Bridging the gap between Sales and Finance
The sales and finance relationship is tricky, but necessary. The Sales Team interacts with current and potential customers. The Finance department is responsible for ensuring the company’s cash flow can support Operation’s efforts to meet these customers’ needs. Following is an approach to make the partnership easier –
Establish Process with Controls
Sales activity should be flowed out to identify bottlenecks and risks. If need be, policies should be established. For example, it is difficult to ensure that decentralized national sales forces obtain the proper approval signatures from both the client and senior
At the beginning of the year or at the time a new
The most successful sales team I worked with was provided a simple financial model in
There will be situations when the model does not show the relationship is as profitable as required, by Finance department standards. In this case, if the sales manager believes that the relationship should be established for strategic reasons, they need to have the ability to escalate the approval. There are times when entering a relationship which is not as profitable initially, makes sense after some seasoning. Other reasons may include a new product/program introduction or establishing a referral relationship.
Sales activities should be tracked via a sales manager specific scorecard which shows each individual and each of the contracts they manage. Examples of items to be included – revenues less discounts used, less marketing dollars used, customer service hours provided, commissions paid… When this information is presented in one document, it is possible to see the profitability of every sales manager and the profitability of each relationship.
Scheduled Meetings to Discuss Results
Tracking reports should be discussed at monthly Sales meetings that include the Sales Executive and the responsible Finance Executive. As the Sales Manager is intimately involved with the relationship, details not obvious by "the numbers" can be learned, which may impact collections and the future of the business.
The process established above provides a controlled,
What is your experience?
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