It’s not easy to run an CPG company. Between managing production costs as well as distributor relationships and marketing efforts, keeping profits intact can feel like an uphill battle. What if you were told that one of the biggest threats isn’t the rising costs of materials or the fierce competition, but the deductions that quietly decrease your income.
Deduction management isn’t exactly the most thrilling part of managing a business but it is essential for CPG businesses. If a retailer does not pay its invoice in full, whether due to a chargeback, unclear regulations or promotions, your profits will be slashed. This is especially true when cash flow is already in a tight spot, could be the difference between success or failure.
Poor Deduction Management: The Real Cost
Let’s get real There is no one who launches a CPG product expecting to spend endless hours fighting with distributors over deductions. But, a lot of business owners are shocked to learn that these deductions could quickly add up.
Without proper deduction management, you’re left guessing why certain payments don’t match invoices, battling to contest unjustified chargebacks, and feeling as though your company is bleeding cash. It’s a hassle, consumes lots of time, and most importantly, distracts from the thing you should be focusing on: growing the reputation of your brand.
What makes it even trickier is the lack of transparency. There are many deductions that aren’t explained, and it can be difficult for you to determine which ones really are. Certain brands don’t realize the loss they are making until they have an examination of their accounts.
The Deductions Management Software that Changes the Game
The good news? You don’t have to tackle this problem manually. Deduction management programs automate the process, tracking the deductions, analyzing and resolving them. deductions.
Rather than drowning in spreadsheets or calculating deductions by hand, businesses can monitor where their money is being spent and why. The latest software allows brands to easily challenge false claims and recover revenue.
Automation means lower human errors and more precision when it comes to financial reporting. The clarity is essential to a CPG business. It allows you to invest, scale and negotiate from a strong position.
The role of Food & Beverage Consultants in Keeping Your Business Profitable
While software is a powerful tool, sometimes it helps to have an expert in your corner. A food and beverage consultant can help.
Consultants with experience in the food industry can help CPG companies set up more efficient deduction strategies. They can also train their employees and negotiate better terms with distributors. They know the ins-and-outs of the industry that involves food and can offer insights that would otherwise take a long time to uncover.
For growing brands having a professional guideline can be the difference between battling endless disputes over deductions and turning deduction management into an efficient, profitable process.
Last Thoughts
It’s not only about recouping lost money and ensuring the financial health of your business. Deduction management software is a great method to control your deductions. Working with a consultant for food and beverages can also be incredibly helpful.
Instead of letting deductions drain your profits, take charge of this process and turn what was once a headache into an opportunity for smarter business expansion. Your bottom line will thank you.