It's a mistake to think that financial management is a tool only for the owner or manager of a company. In fact, it is a red thread that runs through all departments, uniting them into a single system and ensuring effective and coordinated interaction.

In this article, we will find out why it is important for companies to have well-established financial management in terms of marketing and marketing strategies. The example will be one of Finmap's partners, the Ukrainian digital company "Marketing Office", which provides comprehensive marketing services.

‍Financial Accounting From Day One: Marketing Office's Experience

"Marketing Office" was founded several years ago. The founder, Alina Kashapova, took a responsible approach not only to the selection of the team, but also to financial management from the very first days of the agency's existence. She had to work with companies that had not implemented financial accounting for decades, which caused constant problems in business and marketing.

Why Effective Marketing Requires Financial Management?

Financial accounting helps to make management decisions based on the real business situation. Without a clear financial record of income and expenses, it may seem that there is an opportunity to invest more in marketing to attract new customers. But a one-time injection of funds into marketing is not enough for stable and ongoing growth.

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It must be a constant, systematic process that is adjusted and updated. For example, a comprehensive website development and promotion can take 3-4 months. The client will receive the results of this marketing move in the future, and the funds for implementation should be spent throughout the process.
"Marketing Office" emphasises:

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Throwing money in and not drawing conclusions is a disservice to your business. Management of income, expenses, and financial results correlates with marketing processes.

So where do you get the money to reinvest in marketing on a regular basis?
Without a clear understanding of the company's state, a shortage of resources is unavoidable.

Only financial management can assess the state of the business and find the answer to this question. Financial accounting analytics shows:

• How much money is currently invested in marketing.
• What is the share of marketing costs in the overall structure.
• Which costs are subject to optimisation and reduction.
• Which costs are subject to optimisation and reduction.
• Whether marketing campaigns bring the desired result.

Therefore, marketing is impossible without a clear financial strategy, since it is finance that determines the opportunities for attracting customers, developing the brand and implementing strategic plans.

‍P&L Report: The Key to Informed Marketing Decisions‍

In order to avoid intuitive decisions and rely solely on numbers and facts, Marketing Office first of all refers to the client's financial statements, and directly to the P&L. If it is properly maintained and filled in, the marketing department can focus on the following issues:

1. Effectiveness of activities. The ratio of marketing expenses to company income will allow you to understand whether marketing provides an increase in new customers, whether sales volumes are growing, etc.  

2. Work with the assortment. The information from the report can give an understanding of which product or service needs additional promotion or replacement; which product/service is currently relevant to the client, etc.

3. Marketing strategy. Planning the financial part of marketing allows you to predict future revenues and avoid losses. Adjustments to the marketing strategy are always based on financial results.

Of course, in addition to these three issues, the P&L report can provide information on the trend and composition of marketing expenses, the type of customers (new or regular), the impact of sales department expenses, and much more.

Successful Business Control Through Finmap Reporting

"Marketing Office" Uses Finmap Not Only for P&L Reports. The company also actively uses the Projects report to keep track of work projects and various business lines.

Every month, we manage about 10-12 projects for clients. The more projects you have, the easier it is to get confused, so the expense accounting software makes life much easier.

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Alina Kashapova, as a business owner, constantly analyses key financial indicators to plan her business properly. The main ones are generated automatically in the Analytics section of Finmap, while the in-depth ones are calculated separately based on data from reports:

• Profit dynamics - whether the total profit is increasing according to the plan.
• KPI calculation - which performance indicators are realistic in the current period.
• Margin level - whether the margin meets the planned goals.
• Availability of free funds - whether there are funds for new expenses and investments.
• Analysis of future income and expenses - to avoid cash gaps.

Marketing and finance must work in tandem to achieve results, and regular financial management allows businesses to grow steadily and without unnecessary risks.

Financial management is not accounting, but a key element of a successful business. The use of modern tools such as Finmap helps entrepreneurs stay afloat, effectively manage financial flows, and grow.

Set up financial management with Finmap and start building a successful business strategy today!