Finance for Marketing Practitioners

Today was the first day of the course that I will be facilitating for the next six Saturdays. I have been asked to handle this course for the past three years. Participants to this course are typically marketing and brand managers, but I have had a couple who are business owners. Honestly, it is more difficult to handle this course because of the diverse backgrounds of the participants. Nevertheless, I find it very stimulating because I learn about the different companies from the perspective of Marketing people and entrepreneurs.

Few people in the corporate world could deny that there often exists a conflict between Finance and Marketing and Sales people. And I attempt to provide a framework by which everyone can work together harmoniously.

In this course, I emphasize the big role that Marketing and Sales people play in determining the profitability of a company. I share that the term "topline" refers to the Revenues or Sales line and all components of this Income Statement item is really Marketing and Sales driven. Everything starts from the number of products (or services) that the company is able to sell and how these are priced. Without the revenues, obviously there won't be any income.

I also share the perspective of a Finance person. One of the responsibilities of the Finance person is to ensure that financial resources are utilized efficiently. Typically, he would like to make sure that money is used as planned and the use of such funds will bring benefits to the company, thus the importance of the Marketing person having some knowledge in preparing a Cost Benefit Analysis. The Cost Benefit Analysis is an important factor in presenting a good Marketing Plan that would ideally include advertising and promotions costs.

Some of the topics that are included in the curriculum are:

1. Understanding and Analyzing Financial Statements ( how problem areas can be detected just by analyzing the financial statements)

2. The use of financial and accounting tools in marketing decision-making: breakeven analysis, setting sales quotas, pricing, deciding on product mix, deciding on which product lines to maintain or drop, etc.

3. Financial forecasting

4. Working capital management and the role of marketing and sales : for example, their role in good inventory management and credit and collection management.

5. Time Value of Money

6. Capital Budgeting , which includes Cost Benefit Analysis

I encourage that Finance and Marketing and Sales people interact frequently to be able to understand each other's perspectives because these people play an important role in ensuring a company's profitability and long-term sustainability.