How do you balance sales and finance priorities and trade-offs?

1 Understand the metrics

The first step to balance sales and finance priorities is to understand the key metrics that both functions use to measure success and performance. For sales, these may include revenue, bookings, pipeline, quota attainment, win rate, customer retention, and customer lifetime value. For finance, these may include cash flow, profitability, margins, return on investment, cost of sales, and budget variance. You need to know how these metrics are calculated, how they relate to each other, and how they impact the company's overall financial health and strategy.

2 Communicate and collaborate

The second step to balance sales and finance priorities is to communicate and collaborate effectively with both functions. You need to establish regular channels of communication, such as meetings, reports, dashboards, and feedback loops, to share information, insights, and expectations. You also need to foster a culture of collaboration, where sales and finance work together to solve problems, identify opportunities, and support each other's goals. You can use tools such as CRM, ERP, and BI to integrate data, automate workflows, and streamline processes across sales and finance.

3 Align incentives and goals

The third step to balance sales and finance priorities is to align incentives and goals across both functions. You need to ensure that the sales compensation plan, the sales forecasting method, and the sales budgeting process are aligned with the finance objectives, such as revenue recognition, cash collection, and cost control. You also need to set clear and realistic goals for both sales and finance, and track and measure progress and performance against them. You can use tools such as OKRs, KPIs, and scorecards to align incentives and goals across sales and finance.

4 Manage trade-offs and risks

The fourth step to balance sales and finance priorities is to manage trade-offs and risks that may arise from conflicting or competing demands. You need to evaluate the pros and cons of different scenarios, such as offering discounts, extending payment terms, investing in new markets, or launching new products, and how they affect both sales and finance outcomes. You also need to anticipate and mitigate potential risks, such as revenue leakage, bad debt, compliance issues, or customer churn, and how they affect both sales and finance performance. You can use tools such as scenario analysis, sensitivity analysis, and risk management to manage trade-offs and risks across sales and finance.

5 Optimize resources and efficiency

The fifth step to balance sales and finance priorities is to optimize resources and efficiency across both functions. You need to allocate and utilize the resources, such as people, time, money, and technology, that both sales and finance need to achieve their goals and deliver value. You also need to improve the efficiency and productivity of both sales and finance processes, such as lead generation, contract negotiation, invoicing, and reporting. You can use tools such as resource planning, capacity planning, and process improvement to optimize resources and efficiency across sales and finance.

6 Learn and improve

The sixth step to balance sales and finance priorities is to learn and improve continuously from the data, feedback, and results that both functions generate. You need to analyze the data, such as sales performance, financial performance, customer behavior, and market trends, to identify patterns, trends, and insights that can help you optimize your sales and finance strategies and tactics. You also need to solicit and act on the feedback, such as customer satisfaction, employee engagement, and stakeholder satisfaction, to improve your sales and finance relationships and alignment. You can use tools such as data analysis, data visualization, and feedback surveys to learn and improve across sales and finance.