There is a potential tension between a company's marketing efforts and its accounting processes. Marketing is based on creativity and it is about envisioning the future and executing scenarios that can bring about interesting changes. Accounting is the focal point for maintaining financial confidence, and its activities are geared towards ensuring a company's performance thanks to its sound financial position. Despite this apparent dissonance, the marketing and accounting departments can actually be powerful allies if they are committed to working together to achieve financially viable results.
Accounting and Marketing meet on the following 3 main aspects
Managers who know how to get marketing and accounting to commit to working together will be highly effective.
1. Marketing Budget
The accounting department prepares a marketing budget for the marketing department to use for the marketing campaign. This budget is based on the company's overall financial picture, including how much money the company can realistically reserve. The accounting department is also responsible for evaluating the results of a marketing budget in terms of return on investment, or measuring the results of a marketing campaign, and assessing whether its contribution to the company's overall revenue Is it worth the cost or not?
2. Valuation
Price is an important factor in any marketing campaign. Deciding how much to charge for a product or service makes a statement about the value of a business and the type of customers the business intends to attract. An expensive product must distinguish itself on the basis of quality or reputation while an inexpensive item can compete mainly on the basis of price. The accounting department can evaluate the profits to be made with the different pricing options and determine if they are financially viable.
3. Estimation
The accounting department is responsible for creating forecasts, or forecasts, that compare revenue and expenses to determine expected profit. A marketing department may be tempted to make unrealistic claims about how much revenue a new product or marketing campaign will generate. It is the responsibility of the accounting department to evaluate these projections rigorously against objective variables that affect the results such as the company's financial track record and the financial demographics of its target market. it.