Being a manager of a CPG is not an easy undertaking. Maintaining profits can be an overwhelming task as you must manage production costs as well as relationships with distributors as well as marketing strategies. What if I said that the biggest risk to your bottom line isn’t increasing material costs or stiffer competition or the deductions that slowly diminish your earnings?
The administration of deductions isn’t the most exciting part of running a company but it’s vital for CPG brands. If a retailer doesn’t pay an invoice due to chargebacks, promotions or even a vague issue with compliance, it can eat away at your hard-earned profits. If cash flow is already in a tight spot, these charges could be the difference between a successful and failure.
Deficit management that is not properly managed can cost far more than you think
Let’s face it: nobody launches a CPG to argue over deductions. These deductions aren’t minuscule that business owners find out.
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 tiring, time-consuming and, worse of all it takes your focus to what’s most important to grow your business.
It’s made even more difficult due to the lack of transparency. Many deductions are made with no explanation. Trying to figure out what ones are true could feel like solving an endless problem. Some companies may not realize the amount they are losing until they go through their books. At that point the thousands or even millions could be gone.
Deduction Management Software: A Game-Changing Solution
The good news? This issue won’t need to be dealt with manually. Software that manages deductions takes out the guesswork of tracking, analyzing and resolving the issues in a timely manner.
Businesses are now able to see where their money is going and the reason why certain deductions have been taken, without having to dig through spreadsheets. In addition, modern software solutions allow brands to dispute incorrect claims faster which saves time as well as recovering lost revenue faster.
Automation also leads to lower human errors and better financial reporting. This kind of clarity can be incredibly valuable when running the operations of a CPG business. It provides you with the confidence to invest, grow and even negotiate with retailers.
The Role of Food & Beverage Consultants in keeping your business profitable
Software is a great tool, but there are times when you require someone to guide you. This is the place where a food and drink expert can help.
Consultants with knowledge of the food industry can help CPG firms develop better deduction management strategies. They can also train their staff and negotiate better terms with distributors. They know the business inside and out and can provide insights that would otherwise take years to uncover.
For brands that are growing Expert guidance can be the difference between battling endless deductor disputes or turning the process of deduction management into an efficient and profitable process.
Final Thoughts
Deduction management is not just about recovering lost money but also ensuring the financial health of your business. Whether it’s through deduction management software or an expert food and beverage consultant, taking control of your deductions requires taking control of your cash flow, your growth, and your future.
Don’t let deductions take away of your profits. Instead, take control and transform what was once thought to be a problem into a method for smarter growth of your business. Your bottom line will be grateful.
