Aligning Finance and Marketing: Peter Mahoney of Planful on the Being Planful Podcast

Aligning Finance and Marketing: Peter Mahoney of Planful on the Being Planful Podcast

Peter Mahoney, Founder and CEO of Plannuh, joined me on the Being Planful podcast to dive into the often fraught relationship between Marketing and Finance. We discussed the causes of friction and ways to get these two critical teams aligned. Peter’s background is actually in marketing, where he began his career as a marketing rep for IBM. He then steadily rose through the ranks to lead marketing at several companies, including Nuance Communications, a $2 billion software company. Along the way, he realized the frustration of building marketing budgets and tracking expenses in disconnected spreadsheets, so he started Plannuh to solve that problem. 

In this episode (watch or listen here), Peter and I explored the fundamental differences between Marketing and Finance, how a chart of accounts mindset differs from a campaign mindset, and tips for getting these two teams to work together. 

Here are just a few highlights of this episode.

To What End?

Peter spent much of his career as CMO and running entire businesses. That’s given him a good perspective on both sides of the marketing-finance equation, and it’s what spurred him to start Plannuh. The company helps marketers easily create and manage plans, budgets, and expenses, which then helps marketing goals mesh with broader business goals. But achieving alignment, or even just overcoming the friction between these two teams, has to start with communication. 

“Marketing uses crazy words that finance people don’t understand, and the same goes in the other direction,” Peter explained. “They’re often speaking past each other. Marketing organizes things in broad themes and campaigns. Finance manages based on a chart of accounts. But Marketing doesn’t care if they’re spending $100,000 on media or $100,000 on a sponsorship. I think that’s one of the fundamental issues.”

In his experience, Peter has found that, when Finance presses Marketing to ask, “To what end?” to explain their decisions, it sparks conversations about the real business impact of their actions.

“If Marketing says, ‘I’m doing this visibility campaign,’ well, to what end?,” Peter said, as he replayed a fictional conversation. “I don’t know, to get visibility? No, there has to be a business purpose of that. To what end? I wanna get more people to come to my website. To what end? I want them to buy something. Aha, okay, we’re starting to get there.”

The intent, said Peter, is to have Marketing think through how their plans contribute to the ultimate financial goal. Does everything along the way connect to the financial or strategic goals of the company? When Marketing starts to view their actions and macro campaigns from that perspective, it’s articulated closer to the language of finance. That leads to better alignment and starts to chip away at the friction.

Embed Finance in Marketing

Speaking the same language is just the beginning, however, according to Peter. Just talking about each others’ view of time can cause misunderstandings. Accrual of expenses, for example, is something many marketers don’t understand, but which is crucial to FP&A processes.

“If you prepay for a trade show, but the trade show is three months from now, that’s when it’ll actually hit that financial period,” said Peter. “It’s one of the things that causes a lot of friction, because marketing people will say, ‘This is the money I think I spent.’ And Finance will say, ‘No, the reports don’t match up the same way.’”

Those fundamental rules of accounting aren’t understood or even followed by Marketing, which creates even more miscommunication. But Marketing should be engaging with Finance to understand these financial metrics and methods, especially around outcomes.

“The most important connection between finance and marketing people, it really starts with your goals,” Peter continued. “What’s important for the company? What can we do to help deliver on that company objective? Get alignment around that and the activities you’re doing to move the business forward to achieve those goals.”

One tip Peter recommended was embedding a finance person as part of the core CMO staff. He used it at previous companies as an investment in aligning the two teams. That person demystified the financial side of the business, provided insight into long-term strategic planning and corporate financial goals, and helped Marketing efficiently support those goals. And, they became a great advocate for Marketing back in Finance, explaining decisions from a Marketing perspective.

“You have to come together and just explain what you’re doing, and explain the logic,” Peter concluded. “We got an appreciation for what the finance professionals were trying to do from a long-term strategic planning perspective, what was important to them, what were the financial goals that we could support. That kind of two-way relationship, embedding in each other’s teams, was really important to drive better communication and relationships between Marketing and Finance.”

Subscribe to Being Planful

To hear more tips from Peter on building alignment between Marketing and Finance, listen to episode #12 of Being Planful

This podcast series explores the benefits of adopting a “Planful” mindset by inviting your FP&A peers, analysts, industry experts, and more, to share their experiences and insights. Podcasting also lets us stay socially distant while giving you a more flexible way to learn about Continuous Planning, whether it’s watching it on your phone, listening during your morning run, or tuning in whenever it’s convenient.

If you’d like to subscribe, click on your podcast platform of choice (Apple Podcasts, Google Podcasts, Stitcher, or Spotify), or just search for “Planful” wherever you listen. I’ll be releasing new episodes often, so be sure to subscribe. And, if you have any comments, questions, or think you’d make a great guest, send me an email at beingplanful@planful.com

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