There is no denying that a robust finance and sales department helps entrepreneurs in attaining their set goals. If any of the two departments lack, it will directly impact the profit margins and revenue.
However, many budding entrepreneurs fail to understand the interdependence of these departments. Consequently, they focus on the finance department and put sales on the black burner.
It is critical to understand that if the sales department ceases to achieve its goals, the financial goals will go down the drain. Similarly, all the efforts made for business success will be void. Using technology to avail real-time data, analyze and strategize the accounts, and forecast is creating a hitch in sales performance.
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Barriers Between Finance And Sales Departments
The finance and sales department are like two pieces of a puzzle. However, how the money needs to be spent often causes disputes between the two departments. The company’s expectations from the sales department are often high, but the budget assigned to them is limited. This creates chaos between the teams and affects the company’s goals.
On the flip side, the finance department complains that even if the conversion rate is high and sales are increasing, the amount spent to achieve these sales is high. So the actual revenue earned by the organization is pretty less considered to expectations.
This brings the question- how can you ensure that the finance department is working in close relation with sales? Let’s learn!
1. Explain The Value Of Sales Conversion
The sales department works on the principle of “volume is king.”
While it is indeed the driving force behind conversion and high sales, it restricts the staff from looking beyond the sphere of volume. For them, higher sales are equal to higher revenue despite the possible financial ramifications.
You need to make departments understand that uncertain circumstances such as inflation, poor supply chain, irregular demand pattern, and pandemic affect the total sales volume. It will make them understand the true value of sales conversion.
But how will it benefit the business?
Well, when sales are made, prioritizing the volume, the products or services are offered to ease the trade. It neglects the RoI of transactions. On the other hand, when the team focuses on value, they will consider the customer experience, profitability, and objectives. It will facilitate transactions by attracting more customers and building a loyal base.
The finance department can play a significant role here by providing the appropriate and accurate data to other departments related to existing customers’ demanded products and forecasting the sales trends.
Thereby, using data, companies can turn your product into a want.
2. Build A Bridge Between Growth And Profit
If a company makes high profits, it does not necessarily mean it is growing at the anticipated rate. As a matter of supreme fact, many CFOs prefer the middle market to prioritize top-line growth instead of margin growth.
Nevertheless, for this strategy to work seamlessly, the growth equitation needs to include the sales value. Only then will corporations be able to accelerate profits.
In simple terms, teams need to focus on profitable growth by finding a balance between earning revenue and deploying resources. Certainly, building this bridge will be challenging, but that’s where teamwork and department understanding comes into the picture.
The sales team needs to report accurate figures and become accountable and transparent for their efforts. In addition, they need to be vigilant about possible sales opportunities. It will ensure that your company is ready to close the deals and earn RoI. Of course, they need to work with finance to create an effective strategy and forecast.
3. Train Your Staff
Finance and sales teams often recruit new people with better skills and practical knowledge. However, every organization has its own working style and culture. Making the new hirees well versed with the fresh environment and procedures is critical to ensure that the overall efficiency of the team improves. It further facilitates the company’s goal accomplishment.
In essence, you should train your new employees. The training could be via technology support, wealth advisor support, or investment support. It will maximize the company’s performance by having dedicated support for different functions.
Not to mention from practice management and back-office support to the deployment of technology and financial plan creation. Such training and support will help the team to put their best foot forward toward growth.
It will make certain that the team spends more time on their operations- making sales and improving the company’s wealth and less time discovering the loopholes and enhancing them.
4. Integrate CRM With ERP System
A prime reason that affects finance and sales is disparate data recorded in different systems. Studies have shown that CFOs tend to reduce the sales department’s forecast by 25% per month for numerous causes.
The reason behind the poor forecast is incomplete data on the CRM (Customer relationship management) system.
The same is the scenario in the sales department as they complain about a lack of insights from the ERP (Enterprise resource planning) system.
Stating the obvious, both systems are critical for the business to plan its goal and evaluate its progress. So how can you deal with the lack of appropriate data issues?
The practical approach is to integrate CRM Software with ERP. It’ll ensure that all the necessary data is available in a single system, that’ll save the employee time. Moreover, it will access more data to drive accurate conclusions and provide teams with the opportunity to work effectively.
Note: You can invest in the CRM ERP module for the same purpose. It will make it effortless to share customer information, tap into new opportunities and address customer service issues. Thereby, customer service will improve, and sales will boost.
5. Understand The Goal Of Different Departments
Last but not least, both departments need to understand each other’s objectives. Otherwise, modifying the team priorities will become daunting. As a result, the company’s revenue and growth will get hampered.
Similarly, the financial team needs to learn about the sales target to accurately forecast the demand rather than setting unrealistic expectations from the sales personnel.
Lacking this mutual understanding affects the coordination between the teams, hence the growth strategy. So, it would be best for the CFOs and financial advisors to meet the sales department frequently and ask questions relevant to the data, market-share growth, strategy effectiveness, and growth beyond the core operations.
The answers to all these questions will provide necessary insights to both departments that they can use to enhance the team’s performance.
Pro Tip: The key to a healthy and successful relationship in finance and sales is having a practical and flexible approach. Listen to the queries and concerns of the department genuinely. If there are ideas that can potentially improve the workflow, be open to adapting them or investing in them. The CFOs need not be gatekeepers. Instead, they need to be facilitators.
To Sum It All Up
When the sales and finance department works in a synchronized manner, it will aid the accomplishment of business goals. However, to ensure that the coordination stays firm and effective, make sure to learn about the needs of both departments. Make efforts to address the possible issues to streamline the company workflow.
I am a passionate, adventurous, and insatiate learner who loves to write about the latest technology trends. My experience working in an MNC has motivated me to understand that there are certain niche requirements for writing strategically about brands’ messages towards people’s interests which I’ve mastered over time through trial and error of many projects under various clients across diverse industries. It is my honest effort to put my experiences and knowledge of industry towards readers.
