The finance and sales departments have always viewed each other as hurdles to each other’s success. However strengthening the relationship between finance and sales is essential to foster a better working environment but also in managing the company’s exposure to risk.
Here are our 7 tips on how you can build the relationship between your Finance and Sales teams:
1. Compliment Eachother's Role
With no sales there would be no cash collections, with no cash there would be no business so it’s important that both teams see how they complement each other’s role and communicate about positive and negative client experiences. Enhance the sales team by providing weekly breakdowns on key performance indicators such as bad debt exposure, anticipated commission, payment terms and % of recoveries v value of sales.
2. Share Information Through Regular Meetings
Set up scheduled meetings between finance and the sales team so both parties can discuss success stories, potential issues and come up with mutual resolutions on how these can be rectified to aid the business going forward. This can be a valuable tool as it allows both departments to have a better insight to each other’s problems. Sharing information provides both teams with a better understanding of each other’s role and ultimately reduces the overall bad debt exposure for the company.
3. Show How Finance Benefits Sales
Monitor and report on key performance indicators, most profitable sectors to target, ageing debts, industry averages on payment terms and share this information for the sales team to utilize and target accounts that will pay within payment terms. It’s about demonstrating that finance can benefit their role and help them in targeting new accounts.
4. Clarify Payment Terms
Commission on sales can only be honored when cash is collected. It is important that payments terms are understood by both departments to ensure they actively work towards reducing days beyond terms (DBTs).
5. Change Your Title
Or at least the perception! Be seen as Managers of Risk and commercially orientated enough to acknowledge and proactively grow sales. Deal with issues, problems and queries face-to-face. Communicate with each other so that problems are resolved quickly and there is no misinterpretation.
6. Breathe the Brand!
Like the company receptionist, the finance department are increasingly becoming the brand identity of the company. Don’t be constrained to your desk or department, get up from your desk and walk around and proactively encourage communication with other departments. Credit Managers must be self promoting with what they do and their understanding of customers, sales and profit margins, changing the traditional perception of the "Sales Prevention Department".
7. Provide Profitable Prospects
The information the finance department can provide the sales department is gold dust. Finance has the ability to provide sales teams with detailed analysis of industry specific customers who pay and pay within agreed terms. Relationships can be enhanced further by segmenting prospects into geographic location, SIC industry code and credit ratings giving a total picture - increasing intelligent trading and profitable margins.