It’s not easy to manage a CPG company. The management of the costs of production, distribution, and marketing can seem like an unwinnable battle. What if I informed you that the biggest risk to your bottom line isn’t a rise in costs of materials or increased competition however, it’s the deductions that are slowly reducing your revenue?
Deduction management may not be the most thrilling element of running a business however for CPG brands it’s among the most critical aspects. If a retailer is unable to pay its account because of chargebacks (or other reasons) promotions, or other vague compliance issues, it could take a bite out of your profits. When your cash flow is already strained, this deduction could make the difference between success or failure.
Incorrect deduction management could result in a significant loss of dollars
Let’s face it: nobody creates an CPG to argue over deductions. These deductions aren’t small and many business owners quickly find out.
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 a hassle, it’s time-consuming and worst of all it distracts your attention from what really matters building your business’s reputation.
What makes it even more complicated is the absence of transparency. It’s difficult to know which deductions are valid and which ones are made without explanation. Certain brands don’t realize how much they’re losing until they look a closer look at their financial records. By then many thousands (or even millions) may have already slipped through the cracks.
How Software for Deduction Management Changes the Game
What’s positive thing? This problem doesn’t need to be handled manually. Software that manages deductions takes away the guesswork, by tracking their progress, analysing and resolving them in a timely manner.
Instead of suffocating themselves in spreadsheets, businesses can understand exactly where their cash is going and the reason for which deductions were made. Even better, modern software solutions allow brands to quickly challenge inaccurate claims, saving time and recovering lost revenue faster.
Automation is a way to reduce human error and more precision when it comes to financial reporting. This kind of clarity can be invaluable in the management of the operations of a CPG business. It provides you with the confidence needed to grow, invest and work with retail partners.
Food & Beverage consultants are important to the success your business
Even though software can be a powerful tool in the right hands, it’s important to have a professional with you. This is where a food or beverage expert can help.
Experts who have experience in food industry consultation can help CPG companies develop better deduction management strategies, instruct teams on best practices, and even negotiate better deals with distributors. They know the industry inside-out and can offer ideas that otherwise would require years of research to find.
For companies that are growing with a strong team, expert advice can be the difference between having to deal with endless disputes over deductions and transform deduction management into a streamlined, profit-saving process.
Final Thoughts
It’s not only about finding lost money, but also protecting the financial health of your business. Controlling your deductions is the crucial factor to regulating your cash flow and future.
Take control of the situation and turn the issue that was once a source of frustration into a chance for your business to grow smarter. Your bottom line will be grateful to you.