It is not easy to run a CPG business. Between managing production costs, distributor relationships, and marketing efforts, keeping profits intact can feel like an uphill fight. What do you think if you learned that one of your most significant threats isn’t the increasing cost of materials or fierce competition, but the hidden deductions that reduce your revenue.
Deduction management may not be the most exciting aspect of managing a company but for CPG brands, it’s one of the most important aspects. If a retailer fails to pay a invoice in full, due to a chargeback, unclear compliance issues or promotions, your profits will be slashed. This is especially true when cash flow is already in a tight spot, could be the difference between growth or failure.
Poor Deduction Management: The Real Cost
Let’s be honest: no one begins an CPG company expecting to spend hours fighting over deductions with their distributors. These deductions are not tiny, as many business owners quickly discover.
It’s frustrating to be constantly losing money and have to guess why some payments aren’t matched with invoices. It’s tedious and time-consuming. Worse, it distracts you from your main objective creating your image.
The lack of transparency can be more problematic. There are a lot of deductions that are not clarified, and it may be difficult for you to figure out the ones that are actually. Some companies don’t know how much money they’re losing until they look an in-depth look at their books and by then, thousands (or even millions) may have already slipped through the gaps.
How Deduction Management Software Can Change the Game
The good news is that You don’t need to deal with this issue by hand. Deduction management software streamlines the process of tracking, analyzing, as well as resolving, deductions.
Companies can now track the source of their funds and the reason why certain deductions were made without the need to sort through spreadsheets. Software solutions allow brands to challenge inaccurate claims faster, saving valuable time and recovering revenue more efficiently.
Automation can also mean fewer human errors and more accuracy when it comes to financial reporting. This kind of clarity, when you’re managing a CPG firm, is invaluable. It helps you feel confident when scaling, investing, and negotiating with retailers.
The role of Food & Beverage Consultants in keeping your business profitable
It is beneficial to have an expert to help you. While software is an extremely effective instrument, there are times that it is advisable to consult an expert. That’s where a food & beverage consultant comes in.
Consultants with expertise in the food industry can help CPG firms develop more efficient deduction strategies. They can also help train their teams and negotiate better terms with distributors. These consultants know the ins and the outs of this business and can offer valuable insight that would require years of research.
For growing brands, having expert guidance can be the difference between battling endless deduction disputes and turning the management of deductions into a an efficient, profitable procedure.
Last Thoughts
Deduction management doesn’t just mean the pursuit of lost money, it’s also about protecting your company’s financial health. Deduction management software is a great method to control your deductions. Working with a food and beverage consultant can also be incredibly helpful.
Instead of letting deductions drain profits, get in charge and turn what was to be a hassle into an opportunity for smarter growth. You’ll reap the rewards.