The Marketing-Accounting Interface

There is a lot of work linking marketing and finance. Unfortunately, at least from my perspective, nearly all of this has focused on linking markets to financial markets. Such work is useful but I would like more looking at the linkages between marketing and accounting. Sidhu and Robert’s article is an exception. They look at the challenges of marketing and financial accounting (external financial reporting).

One challenge they note is that “Much of accounting focuses on the past because the criterion of reliability makes accountant very wary of uncertain promises of cash — and that includes the future to a greater of lesser degree” (Sidhu and Roberts, 2008, page 672). Essentially telling us what happened, compared to predicting the future, is much easier. Financial statements that do this can be signed off on as ‘correct’ but they sometimes aren’t especially useful to anyone in making decisions about the future.

The authors give some ideas to help overcome the gap between financial accounting and marketing. They suggest that both look to shareholder value. (I would like a few more details here).

Probably the most notable thing is that what they said about the marketing-accounting interface eleven years ago still seems true to me. “The most surprising thing about the marketing-accounting dialogue is that there is no dialogue” (Sidhu and Roberts, 2008, page 676). Sadly this is still true. It isn’t exclusively an accounting or a marketing problem but both disciplines are diminished in value by this lack of dialogue.

Read: Baljit K. Sidhu and John H. Roberts. “The marketing accounting interface–lessons and limitations.” Journal of Marketing Management 24, no. 7-8 (2008): 669-686.