The job of running a CPG business is no small one. Between managing production costs, distributor relationships, and marketing, keeping profits intact can feel like an uphill fight. What if i told you that the biggest threat your bottom line, isn’t rising materials costs or a fierce competition. It’s the deductions slowly eating away at your revenues?
Deduction management might not be the most exciting aspect of running a business but for CPG brands, it’s one of the most important aspects. When a retailer underpays an account due to chargebacks (or other issues) promotions, or other vague compliance concerns this can impact your profits. When cash flow is already slow, these deductions could make the difference between success and failure.
Low deduction Management Costs: What You Pay?
Let’s face it: nobody creates CPGs CPG to argue over deductions. As many business owners soon realize, these deductions could be significant.
Without proper deduction management You’re left wondering the reason why certain payments don’t correspond to invoices, struggling to dispute unfair chargebacks, and constantly feeling like your business is bleeding cash. It’s a hassle, consumes lots of time, and, most important, it distracts you from the thing you should be focusing on: growing the brand.
This is made more difficult due to the lack transparency. Many deductions are applied with little explanation, and deciphering the ones that are genuine is like figuring out a never-ending problem. Many brands are unaware of the amount they’re losing, until they examine their financial records. At that point they could have suffered losses of hundreds of thousands (or millions).
The Deductions Management Software that changes the Game
The good news is that You don’t have to tackle this issue manually. Deduction management software eliminates the guesswork of the process by tracking, analyzing, and resolving deductions.
Instead of slogging through spreadsheets, companies can view the exact location of their funds being spent and the reason the reasons for deductions. Better yet, software solutions allow brands to challenge incorrect claims more quickly which saves time while recovering revenue more efficiently.
Automation can also result in less human error, and more accurate financial reports. The clarity is essential for a CPG company. It lets you invest, scale and negotiate from a strong position.
Food & Beverage Consultancy: The key to maximizing profits
It’s beneficial to have an expert to help you. While software is a very powerful tool, there are times that it is advisable to consult an professional. This is where food and drink consultants come in.
Consultants who have experience working in the field of food can assist CPG companies set up more efficient deduction strategies. They can also help train their teams and negotiate better terms with distributors. They are well-versed in the industry, and can provide valuable insights that could otherwise take many years to discover.
For companies that are expanding and need expert advice, it can be the distinction between endless disputes regarding deductions and making deduction management a profitable and streamlined procedure.
Final Thoughts
In the end, managing deductions isn’t only about recouping money lost. It’s about ensuring your company’s financial health. By using deduction management software, or by working with a Food and Beverage consultant, you can take control of your cashflow, growth and future.
Do not let deductions drain your earnings. Take the initiative and turn what was once a burden into an opportunity to become smarter. Your bottom line is going to thank you.