Being a manager of a CPG isn’t an easy task. managing production costs, distributor relations, and marketing can seem like losing battle. What if we told you that your bottom line wasn’t in danger due to rising costs of materials or tough competition but rather the deductions that slowly erode your revenue.
Deduction management might not be the most thrilling aspect of running a company, but for CPG brands it’s the most crucial. If a retailer is unable to pay an invoice or chargeback, regardless of promotions, chargebacks or ambiguous violations, you’re losing all the profits you’ve made. In a time when your cash flow is already in a tight spot and tight, these deductions could be all the difference between growth and struggle.
Poor deduction management can cost you a lot of dollars
Don’t be fooled that nobody starts a CPG business expecting to fight with distributors over deductions. But, as business owners realize that these deductions add up fast.
Without proper deduction management, you’re left guessing why certain payments don’t match invoices, struggling to dispute unfair chargebacks, and constantly feeling like your business is bleeding money. It’s exhausting, stressful and takes your focus away on the most important thing to build your brand.
This is made more difficult by the lack of transparency. The explanations for many deductions aren’t clear which makes it hard to discern which ones are true. Certain brands don’t realize how much they’re losing until it’s time to take a closer look at their books and by then, thousands (or even millions) could have already passed through the gaps.
Deduction Management Software A Game-Changing Solution
The best part? There is no need to deal with this problem manually. Deduction management software automates the process of keeping track, analyzing and finally, resolving deductions.
Instead of drowning in spreadsheets, businesses are able to see exactly where their money is going, and also why certain deductions were taken. Furthermore, software solutions allow brands to challenge fraudulent claims quicker which saves time while recovering more revenue.
Automation can also lead to less human error and more accurate financial reporting. If you’re the CPG business, this type of clarity is vital. It gives you the confidence to invest, scale up, and negotiate with retailers from an vantage point of strength.
Food & Beverage Consultancy: The Key to Profitability
Although software is an effective tool, sometimes it’s helpful to have a professional on your side. A consultant in food and drinks can be of assistance.
Consultants with knowledge of the food industry can assist CPG companies develop better strategies for managing deductions. They are also able to train their staff and negotiate better conditions with distributors. They are familiar with the industry inside out and can offer insights that would otherwise take years to learn about.
A professional’s guidance for companies that are growing could mean the difference between endless debates over deductions and a procedure that is streamlined and saves money.
Final Thoughts
At the end of the day deduction management isn’t only about recovering lost funds it’s about safeguarding the financial health of your company. Whether it’s through deduction management software or an expert food & beverage consultant, taking charge of your deductions is taking control of your cash flow, your growth and your future.
Don’t let deductions rob you of your profits. Instead, control the process and transform what was once thought to be a headache into a method for more efficient growth of your business. Your bottom line will thank you.