Being a manager of the operations of a CPG isn’t an easy job. It can be challenging when you’re trying to control production costs and the relationships with distributors and marketing campaigns. What if we told you that your bottom line was not at risk from rising costs of raw materials or a fierce competition, but rather by the deductions that gradually reduce your earnings.
The management of deductions isn’t the most exciting part of running a company, but it’s crucial to CPG brands. Each time a retailer fails to pay a debt, whether it’s due to promotions, chargebacks or ambiguous compliance issues, you’ll lose your hard-earned revenue. These deductions are particularly important when cash flow has already been in a tight spot.
Deficit management that is not properly managed can cost far more than you think
There’s no way to be honest: nobody launches a CPG brand expecting to spend endless hours fighting over deductions distributors. As many business owners soon discover, these deductions can add up quickly.
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 frustrating, tiring, and worse of all, it distracts your attention from what really matters building your brand.
The absence of transparency makes the issue even more difficult. It can be difficult to know which deductions are valid and which ones are based on no explanation. Some brands don’t even realize how much they’re losing until they look more time looking over their financial records. By then many thousands (or even millions) may have already slipped through the gaps.
Deduction Management Software A Game-Changing Solution
The best part? You don’t have to tackle the issue by hand. Software for deductions can take out the guesswork by tracking their progress, analysing and resolving the issues in a timely manner.
Businesses can now understand where their money goes and why certain deductions have been made, without having to sift through spreadsheets. Furthermore, software solutions let companies challenge fraudulent claims quicker, saving valuable time and recouping revenue faster.
Automation also results in fewer human errors, and more precision in financial reporting. If you’re an CPG, this kind of clarity will give you the confidence to grow and make investments in your business and deal with retailers.
Food & Beverage Consultancy: A Key to Profitability
Although software is an effective tool, there are times when it is helpful to have an expert in your corner. This is the point where a beverage and food expert can help.
Consultants with experience in the field of food industry can assist CPG brands set up smarter deduction management strategies. They can also train teams on the most effective practices, and even negotiate better terms with distributors. They understand the details of the business and offer insight that might require years of research to determine.
If you have a brand that is growing Expert guidance can be the difference between having to fight endless deduction disputes or turning deduction management into a productive and profitable process.
Final Thoughts
Deduction management doesn’t only concern to recover money you’ve lost It’s also about ensuring your company’s financial health. Making sure you control your deductions is key to controlling your cash flow and ensuring that you have a plan for the future.
Instead of delaying deductions that drain your profits, take charge of the process, and turn what was once a hassle into an opportunity for business expansion. Your bottom line will appreciate it.