How Can FP&A Bridge The Gap With Sales?

Last updated on Friday, December 11, 2020

How can FP&A bridge the gap with Sales? This question has long been a challenge faced by these business departments. The role of sales teams is to spend what is needed to build and maintain a customer base. Contrast this with the role of the finance team, which is to create budgets, forecasts, and projections of spend and income, and the potential conundrum is clear. 

However, this does not have to be the case. There are several ways in which Financial Planning & Analysis (FP&A) can close the distance and work cohesively. By focusing on communication and consistency, the two departments can unite to improve overall efficiency.

Looking At The Bigger Picture

One of the main reasons for interdepartmental discord is differing priorities. 

Sales teams aim to please customers and are largely focused on hitting their sales targets. Because of this, they are often happy to throw money at smaller problems that arise, generally to keep customers happy. This can include changing prices for customers to improve their experience and hit sales targets. 

By prioritizing customer experience and immediate goals, longer-term budgets and revenue plans take a back seat. Taking this short-term view puts the company’s wider goals and initiatives at risk as long-term revenue growth targets are missed. At this point, the finance team has to step in to reassess broader sales targets and quotas, often to the frustration of the sales team.

So How Can FP&A Bridge The Gap With Sales?

Financial Planning & Analysis allows companies to measure and plan their business operations, providing senior management and executives with the information and analysis they need to make major financial, operational, and strategic decisions for the organization. By analyzing the company’s income statement and operating performance, FP&A helps build forecasts to ensure the company achieves its long-term strategic goals. 

Financial planning and analysis requires an understanding of the company’s historical performance, key trends, and assumptions that may impact future performance. Therefore, a key step to bridge the gap is to give the company the ability to consume, access, and create revenue forecasts directly and in real time, with little to no manual intervention, from the system that Sales lives and breathes in: their CRM. By working together to plan efficiently, they can align priorities to maximize the company’s revenue growth potential.

1. Data-Driven Strategizing

Inaccuracy and ambiguity in any context will drive departments and even entire companies apart. Being on the same page is particularly important when it comes to goals, budgets, and the reasons for implementing them. 

Finance can run the numbers as many times as they would like. However, without evidence to support the introduction of new strategies, they have no chance of getting sales teams onboard. This is where data comes in.

FP&A uses company and market data to create long-term strategies backed up by real facts and figures. Rather than presenting sales with a baseless tight budget, finance teams can illustrate their reasoning. 

Whether it is budget allocation or sales forecasting, data helps teams come to the right conclusions. FP&A organizations can then use this information to consider the best solutions together with the sales team. 

By using consistent and accurate data, like the revenue forecasts generated by revVana directly within the Salesforce CRM, the company can keep all its teams on the same page. Not only will this lead to better business strategies, but it will also help in bridging the gap between FP&A and sales.

2. Automate Data Collection and Processing

Using data is the first step towards improving overall consistency and ultimately towards bridging the gaps with sales and finance. The next step is automation.

Finance and sales teams see the same company from very different angles. They may have entirely opposing gut feelings about the same matter. For this reason, having access to consistent, accurate facts is essential and will help to bridge the gap between departments. 

Automating the collection of data eliminates the risk of manual human error and gives FP&A reliable information. They can then work together with the sales team to pinpoint key insights and build an effective sales growth strategy. 

Rather than working off mixed or conflicting data sets, the two can find a single source of truth. Working with the same information leads to better teamwork and more efficiency. 

The revVana platform standardizes the organization’s view across its CRM and financial applications, automatically generating forecasts for the teams to draw insights from. Automation ensures that data is accurate, and solid metrics allow FP&A and sales teams to unite and strategize effectively. 

Deciding how best to use the information gathered is a cross-departmental responsibility and is crucial in working cohesively.

3. Actively Collaborate

Different departments have varied levels of association, but as a general rule, the more communication, the better the relationship.

Communication between the finance and sales teams is rarely proactive and generally limited to checking up on performance. A yearly check-in or quarterly meeting does little to bring the two together.

In fact, this lack of effective communication only pushes the two departments further apart. It also means that both teams are missing out on the potential for growth, both for the business and in the office itself. 

Success is not limited to financial growth. It incorporates, among other things, the quality of customer experience. Evidently, this is something that is best analyzed by the customer-facing sales team. 

By recognizing this, financial teams can identify internal and customer pain points. They can then work with the sales team to tackle them, taking into account the unique perspectives from both departments. 

Reaching out regularly is crucial to developing a productive rapport between the two teams. 

FP&A departments can develop more effective strategies and bridge the gap with sales and finance by simply facilitating communication. Speaking with the sales team and actively seeking out this collaboration allows analysis of KPIs and a far higher level of efficiency.

With revVana, Finance and Sales teams now have access to the critical sales and revenue information they require in a single platform. Combine sales booking management data with historical performance trends to produce dynamic revenue plans and forecasts, and revenue realization becomes attainable.

4. Allow For Margins

Sales teams are working with customers on a daily basis. The success of their strategies depends on customer behavior and can be unexpectedly volatile. For this reason, strategy changes may have to be implemented at short notice. 

Sales teams have to be flexible and fast-acting, sometimes without the focus on longer-term targets. 

Finance departments, however, have broader agendas. The sales team is one piece of the puzzle when it comes to achieving their wider goals. However, it is a crucial piece. 

Finance teams cannot expect sales strategies to work seamlessly every time, especially when sales teams themselves know this is not the case. In order to bridge the gap between the departments, finance teams need to embrace the flexibility that sales require to succeed.

By using the revVana platform natively implemented within the Sales CRM, Sales teams now have the visibility to the real-time implications of their sales activities on the company’s longer-term targets. 

5. Be Flexible In Planning and Analysis

FP&A is key to achieving this flexibility. It does not end when quarterly strategies are first determined and established. The analysis continues throughout the entire lifecycle of the process, adapting and developing plans as needed along the way.

By meeting regularly with sales management in their company, FP&A organizations can use KPIs to evaluate strategy. Both departments bring unique business perspectives to the table. These enrich the assessment and lead to more accurate revenue forecasts and better overall efficiency.

When planning is approached flexibly, the two departments can work together to find the best solution. In this way, they avoid wasting resources on an ineffective plan. 

Flexibility is key when it comes to hitting targets, short- or long-term. It can help in aligning FP&A and sales, as well as help companies, reach better cross-departmental solutions.

In A Nutshell

Bridging the gap between FP&A and sales may seem like a challenge, especially within more rigid corporate structures. 

Improving company-wide communication brings finance and sales teams together to create effective strategies. Providing consistent, accurate data keeps both teams on the same page, developing shared goals, and working efficiently to achieve them.Using a software platform, like revVana, companies now have the ability to confidently bridge this gap between Sales and FP&A to forecast revenue and maximize a company’s growth potential.

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