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You're navigating conflicts between sales and finance. How can you align revenue projections effectively?

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In corporate finance, aligning revenue projections between sales and finance teams is a delicate dance of numbers and expectations. Sales teams, often optimistic, aim for high targets to motivate their efforts and showcase potential growth. Finance teams, tasked with ensuring fiscal responsibility, may view these projections with a more conservative lens. The key to navigating these conflicts is not just in finding a middle ground, but in creating a collaborative process that respects both perspectives and seeks to establish realistic, achievable goals for the company.

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Tina Stride CRME

Revenue Management Expert | Educating, Empowering & Driving Results
Matija Nakic

CEO and Co-founder @ Farseer ? Third gen FP&A platform

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Jarjan Shazli

Expert B2BI B2C I FMCGI Shopper Marketing I Channel Management

1 Understand Roles

Understanding the distinct roles and motivations of sales and finance teams is the first step in aligning revenue projections. Sales teams are driven by targets and incentives, leading them to be optimistic in their forecasts. On the other hand, finance professionals focus on risk management and accuracy, which can result in more conservative figures. Recognizing these differences allows you to facilitate a dialogue where each department appreciates the other's contributions and constraints, setting the stage for more collaborative forecasting.

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Tina Stride CRME

Revenue Management Expert | Educating, Empowering & Driving Results
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It is so important that each department understands the importance of the other department and how they impact the overall company. Understanding what they do day to day is important and the challenges that they face.

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Matija Nakic

CEO and Co-founder @ Farseer ? Third gen FP&A platform
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It's super simple. Sales should commit to a plan. The sales team needs to forecast compared to that plan monthly or weekly, depending on the length of the sales cycle. The forecast for B2B will come from a CRM from which you want to get weighted revenue from the pipeline. E.g. a sales opportunity of $100k with 50% chance of closing is $50k of weighted revenue. Build 3 FC scenarios - pessimistic, mid, and optimistic. Finance should participate with sales on a monthly meeting to analyze the forecast and ask questions.

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Jarjan Shazli

Expert B2BI B2C I FMCGI Shopper Marketing I Channel Management
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Need to understand the situation and circumstances. Sales strategy and plan based on previous trend and market situation and competition. Need clear objective with monthly coordination meeting b/w all relevant department including Supply Chain which has very critical role in financial and profitability vs sales. Open discussion on factor's are impacting conflict in meeting and set way forward for months ahead as Team to achieve core organization set objectives.

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Neville Ellis

"Sales & Marketing Leader | Expert in CPG Sales Management, Lead Generation and Promotional Campaign| Demonstratable record of growing global, regional and local brands for multi-national companies."
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Aligning reviews projections between sales and finance requires clear communication, mutual understanding and collaboration, Scheduled regular meetings between sales and finance teams to discuss revenue projection and expectations. What is often misunderstood by finance teams that they are working for sales and they must look at the bigger pictures and possible future earnings when sales increase. However what is critical is that sales must be able to sell the vision to finance teams they being the first customer utilizing data

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Keshav Kumar

Transformational Sales & Distribution Leader| Proven Team Leadership & Market Execution Expertise
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I have found the following helpful while navigating conflicts between sales and finance. -establish openness in communication by regular meetings to make both understand each others perspectives. -define goals clearly & align with defined metrics on progress & outcomes. Timely reviews of the same is vital. -build collaboration & work inclusively promoting ownership & accountability.

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2 Data Analysis

Robust data analysis is crucial for reconciling differences in revenue projections. By examining historical sales data, market trends, and customer behaviors, you can establish a factual basis for forecasts. This approach not only helps in creating more accurate projections but also provides a common language for both sales and finance teams. When both teams have confidence in the data, they are more likely to reach a consensus on realistic revenue goals.

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Carla Lima, CPA, MBA

Chief Financial Officer
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Financial planning and analysis (FP&A) refers to the processes designed to help organizations accurately plan, forecast, and budget to support the company's major business decisions and future financial health.

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Keshav Kumar

Transformational Sales & Distribution Leader| Proven Team Leadership & Market Execution Expertise
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I agree & an example I have seen is weekly progress (data driven approach) review over commitment/planned Vs current progress helps both the parties to fine-tune expectations & actions.

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3 Set Objectives

Setting clear objectives is essential when aligning revenue projections. These should be specific, measurable, achievable, relevant, and time-bound (SMART). By establishing SMART objectives, you create a framework that both sales and finance can agree upon. This ensures that targets are not only ambitious but also grounded in financial reality, allowing both teams to work towards the same goals with a shared understanding of what success looks like.

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Carla Lima, CPA, MBA

Chief Financial Officer
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Finance teams are increasingly expected to handle both the ad hoc analytical and the recurring tasks. While Strategic Finance activities and traditional FP&A tasks are closely related, they have some distinct focus areas.

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4 Communication Channels

Effective communication channels between sales and finance are vital for resolving conflicts and aligning projections. Regular meetings, clear reporting lines, and open forums for discussion can help bridge the gap between the two departments. Encourage an environment where each team can openly share insights and concerns. This transparency fosters trust and allows for a more integrated approach to financial planning and sales strategies.

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Keshav Kumar

Transformational Sales & Distribution Leader| Proven Team Leadership & Market Execution Expertise
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Completely agree. Encouraging regular meetings & being open in discussions helps bring in perspectives on both sides. Thus a meeting once a week adds value.

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5 Scenario Planning

Scenario planning can play a pivotal role in aligning revenue projections. By considering various 'what-if' scenarios, both optimistic and pessimistic, you can prepare for different outcomes. This method allows sales and finance to understand the potential impacts of different market conditions and customer responses on revenue. It also encourages proactive thinking and helps both teams to develop flexible strategies that can adapt to changing circumstances.

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6 Continuous Review

A continuous review process is essential for maintaining alignment between sales and finance. Revenue projections should not be static; they must be revisited regularly to reflect new information, market changes, or shifts in strategy. This iterative process ensures that both teams stay on the same page and can adjust their expectations and plans as needed. It also reinforces the collaborative nature of revenue forecasting, making it a dynamic part of the company's financial health.

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David Esposito

Sales Manager at De Cecco USA - PMI Inc
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Net Sales Targets are the great equalizer. When you focus on the net everyone wins. You get a Healthy company with everyone rowing in the same direction. The rewards are then shared to bring everyone back to the table

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You're navigating conflicts between sales and finance. How can you align revenue projections effectively?

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1 Understand Roles

2 Data Analysis

3 Set Objectives

4 Communication Channels

5 Scenario Planning

6 Continuous Review

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