How Marketing and Accounting Play Powerfully as a Team
Within my own career journey, I worked at a high-line auto group based out of the New York Market. Originally when I took the role, the group had an advertising agency responsible for all marketing accounting oversight in conjunction with the CFO and Controller of the company. As time went on, the owner decided to eliminate the agency and have myself and my team handle all the marketing in house, including working directly with accounting on all marketing responsibilities that the prior agency held.
My responsibilities varied day to day as Vice President of Marketing but I worked very closely with the entire accounting department on annual and monthly marketing budgets. Reviewing parts statements, contract negotiations, vendor billing management, marketing accruals, co-op submissions, co-op management, and marketing accounting oversight, I had to sign off on every single marketing, advertising, or 3rd party invoice prior to it getting to the check signer for all locations.
Depending on the dealership, this area is sometimes not well defined or looked upon as a priority. Having a buttoned up and fully transparent marketing strategy, where all the internal teams are in sync, is not always part of the narrative. Especially when making decisions, not all accounting departments are involved with the marketing strategy.
Flash forward to 2021 when I met Kelly Edgar, who I now know as The Virtual Controller. We clicked instantly over synergies we have as we both work within the accounting department of a dealership; we have very similar philosophies and mindsets on the topic of marketing accounting. I sat down to interview The Virtual Controller about best practices and any advice she has to maximize profitability for your store.
M: What is a sustainable marketing accounting process that every dealership across the US needs to have?
VC: For all my dealerships, every month I run an advertising expense report. This is always matched up with the budget and ties to the financial statement, so the partner or the GM can easily see what they agreed to and where the final expense came in at. This is a great tool to use month to month to order to see and understand your expense tracking. This is also good for the GM to compare to their other advertising reports because they have access to reports that we don’t get to see from a traditional accounting standpoint.
An example would be the ability to compare their ad expense on Facebook to the number of impressions generated: this is also helpful in terms of the GM’s ability to monitor and understand whether there are expenses that are able to be cut, those not converting to traffic for the store.
These reports are important to produce, even if they’re not asked for because there will come a time that the GM must make a split decision and they can refer to these reports easily, building trust within your accounting department and controller.
M: Why is reviewing the advertising budget important to do monthly? What are some best practices and tips you can suggest for a new General Manager or Owner?
VC: From an accounting standpoint, their Controller should be in consistent contact with the GM/O/MP concerning any out-of-the-ordinary advertising items. I know, for me, most of the time, I don’t get the budget until the month is almost over. This is just because the GM certainly does not have to get my permission on what his ad spend is, but at the same time, I am responsible and required to let him know when I see something that appears too high or too low. This is also something I feel comes with time as well as knowing your GM. There are a lot of times that I advise my GM on items that appear out of the ordinary and don’t receive a response. Regardless, my GM likes to know that I am watching those things, that is what I am there for. Another reason it is important to watch the budget is because the GM can monitor trends, both good and bad. I always give my GM a report of where the actual expense came in; it is in this way that they can compare the impressions they are getting on Google Analytics vs. what they are spending on such.
M: Why should a dealership have an accounting department (virtual or in-house) manage the marketing accounting vs an agency?
VC: You know, I have worked at dealerships before where we had an in-house marketing professional as well as having worked at a dealership that used an advertising agency. I really do see the benefit of both. In my opinion, the consideration really comes down to who has the most/best relationships. You may be dealing with an advertising agency that has a far reach, for example, having used the same radio station for a long time and can get you the best spots at a discount. And you may find that local professional that also has longtime relationships with different outlets that can provide you the same value. Either way you are paying for their experience, which can be expensive. Ultimately what you want is the exposure for your store. I am a strong believer in allowing your staff to do what it is they thrive in doing. And to me, other than monitoring the expense side, advertising should be left to a pro. It is way too large of a commitment and expense to trust to someone without skin in the game.