Operating the operations of a CPG brand is not an easy task. Managing production costs, distributor relations marketing, and distributor relations can appear like losing battle. What do you think if I told you that one of the most significant threats to your bottom line isn’t the rising cost of materials or tough competitors, it’s the hidden deductions reducing your income?
It’s not the hottest aspect of running the CPG brand However, deduction management is one of the most important. When a retailer fails to pay an invoice due to chargebacks, promotions or ambiguous compliance issues, it takes away the profits you’ve earned. If cash flow is already in a tight spot, this deduction could be the difference between a successful and failure.
The real Cost of Poor Deduction Management
We shouldn’t fool ourselves: nobody launches a CPG firm expecting to battle with distributors about deductions. Many business owners will realize, these deductions could be significant.
You’ll wonder why the payments don’t match the invoices. You’ll have to fight unfair charges and feel that you’re losing money. It’s exhausting, stressful and takes away your focus from what matters most growing your business’s reputation.
It’s made all the more difficult by the lack in transparency. The reasons for a variety of deductions can be vague, making it difficult to know which ones are correct. A lot of brands don’t know how much money they’re wasting until they have a look at their financial records. At that point they may have incurred thousands (or millions).
How Deduction Management Software Changes the Game
The good news is that It’s not necessary to tackle this issue manually. Deduction management software streamlines the process of tracking, analyzing, as well as solving, deductions.
Instead of suffocating themselves in spreadsheets, businesses are able to see exactly where their money is going and the reason for which deductions were made. Modern software solutions also allow companies to swiftly challenge false claims, thus saving them time, and also allowing them to recuperate lost revenue.
Automation means less human error, and a higher level of precision in financial reporting. If you’re in charge of a CPG business, that level of clarity is invaluable it provides you with the confidence to invest, scale up, and negotiate with retailers from a position of strength.
Food & Beverage consultants are crucial to the success of your business
While software is a great tool, it’s sometimes helpful to have an expert at your disposal. That’s where a food & beverage consultant comes in.
Food industry experts sector can assist CPG companies to devise smarter methods for managing deductions. They can also teach their teams best practices, and even negotiate better agreements with distributors. They are familiar with the industry inside-out and are able to provide insight that might otherwise take years to learn about.
Professional guidance for businesses that are growing can mean the difference in endless debates about deductions and a procedure that is efficient and helps save money.
Final Thoughts
In the end deduction management doesn’t have to be just about chasing down lost dollars it’s about safeguarding the financial health of your business. Make deductions more manageable regardless of whether you use software or an expert in the food and beverage sector.
Don’t let deductions deprive you of your profits. Instead, get in control and turn what used to be a source of stress into a strategy for the better growth for your business. Your bottom line will be grateful to you.
