You don’t have to be a savvy financial analyst to be an effective marketer. But it does help to have some working familiarity with what finance people look at, especially if these things refer to or affect your marketing project. Among these items, the concept of cash flows is one of the most important things to know something about, particularly when making decisions on marketing mix for B2B lead generation and appointment setting. While you may have a general idea of what cash flows are, here are some tips to help you get a more solid footing when dealing with them.
- Categorize cash flows properly – Cash flows need to be segregated and classified according to their relevance and applicability to your project. Only those cash inflows and outflows directly resulting from your marketing project should be considered in your computations. This means that only the incremental costs and revenues associated with your B2B lead generation project are analyzed. Also, you need to make sure that each cash flow matches the time period which it takes place in.
- Consider the effect of taxes – Analysts tend to study after-tax cash flows more than any other. Normally, this is computed by adding back applicable non-cash expenses like depreciation to the net operating profit (or loss) from your project then subtracting the appropriate taxes (according to your marginal tax rate). In telemarketing and related activities, depreciation depends on whether you’ve purchased equipment or other fixed assets to be used in your project.
- Use a spreadsheet – For superior analysis and results, it’s advisable to perform your project’s cash flow calculations on a spreadsheet. Microsoft Excel is an excellent spreadsheet application for cash flow analysis because of its many finance-related functionalities. The key point is to make sure that the descriptive and quantitative aspects of you analysis are interpreted and reported in an understandable way, especially if your B2B lead generation project has multiple cash flow streams.
While it may not matter to you at first as a marketer, the concept of cash flows is an essential tool that anyone in business, regardless of specialization, should have an idea about. Doing so will not only help you out in terms of running your projects smoothly but will also help you become a better decision maker.