Running a CPG brand isn’t an easy task. Profits can be a difficult task when you have to manage production costs as well as relationships with distributors and marketing campaigns. What if I informed you that the greatest risk to your bottom line isn’t rising costs for materials or stiffer competition or the deductions that slowly diminish your revenue?
It’s not the most exciting aspect of running an CPG brand however, it is among the most important. If a retailer fails to pay an account because of chargebacks (or other reasons) or promotions, or if there are any vague questions about compliance, it will affect your profits. When your cash flow is already in a tight spot and tight, these deductions could be all the difference between growing and struggle.
The Actual Cost of Poor Deduction Management
Let’s face it: no one launches a CPG brand hoping to spend hours battling over deductions with distributors. But, as entrepreneurs quickly discover that deductions are accumulating fast.
You’ll wonder how payments aren’t matching the invoices. You’ll have to fight unfair charges and feel like you’re losing money. It’s frustrating, tiring, and worst of all it diverts your attention from the most important thing building your business’s reputation.
This is made more difficult by the lack in transparency. Many deductions are applied with no explanation. Trying to figure out which ones are valid is like figuring out the ultimate puzzle. Many companies don’t know the amount they’re losing until they take the time to look over their books, and by that point the thousands (or even millions) could have already passed through the cracks.
Deduction Management Software A Game-Changing Solution
What’s good news? There is no need to address this issue manually. Software that handles deductions takes away the guesswork by capturing these deductions, then analyzing and resolving them automatically.
Businesses are now able to see where their money goes and how deductions have been made without the need to search through spreadsheets. Furthermore, software solutions allow brands to challenge inaccurate claims faster, saving valuable time and recuperating revenue more efficiently.
Automation can also mean less human error and more accurate financial reporting. If you are a CPG the kind of clarity gives you confidence to expand, invest in your business and negotiate with retailers.
Food & Beverage consultants are vital to the success of your business
Even though software can be an extremely powerful tool in right hands, it’s useful to have an expert to assist you. That’s where a food & beverage consultant comes in.
Consultants with experience in the field of food industry consultation can help CPG brands develop smarter deduction management strategies, train teams on best practices, and negotiate more favorable deals with distributors. They understand the specifics of the field and offer insights that would otherwise require years of research to determine.
For businesses that are growing with a strong team, expert advice can be the difference between having to deal with endless deduction disputes and making deduction management an efficient, profitable process.
Final Thoughts
Deduction management isn’t just about recouping money lost but also ensuring the financial health of your business. The ability to control your deductions is the most important factor in controlling your cash flow and the potential for future.
Take control of the situation and transform the issue that was once a source of frustration into a chance to help your business grow smarter. Your bottom line will be grateful.
