Accounts are not the enemy of Sales
Today at Southbourne Accountancy, we are excited to have a guest joining us – John from Fresh Eyes Associates. John specialises in providing Sales and Account Management consultancy. Today he is sharing why the Accounts department and Sales department really should be working closer together and not constantly butting heads. Over to John:
Let’s be clear Accounts depts and FD’s are not the enemy of the sales team.
Let’s also be honest and say that many a salesperson (me included) has at one time or other complained about how accounts are the anti-sales department putting hurdles in the way of closing an opportunity.
Now let’s be frank, the main reason that accounts are perceived as the baddies is that the sales department is lacking in a structured sales process.
Yes, accounts are going to do a credit check, yes accounts are going to check pricing, yes accounts are going to review contracts and payment terms and yes accounts are going to chase for payment.
All the above should come as no surprise but in so many businesses these matters are overlooked or left to the last minute and almost considered as a given. I mean hey sales has got the green light from the customer and that is all that matters.
The minute, sales has a live opportunity, there should be a credit check on the prospect. why waste time and energy on a deal if the prospect has little chance of paying or is known as a poor payer. It might not be a deal breaker but sales must construct the deal to reflect the risk and convey this to the prospect as early as possible.
A well-run business will always know the cost associated with supplying their product or service. Furthermore, such businesses will be aware of the market pricing structure and the margins required to cover all cost and make an acceptable return. What is the point of a sales team chasing volume or turnover targets if they are losing money for the firm and ultimately leading to its demise.
In a consultative selling environment it is then for sales to identify the needs and pains of the prospect/client and to sell the value of the service/product that is reflected in the selling price. Price cutting to win a sale, is neither professional nor sustainable in the long run and something that is strictly governed in a business with a structured sales process. As such accounts and sales should be working together to ensure pricing is competitive, covers cost and provides an acceptable level of profit.
Payment terms can also be a contentious point between sales and finance in an unstructured sales process. We have already covered the need of a credit check but this also lays the foundation for how the business interact with the prospect moving forward. Payment terms can be varied across verticals and indeed between businesses within that vertical. However, all well organised and structured businesses will have payment terms be they cash with initial order, 14 days or 28 days credit terms etc.
The important thing to note is that whatever your company terms are these must be conveyed to the prospect at the earliest relevant opportunity and always no later than when you are discussing pricing. In too many businesses sales people have had to have very awkward discussions with prospects to clarify terms once a proposal has been submitted, this leads to mistrust between the prospect and the salesperson and in some cases the potential loss of the sale.
Chasing payment is also one of those areas that can lead to conflict between sales, account managers and the accounts department. Sales are trying to close another deal with a client, or an account manager is trying to onboard a new client and they hear that accounts has been chasing an outstanding invoice(s). Again, this often highlights issues with the sales and account management process at a business.
If this is a new customer and the supplier is struggling to receive payment then it normally suggests that due diligence was not undertaken in the presales (e.g. credit check). However, if this is an existing customer and they are not paying then it would suggest that there is a possible breakdown in communication which would suggest that there is not a defined account management strategy in place by the seller.
Obviously, sales and account managers cannot be held responsible for a client being unable to make a payment. But good account management means that you keep in regular communication with your clients and by that I do not mean just a perfunctory email detailing new events or products but taking the time to speak to people within the business and nurture relationships.
Not only is this a great way to increase spend from a client but by building a relationship and getting a sound understanding of the business you can become aware of changes to the commercials within that firm (both good and bad). In this instance rather than accounts chasing payments the first reminder could/should, be undertaken by the sales or account management team who are known and trusted by the client.
Equally, if there is a problem with payment, if the client has a good working relationship with the account manager then they are more likely to highlight the issue earlier and then it is easier for accounts to work with the client to come to some mutually beneficial arrangement. For the supplier having such policies in place usually generates more customer loyalty which results in less customer churn and higher spend throughout the lifetime of the client.
I hasten to say that this is not a complete list of interactions that occur between accounts and sales. For instance, I have not talked about sourcing new suppliers, issues with invoices and interactions over commissions to name but a few.
However, what I hope this highlights is that it is vital for any sales department to have an appreciation of the importance that accounts have in the smooth running of the sales process. Likewise, it should also be very evident how important it is that every business has a structured sales process in place which highlights when there must be interaction or consideration of the requirements of the account department.
Want to learn more:
If you would like to learn more about developing a structured sales process then please feel free to call Fresh Eyes Associates on 07971 052857 or email firstname.lastname@example.org or check out our website at www.fresheyesassociates.co.uk
Fresh Eyes Associates specialise in providing Sales and Account Management consultancy for companies in the IT sector and for any business that undertakes or could benefit from, a consultative sales approach.