It’s not easy to manage it as a CPG company. Maintaining profits can be an arduous task as you must manage production costs and relationships with distributors as well as marketing strategies. But what would you say if I said that one of the biggest threats for your business’ bottom line isn’t rising cost of materials or a fierce competitors, it’s the hidden deductions taking away your earnings?
Deduction management may not be the most thrilling aspect of running a company, but for CPG brands this is among the most critical aspects. If a retailer is unable to pay its account because of chargebacks (or other issues) or promotions, or if there are any vague questions about compliance, it will eat into your profits. When your cash flow is already strained, these deductions can be the difference between success or failure.
Poor deduction management can cause you to lose a lot of money
There’s no way anyone is launching CPGs CPG to argue over deductions. The deductions involved are not small, as many businessmen quickly find out.
You’ll wonder why payments do not match the invoices. You’ll struggle to dispute unfair charges, and feel like you’re losing money. It’s frustrating, tiring and, most importantly it takes your focus from the most important thing to grow your business.
What makes it even more complicated is the lack of transparency. A lot of deductions are made with little explanation. Trying to figure out which ones are valid can feel like solving an unending problem. Certain brands don’t realize how much they’re losing until they take more time looking over their accounts, and by then the thousands (or even millions) may have already slipped through the cracks.
How software for Deduction management can change the game
The best part? This issue won’t need to be dealt with manually. Software that handles deductions takes away the guesswork, by tracking, analyzing and resolving the issues in a timely manner.
Instead of adrift in spreadsheets, businesses can be able to see where their money is going and what deductions were taken. Furthermore, modern software allows companies to quickly challenge inaccurate claims which saves time as well as recovering revenues lost faster.
Automation means less errors by humans and better precision in financial reporting. If you’re an CPG business, that level of clarity is essential. It gives you the confidence to invest, scale up, and bargain with retailers from the position of strength.
Food & Beverage consultants are important to the success your business
While software is a great tool, sometimes it’s helpful to have a professional on your side. That’s where a food & beverage consultant comes in.
Consultants experienced in the food sector are able to assist CPG brands in developing smarter strategies for managing deductions, instruct their staff on the most effective practices and even negotiate more favorable conditions with distributors. They are knowledgeable about the intricacies of the food industry and offer useful insights.
Expert guidance for growing brands can mean the difference between endless disputes over deductions and a procedure that is efficient and helps save money.
Final Thoughts
It’s not just about finding lost money as well as ensuring the financial health of your business. It doesn’t matter if it’s via deduction management software or working with a food & beverage expert, taking control of your deductions requires taking control of your cash flow, your growth and even your future.
Get control of the situation and transform what was once a hassle into a chance for your company to become smarter. Your bottom-line will thank you.
