How Sales and Finance Can Learn to Love Each Other

Finance Insights for Professionals

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Thursday, February 14, 2019

Sales and finance departments can sometimes clash, but by working together they can become an efficient collaboration that benefits the whole company.

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In business, it’s very easy to think about all the different departments in isolation to each other. They have their own personnel and chain of command to keep them functioning, with special expertise to maximize efficiency.

The reality, however, is that the firms that work best have good systems in place to allow departments to easily interact with each other. Sales and finance, for example, may seem unconnected, but encouraging them to love each other can provide mutual benefits.

The differing roles of the two departments

It is widely known that at a fundamental level, sales is responsible for expanding the customer base and finance works to achieve profitability. The two cannot work without the other and a breakdown in communication can have catastrophic consequences for the bottom line.

For those in finance it is important to remember that for sales, the main goal is to close deals by selling the company’s goods and services. This cannot be done in isolation and often means liaising with the marketing department to create strategies, but this often involves spending money.

Finance must keep track of operational budgets and ensure that every part of the company is working within set parameters. Looking at the long-term and short-term forecasts of the sales department, credit policies can reflect the needs of this area and the company as a whole.

Friction between sales and finance

In many companies the relationship between sales and finance is one where they are competing to achieve different aims. While sales is trying to bring in new custom, it is constantly battling for a bigger budget to attract new clients whilst the finance department is trying to curb its spending and therefore increase revenue.

Areas where sales and finance must work together

When it comes to tasks such as filling out expenses, invoicing clients and commissioning work there is no way that sales can work without finance and vice versa. Without efficient processes and workflow systems between the two departments, things can quickly become a battle of wills, so it’s important to address any issues right from the beginning.

How to get the two departments working in harmony

When constructing an annual plan for the year, each department within a company should consult finance for guidance. This will include sales and this briefing of the year ahead should mean there will be fewer contentious issues later between sales and finance.

Revenue forecasting is a very important area for any business, as it will determine what cash flow looks like for the year ahead. Any shortfall could have serious consequences for a firm, but personnel in the finance department should have the right skills to carry out this task in a realistic fashion. As long as this corresponds with the way that sales works, the overly optimistic nature of sales staff will often be tempered by the logic of finance.

Sales can often find that finance is on their side and help to save them money in a number of areas. Those working in finance are likely to have good analysis skills, meaning they can look objectively at a situation and come to a measured conclusion. Taking this on board will be beneficial for the whole company.

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