Keith Ward in his great book Marketing Finance addressees success factors in managing at the marketing finance interface. He starts by noting that historical analysis can’t change the past. Okay, that is pretty obvious, but the implication that historical analysis is mostly only useful if it “can be applied to make the future better” (Ward, 2004, page 293) seems often to be lost on analysts. Sometimes the reader looks at an analysis and admires it as a thing of beauty but one isn’t sure what happens next. “Unfortunately many management accounting processes overemphasize the purely historical reconciliation aspect of reporting” (Ward, 2004, page 293). It isn’t enough to find out what happened. Analysis should change something going forward and so “Marketing finance must be totally involved in both planning and controlling marketing activities” (Ward, 2004, page 293).
Later Ward turns to his advice for moving towards more successful management at the marketing finance interface. He has ten critical success factors — a bit of a magic number — but I’ll just highlight three that especially resonated with my thoughts.
Critical Success Factor (2) is that, “The marketing finance system must communicate the necessary information to the marketing managers making these key strategic decisions” (Ward, 2004, page 305). Don’t let accountants decide the format. (To be clear I’m not blaming accountants. Marketers may often ignore the accounting information rather than supplying the sort of feedback the accountant needs to improve it and so can’t really complain if the output isn’t useful).
Critical Success Factor (4): “Focus on, and measure, the intangible marketing assets of the business” (Ward, 2004, page 306). Brands and other marketing assets are major assets, if you don’t know much about them you don’t know much about your business.
Critical Success Factor (6): “True financial control can only be exercised in advance of financial commitment” (Ward, 2004, page 206). To be focused on decision support effective financial records need to understand commitments as they are being made — not when the invoice comes through. Effective record keeping can do this — but it isn’t always easy.
Read: Keith Ward (2004) Marketing Finance: Turning Marketing Strategies Into Shareholder Value, Elsevier