Running the operations of a CPG isn’t an easy task. Making profits is challenging when you have to manage production costs and relationships with distributors as well as marketing strategies. What if I told you that the greatest risk to your bottom line isn’t rising costs for materials or a slacker competition or the deductions that slowly diminish the revenue of your business?
Management of deductions might not be the most thrilling element of running a business however for CPG brands, it’s one of the most critical aspects. When a retailer fails to pay an invoice, whether it’s due to promotions, chargebacks or vague violations, you’re losing out on your hard-earned profit. When cash flow is already tight the deductions you make can be all the difference between growth and struggles.
Poor deduction management costs much more than you thought.
Let’s face it: nobody launches a CPG brand with the intention of spending long hours fighting over deductions with distributors. As many business owners soon discover, these deductions can increase quickly.
If you do not use a reliable deduction management strategy, your company is likely to constantly feel like it is losing money. It’s frustrating, time-consuming, and distracts you on what’s most important: growing your brand.
It’s even more complicated because of the lack of transparency. The reasoning behind a lot of deductions aren’t clear and it can be difficult to tell which ones are correct. Certain brands don’t realize how much they’re losing until it’s time to take an in-depth look at their books, and by that point, thousands (or even millions) may have already slipped through the gaps.
What software for deduction management can change the Game
The best part? There is no need to deal with this issue on your own. Deduction management software removes the guesswork out of the process by automatically recording, analyzing, and resolving deductions.
Instead of getting lost in spreadsheets, owners of businesses can quickly see where their money is spent and the reasons why certain deductions are made. Additionally, software solutions let companies challenge incorrect claims more quickly which saves time while recuperating revenue more efficiently.
Automation can also result in less human error and more accurate financial reporting. If you’re a CPG business, that level of clarity is essential. It allows you to invest, scale up, and negotiate with retailers from a position of strength.
Food & Beverage Consultancy: A key to maximizing profits
While software can be a very powerful tool, sometimes it’s helpful to have a professional to help you. That’s where a beverage consultant can help.
Consultants experienced in the food sector can help CPG brands develop better strategies for deduction management, instruct their staff on the most effective practices, and even negotiate more favorable conditions with distributors. They are familiar with the industry inside and out and can provide information that could otherwise take years to learn about.
For businesses that are growing Expert guidance could make all the difference between struggling with endless deduction disputes and transform deduction management into an easy, cost-saving process.
Final Thoughts
Deduction management is not just concerned with recovering money that was lost 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 letting deductions drain your profits Make sure you are in control of the process and transform the issue that was once a source of stress into a chance for smarter business expansion. Your bottom line will be grateful to you.
