Running a CPG isn’t an easy task. Between managing the cost of production, distributor relationships, and marketing efforts, keeping profits intact is a difficult battle. What if I told you that your bottom line was not at risk from rising costs for materials or even a fierce competition? Actually, it’s the deductions that gradually reduce your revenue.
For CPG brands, deduct management might not be one of their most exciting aspects of their business. However, it is vital. If a retailer fails to pay its invoice in full, whether due to chargebacks, unclear regulations or promotions, profits will be slashed. These deductions are particularly important in times when cash flow has been tight.
Low Deduction Management Costs: What Do You Pay?
Let’s face it: No one launches a CPG product with the intention of spending countless hours battling with distributors over deductions. But as many business owners quickly realize that these deductions add up fast.
It’s frustrating to constantly losing money and have to figure out why certain payments don’t match up with invoices. It’s frustrating and taking up a lot of time and distracts your attention from what is important most: growing your company.
Lack of transparency is even more troubling. It can be difficult to determine which deductions are valid, as many are made without explanation. Some brands don’t even realize how much they’re losing until they take a closer review of their financial records and, by that time, thousands (or even millions) may have already slipped through the gaps.
What Deduction Management Software Can Change the Game
The best part? The good news is that you don’t have take on this task manually. The software tracks, analyzes, and resolves deductions in a way that is automatic.
Companies no longer need to spend hours on spreadsheets, and they can understand how their funds are spent. They also can be aware of the reasons the reasons behind deductions. The latest software allows brands to easily challenge inaccurate claims and recover lost revenue.
Automation also means less human error and greater precision in financial reporting. This kind of clarity is crucial when you are running a CPG business. It gives you the confidence to grow, invest and make deals with retailers.
Food & Beverage Consulting: The key to profitability
Software is an excellent tool but sometimes you need an expert to guide you. This is where food and drinks consultants can help.
Consultants who have experience in the food industry are able to assist CPG companies set up more efficient deduction strategies. They can also help train their employees and negotiate better terms with distributors. They understand the ins and outs of the business and provide insights that might otherwise take a long time to figure out.
The right advice for brands that are growing can make the difference between endless disputes regarding deductions, and a procedure that is efficient and helps save money.
Last Thoughts
In the end deduction management isn’t only about chasing down lost dollars it’s about ensuring your financial health of your business. Whether it’s through deduction management software or working with a professional food & beverage consultant, taking control of your deductions is taking control of your cash flow, your growth and even your future.
Don’t let deductions rob your earnings. Take the initiative and turn what was once an inconvenience into an opportunity to grow smarter. You’ll reap the rewards.
