How Do Accounting & Marketing Work Together?

There is a built-in tension between a company's marketing efforts and it's accounting processes. Marketing is based on creativity, and it is geared toward envisioning the future and implementing scenarios that can bring about exciting changes. Accounting is the source of financial accountability, and its activities are geared toward making sure a company's operations as a whole are fiscally sound. Despite this apparent dissonance, marketing and accounting departments can actually be strong allies if they are committed to working together to achieve financially viable outcomes.

An accounting department sets a marketing budget for a marketing department to use for a marketing campaign. This budget is based on a company's overall financial picture, including how much money it can realistically spare. An accounting department is also responsible for evaluating the results of the marketing budget in terms of return on investment, or measuring the results of a marketing campaign and evaluating whether its contribution to the company's overall revenue has been worth the expense.

Pricing is a vital element in any marketing campaign. The decision of how much to charge for a product or service makes a statement about how much a business feels it is worth and what type of clientele it intends to attract. An expensive product must distinguish itself on the basis of quality or prestige while an inexpensive item can compete primarily on the basis of price. An accounting department can evaluate the margins that will be earned with different pricing options and determine whether they are financially viable.

An accounting department is responsible for creating projections, or forecasts comparing revenue and expenses to determine anticipated profit. A marketing department may be tempted to make unrealistically hopeful claims about how much revenue will be generated by a new product or a new marketing campaign. It is the responsibility of the accounting department to evaluate these projections with a close eye on objective variables that influence outcomes such as the company's financial track record and the financial demographics of its target market.

Accounting provides perspective that enables a marketing department to understand how its endeavors fit in with a company's overall financial goals. Although a new product or marketing campaign may seem promising, its viability will depend on whether the business is at a point where it can shoulder the expense out of operating capital and, if not, whether it makes financial sense to incur debt and interest payments. If business is slow overall, a new product could add profit and revenue, but it could also cost more than the business can afford. Accounting weighs these variables in order to make comprehensive, thoughtful decisions.