that are required for proper product placement. It goes the other way around, as well, seeing as how the price of the product may dictate the way in which you advertise and promote it. For instance, you can pitch your product as luxurious, cost-effective or frugal. Making this decision without consulting your marketing first is most unwise.
Conclusion
The very last thing you need to understand is the fact that these two areas, although crucial, do not exist in a vacuum. They’re affected by your production, your HR, your customer service and all other services and aspects that make your business. This is why it’s always a good idea to take a holistic approach and focus on the bigger picture instead of trying to find a stand-alone solution for each of these problems. The latter approach usually causes more problems than it solves.
