It is not easy to run an CPG business. managing production costs, distributor relations, and marketing can appear like a losing fight. What if I told that the greatest threat to your bottom-line isn’t increasing material costs or stiffer competitors, but rather the deductions which are slowly reducing your profits?
Deductions management isn’t the most enjoyable part of running a company however it is essential for CPG brands. Profits are lost every time a retail store isn’t able to pay its invoices. This could be due to promotions, chargebacks or a lack of understanding about compliance. And when the cash flow is already strained, those deductions can make all the difference between growing and struggle.
Insufficient deduction Management Costs – The real cost
There’s no way to be honest No one creates a CPG brand with the intention of spending hours battling over deductions with distributors. These deductions are not tiny, as many business owners quickly realize.
It’s easy to get confused as to what the reason for why your payments don’t match the invoices. You’ll struggle to dispute unjustified charges, and you’ll feel like you’re losing money. It’s time-consuming and frustrating. It also can distract you from your primary objective: building your brand.
What makes it even trickier is the inability to communicate. A lot of deductions are ambiguous or have any explanation, and trying to identify which ones are legit can seem like a never-ending problem. Many brands are unaware of the amount they’re losing, until they examine their books. By then, they may have suffered losses of hundreds of thousands (or million).
The Deductions Management Software that Changes the Game
The best part? There is no need to tackle this problem manually. Deduction management software streamlines the process of analyzing, tracking, as well as solving deductions.
Businesses can now see where their money goes and why certain deductions were taken, without having to sift through spreadsheets. Modern software enables companies to more easily dispute false claims and recover revenue.
Automation also results in fewer human errors and more precise financial reports. If you are an CPG, this kind of clarity gives you confidence to expand your business, make investments and negotiate with retailers.
Food & Beverage consultants are essential to the growth of your company
Although software is a powerful tool in the right hands, it’s always helpful to have an expert on your side. A food and beverage consultant can be of assistance.
Consultants who have experience in the food industry can assist CPG companies set up better deduction strategies. They can also train their employees and negotiate better terms with distributors. They are experts in the ins and outs of this industry and are able to provide valuable insights that could take years otherwise.
The right advice for brands that are growing could mean the difference between endless disputes over deductions and a process that is streamlined and saves money.
Final Thoughts
It’s not just about recovering lost money and ensuring the financial health of your business. Take control of deductions, whether it’s with software or a consultant in the food and beverage industry.
Don’t let deductions eat into your profits. Make a stand and transform a problem that was once a source of frustration into an opportunity to achieve better and more profitable growth of your business. You’ll reap the rewards.
