The running of an effective CPG brand is not an easy feat. It can be an arduous task when you’re managing production costs and relationships with distributors and marketing campaigns. What if I said that the biggest threat to your bottom-line isn’t increasing material costs or increased competition and the hefty deductions that are slowly but surely reducing your profits?
Management of deductions may not be the most exciting element of running a business however for CPG brands it’s among the most important aspects. If a retailer doesn’t pay their account because of chargebacks (or other reasons) promotions, or other vague compliance issues, it could eat into your profits. When the cash flow is already strained and tight, these deductions could be all the difference between growing and struggles.
Poor deduction management can cost you a lot of money
Let’s be real: no one launches a CPG brand hoping to spend endless hours fighting over deductions distributors. These deductions are not small that business owners realize.
If you don’t have a proper system for managing deductions and deduction management, you’re left wondering why certain payments don’t match invoices, struggling to dispute unjust chargebacks, and feeling like your business is running out of cash. It’s a hassle, it’s time-consuming and worse of all, it distracts you of what’s important to build your business’s reputation.
What makes it even more challenging is the inability to communicate. There are many deductions that are made without explanation, and deciphering which ones are legitimate could feel like solving the ultimate problem. Many companies don’t know the amount they’re losing until it’s time to take the time to look over their books, and by that point some thousands (or even millions) could have already passed through the cracks.
Deduction Management Software: A Game-Changing Solution
The good news? There is no need to deal with this issue manually. Software that manages deductions takes away the guesswork by capturing these deductions, then analyzing and resolving the issues automatically.
Instead of suffocating themselves in spreadsheets, businesses are able to see exactly where their money is going and why certain deductions were taken. In addition, modern software allows companies to quickly challenge inaccurate claims to save time and recover the revenue lost more effectively.
Automation also results in fewer human errors, and more precision in financial reporting. If you’re in charge of the CPG business, that level of clarity is invaluable it provides you with the confidence to grow, invest and negotiate with retailers from an advantage.
Food & Beverage consultants are essential to the success of your company
Even though software can be an extremely powerful tool in proper hands, it’s helpful to have a professional to assist you. That’s where a food & beverage consultant comes in.
Experienced consultants in the food industry can help CPG brands develop better strategies to manage deductions, teach their teams best practices and even negotiate more favorable terms with distributors. They know the ins and outs of the industry and can give insights that could take years to figure out.
If you have a brand that is growing professional guidance can make the difference between battling unending tax disputes or turning deduction management into an effective and profitable process.
Final Thoughts
In the end Deduction management isn’t just about recovering lost funds it’s about safeguarding the financial health of your company. Whether it’s through deduction management software or working with a food and beverage consultant, taking control of your deductions means managing the flow of cash, your expansion, and even your future.
Get control of the situation and transform what was once a burden into a chance for your business to grow more efficient. Your bottom line will thank you.