When accounting and marketing work together, businesses are put on a clear path for success
“It does not matter if you have revenue if you do not have cash.”
Marketing and accounting seem like two very different industries with two very different goals.
This couldn’t be further from the truth.
Marketing and accounting seek the same mission: to create a successful business that brings in money, increases sales and runs a positive cash flow. Marketing efforts are focused on enhancing the top line (revenue) of a business. Accountants are focused on maintaining the bottom line (net income), as well as cash flow and financial reporting.
When marketing agencies work with accountants, they carve out a clear path for success.
Accountants help marketing record and analyze the right kind of data
One of the roles of an accountant is to compile financial information into a digestible format for decision makers. This includes both revenues and expenses, and often goes down a level to show which customers or products are most profitable.
The goal of a marketing team is very complementary. Without marketing to analyze where to advertise, what’s working and what’s not working, promoting a business stalls.
In an ideal world, accountants and marketers analyze data that helps a business consistently and predictably increase the bottom line. However, many marketing agencies come under fire for not prioritizing data analytics or for not analyzing the data that really matters.
Enter next generation Certified Public Accountants (CPAs) who use cloud accounting software and other technologies to regularly track business financial data. They also monitor key predictive indicators (KPIs). KPIs include social media engagements, social media followers, email list growth, percentage of leads closed, etc.
When this data is combined with the creative minds of a marketing agency, the whole picture of a business begins to form. Opportunities also start to open up — including new revenue streams, employee growth plans and exit strategies.
Accountants provide marketing with a holistic view of a business
It only makes sense for marketing and accounting to share information and to collaborate. This relationship helps to better analyze where a business can improve efforts and goals. At the same time, business owners will garner a a greater understanding of how to save time and money.
By combining marketing and financial data, an accountant can estimate the lifetime profitability of a customer. When combined with attribution analysis, it’s possible to calculate the lifetime profitability by channel or platform. Once the lifetime profitability is estimated, it then becomes clear how much the business should spend on customer acquisition. From there, we can determine how many people need to see the product or service, based on conversion rate, which will then inform whether or not advertising on a particular channel or platform will be profitable over the long-term.
Similarly, accountants can help the marketers better understand where they can increase cash flow for the business. Which types of clients pay on time? Which sales channel has the highest ROI? Which types of clients and services are most profitable? These are key questions that need answers in order to operate efficiently. With data analysis that reveals where improvements can be made, marketing agencies can use that information to create new and different marketing efforts to reach the right customers.
Accountants increase marketing efficiency, return on investment and return on effort
For any business, a return on investment or return on effort will be important in determining where marketing dollars are spent. Return on effort does not only apply to how intense a marketing effort is, but also the human capital that goes into making a marketing campaign work.
With marketing teams, efficiency often becomes a challenging process. Between gathering and pitching ideas and drafting product or ad samples, the efficiency and return on investment compared to the effort is often lacking.
Marketing agencies are aware that their processes need improvement. However, it oftentimes takes a new perspective to show exactly where these improvements can be made. Today’s professional, data-driven, tech-focused accountants are highly effective strategic partners for marketing agencies because they offer a no-nonsense, impartial perspective.
After all, numbers don’t lie.
Because accountants view efficiency from a financial perspective, they have the ability to show marketing agencies where they can lessen costs without a decrease (and often, an increase) in quality.
Accountants ask questions like:
• How many people does it take to complete a marketing project from start to finish?
• How much time does the marketing team put into ideation of a product or service?
• How much effort goes into creating an idea versus the ability to sell that service or product once the process of ideation is completed and a product or service is live on the market?
All of these efficiency-based questions create a better return on investment and return on effort.
Accountants monitor marketing trends
Marketing agencies and other marketing and sales professionals are tasked with monitoring how people respond to promotional and advertising efforts. This information helps accountants to better understand where to increase budgets and to decrease spending based on the influence of consumers and their buying habits.
Perhaps the biggest challenge facing marketing agencies and in-house marketing managers is showing their own effectiveness. Many business owners find marketing and sales abstract ideas at best, which in turn means they don’t prioritize marketing and sales in their operating budget.
Data-driven accountants can help create a marketing tracking system that shows how marketing investments translates to an increase in sales, more earnings for the business and moving toward revenue goals for each quarter or year. As automation become more streamlined, this kind of data analysis is more important than ever.
Accountants need to be focused on not just what’s happening in the business but what’s happening to similar businesses and within the industry. One reason for this type of monitoring is accountants need to know what seems reasonable and what the business needs to plan for. Accountants need to know what’s going to be happening on the outside that’s going to affect the inside. If accountants know that there are hard trends, or future facts, that are going to be impacting the business, then that information should be shared with the marketers too. The higher the level of collaboration between accounting and marketing, the higher the probability of success for the business.
Accountants can help budget
A marketer’s dream is an unlimited budget, but the reality is a limited budget with a strict scope of a project.
Accountants can help businesses stay on track, or help create a surplus, with their budgets by sharing financial data collected across marketing campaigns. When initiatives run over budget or past schedule, the whole organization suffers. When overruns become habitual, then it becomes almost impossible to have any sort of meaningful planning effort. In this regard, accountants can act as a second set of eyes to make sure marketing efforts and budgets are on track.
Accountants can become great strategic partners
When it comes to goals that align with mission, accountants and agencies have complementary talents, skills and perspectives to bring the whole picture of a business into focus. Large businesses are not the only ones who can benefit from such a team effort. Small businesses and even solopreneurs with a one-person marketing or accounting team can benefit from a team working together to increase positive cash flow.