Being running a CPG brand isn’t an easy job. Maintaining profits can be an arduous task when you have to manage production costs, relationships with distributors, as well as marketing strategies. What if I told that the greatest danger to your bottom line isn’t increasing material costs or increased competition and the hefty deductions that slowly diminish your earnings?
It’s not the hottest aspect of managing the CPG brand However, deduction management is among the most important. Each time a retailer fails to pay an invoice for any reason, whether due to promotions, chargebacks or vague compliance issues, you lose your hard-earned revenue. These deductions are crucial when cash flow has already been strained.
A poor deduction strategy can cost you a lot of money
Let’s face it: nobody initiates an CPG to fight over deductions. As many business owners soon discover, these deductions can be significant.
Without proper deduction management it’s difficult to figure out which payments aren’t matching invoices, battling to contest unjustified chargebacks, and feeling like your business is running out of cash. It’s time-consuming, frustrating and diverts your attention on what’s most important to build your business’s reputation.
What makes it even trickier is the lack of transparency. The reasons for a variety of deductions may be ambiguous which makes it hard to tell which ones are true. Many brands are unaware of how much they’re losing until they take a closer look at their financial records. In the end, they may have lost thousands (or million).
How software for Deduction management can change the game
What’s positive thing? You don’t need to deal with this issue manually. Software that can handle deductions take away the guesswork, by tracking their progress, analysing and resolving the issues automatically.
Businesses can now see where their money is going and what deductions have been taken, without the need to search through spreadsheets. Furthermore, modern software tools allow companies to contest incorrect claims quicker, saving time and recovering the revenue lost more effectively.
Automation can also mean lesser human errors and better financial reporting. If you’re the CPG business, that kind of clarity is essential. It gives you the confidence to invest, scale up, and bargain with retailers from a position of strength.
Food & Beverage consultants are essential to the success of your company
While software is a powerful tool, sometimes it helps to have an expert to help you. A consultant in food and drink can assist.
Consultants with prior experience in the field of food can help CPG businesses develop more efficient deduction management strategies. They are also able to train their teams and negotiate better terms with distributors. They know the industry inside out and can offer insight that might otherwise take years to learn about.
A professional’s guidance for companies that are growing can make the difference between endless debates over deductions and a system that is streamlined and saves money.
Final Thoughts
It’s not only about finding lost dollars and ensuring the financial health of your business. Whether it’s through deduction management software or working with a food & beverage consultant, taking control of your deductions means taking control of your cash flow, your growth, and your future.
Instead of delaying deductions that drain your profits Instead, you should take control of the process and turn the issue that was once a source of stress into an opportunity for business growth. Your bottom line will be grateful to you.