Financial management is the practice of dealing with the financial resources of a firm with the objective of effectively accomplishing organizational goals of business success with profitability. Finance is one of the most crucial functions in an organization as it directly deals with the profitability aspect of the organization. Financial management is taken care of by experts most of whom have financial management certification and a degree in one of the various finance courses.
Being a financially successful enterprise is the aim of any organization and therefore, every function in the organization is expected to adhere to financial management norms and practices. Marketing and advertising being one such function in which financial management plays a major role, there are financial managers who dedicatedly work with the marketing teams in their organization. Marketing and advertising deals with the promotion of a product or service or several products and services that an organization sells. The mode and tools of promotion vary according to the purpose of the promotional campaign.
An organization may need to launch marketing and advertising campaigns for creating brand awareness. Sometimes they want to outsmart the competition and emerge and gain top of mind awareness. At other times, organization looks to support the sales teams by generating more sales leads through its campaigns. For different campaigns, an organization can choose to use tools like television ads, print campaigns, radio spots, digital marketing or on ground events, amongst many others. Mostly, it is a combination of several modes of communication to reach different customers effectively. Any marketing function is involved in a lot of back end activities like conducting market research, choosing vendors, printing marketing collaterals and hiring agencies for developing creatives and overseeing on ground events.
Several benefits of Financial Management
A successful marketing and advertising campaign may require a lot of strategic planning, executional brilliance and a significant monetary budget. All aspects of an organization’s marketing efforts need the organization’s investment. A finance manager’s job is to ensure that all marketing investments are beneficial for the company either in the short term or the long term. The returns on marketing investment is an important criterion for approving any marketing campaign and the job of the finance manager is to look into the potential benefit of any marketing activity. Some would say that marketing and finance is a match made in heaven. There are several benefits of financial management in the marketing and advertising domain. Some of them are discussed below –
- Financial Management Provides Funds for the Right Campaign at the Right Time
Financial managers sit at a strategic level with the top management and once a campaign or marketing activity has been duly checked by them, they can present a sound case to the upper management to get it approved. By keeping a check on various marketing spends, a financial manager can save funds on marketing investments that matter.
- Financial Management Helps Keep Marketers on a Budget
Financial manager understands the strategic needs of the organization and accordingly keep tabs on how much spends should marketing be allowed. At any point, whenever the organization needs to understand the validity of any marketing investment, the top management asks the financial managers for their professional view on the matter. Marketing and finance can together come to a consensus on marketing needs and its relevance in meeting the organizational objectives.
It is the responsibility of the marketing team to manage budget effectively. However, as they are more involved with the creativity and the marketing brilliance of the job, the financial aspects are overlooked as the marketers go overboard. This may lead to financial mistake, some of which may be disastrous for the company.
Financial managers can help forecast the marketing spends and plan in advance for various marketing elements. They also help the marketing team in compliance of the best practices in accounting.
- Financial Management Adds Financial Acumen to Creativity
While marketers spend their time and energy on creating and executing effective marketing campaigns, they do not have the resources or the skill to manage the financial aspects of marketing. From budgeting to payments, financial skills are required in the marketing domain at every step. And hence it needs an expert to handle all these elements so that the marketers can focus on the creative part of marketing and advertising.
Financial management enables marketing and advertising function to stay on track, manage the financial aspects of business accurately and avoid any financial blunders that may cost the company. Finance is a partner to marketing and takes care of the analytical side of marketing. With the analytical side of finance teaming up with the creative side of marketing, organization benefits from the synergy created between the two.
This brings up a conclusion that managing finance requires skill and with the stated importance, it becomes quintessential for working professionals to own this skill and contribute to organizations’ profit as well as individual growth. There are many online finance courses/certifications that allows working professional to work while they learn. Enrol now to escalate your financial knowledge & become an indispensable resource.