Running an effective CPG brand is no easy feat. managing manufacturing costs, distributor relationships marketing and distribution could appear to be losing battle. What if I told that the biggest threat to your bottom-line isn’t rising costs for materials or increased competition however, it’s the deductions that slowly diminish your earnings?

Management of deductions may not be the most thrilling part of running a business however for CPG brands it’s among the most critical aspects. Each time a retailer is short-pays an invoice whether due to chargebacks, promotions, or vague compliance issues it takes away the hard-earned profits. When your cash flow is already strained, these deductions can be the difference between success and failure.

The Actual Cost of Poor Deduction Management

Don’t be fooled that nobody starts an CPG firm expecting to battle with distributors over deductions. But as many business owners realize, these deductions add up fast.

You’ll be left wondering how payments aren’t matching the invoices. You’ll be struggling to challenge unfair charges and feel like you’re losing money. It’s aggravating, time-consuming and, most importantly it takes your focus away from the most important thing to grow your business.

The inability to communicate makes the issue even more difficult. The explanations for many deductions can be unclear and it can be difficult to determine which are right. Some companies don’t realize the amount they’re losing until it’s time to take the time to look over their accounts, and by then some thousands (or even millions) might have already fallen through the gaps.

How software for Deduction management can change the game

The good news? This issue won’t need to be handled manually. Software that handles deductions takes away the guesswork by capturing these deductions, then analyzing and resolving the issues automatically.

Instead of drowning in spreadsheets, owners of businesses can quickly see where their money is allocated and where deductions are taken. Additionally, the latest software solutions allow brands to quickly challenge inaccurate claims while also recovering lost revenue more efficiently.

Automation also means less human errors and greater accuracy in financial reporting. If you are an CPG this type of transparency gives you the confidence to grow and make investments in your business and deal with retailers.

Food & Beverage consultants are essential to the success of your company

Software is an amazing tool but sometimes you need someone who can guide you. A consultant in food and drink can be of assistance.

Consultants experienced in the food sector are able to assist CPG companies to devise smarter strategies for managing deductions, instruct their staff on the most effective practices, and even negotiate more favorable agreements with distributors. They are experts in the field from the inside-out and are able to provide information that could otherwise require years of research to find.

For businesses that are growing professional guidance can make the difference between battling endless deductor disputes or turning the process of deduction management into an efficient, profit-saving procedure.

Final Thoughts

Deduction management is not just to recover money you’ve lost It’s also about 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.

Don’t let deductions drain you of your profits. Instead, take control and turn what used to be a source of stress into a strategy for the greater growth and efficiency of your company. Your bottom line will thank for your efforts.