The Relationship between Marketing and Accounting
Although many business owners think that their marketing and accounting departments work completely independently of one another, aside from when the marketing department needs money and the accounting department needs to verify that costs can be covered, the truth is that these two actually work hand in hand.
Continue reading to learn more about the relationship between marketing and accounting in business.
Working Together to Determine the Success of a Campaign
If your business implements a marketing campaign, it is important to gauge the results of that campaign correctly so that you can determine whether or not it would be prudent to pursue the same kind of campaign again in the future.
While the marketing department may find that gross sales went up as a result of the marketing campaign, you should also consult with your accounting department to ensure that the costs of the campaign weren't too high. Taking both of their observations into consideration will help you make the best decisions and keep the most amount of money in your business.
Creating Long Term Strategies
When it comes to running any business successfully, regardless of size, it is vitally important to come up with both short term and long term strategies that will lead towards greater profits and ongoing success. And when it comes to long term strategies, in particular, it is up to your accounting and marketing teams to work together to make these plans be successful. They should be able to develop cost-effective and comprehensive ongoing plans. And both of these departments will be charged with providing reports that can be used to gauge the success of the plans, as well as guide the development and implementation of future plans.
The Costs of Marketing
Whether you use in-house accountants or chartered accountants from Toronto to keep track of your business's finances, it really is up to the accounting department to communicate with the marketing team within your company to let them know if there are enough funds for the marketing scheme that they are hoping to implement.
Marketing and advertising costs can add up quickly, and businesses often limit the amount of money that can be used for campaigns, so the marketing department may have big plans that simply can't happen if the accounting department does not approve them. Because the marketing department can't always keep accurate track of its expenditures, it is up to accounting to keep them in line.
Business managers need to know the ratio between their costs and their sales. This helps them determine not only how much money was spent and how much was made, but also how much each department spent on a particular expenditure.
In order to get the right ratios, marketing and accounting need to work together closely. They should compare marketing and advertising expenses with gross sales to determine the effectiveness of all campaigns. This will help accounting determine if more money needs to be allocated towards marketing expenses, or if the funds should be reduced instead.