Running the operations of a CPG isn’t an easy job. Maintaining profits can be an overwhelming task when you have to manage production costs, relationships with distributors, and marketing campaigns. What if I told that the greatest risk to your bottom line isn’t the increase in material costs or stiffer competitors, but rather the deductions that are quietly eroding your profits?
Deductions management is not the most fun part of running a company, but it’s crucial to CPG brands. If a retailer does not pay a bill in full, whether due to chargebacks, ambiguous compliance issues or promotions, profits will be slashed. And when the cash flow is already strained these deductions could make all the difference between growing and struggle.
Poor Deduction Management The Actual Cost
Let’s get real There is no one who creates an CPG product with the intention of spending countless hours battling with distributors about deductions. However, many business owners are shocked to discover that these deductions could quickly accumulate.
If you do not have a proper deduction management plan, your company is likely to constantly feel like it’s losing money. It’s a hassle, consumes lots of time, and most important, it distracts you from what you should be doing: building the reputation of your brand.
The absence of transparency can make the situation even more complicated. Many deductions are applied with little explanation, and figuring out the ones that are genuine can feel like solving a never-ending problem. Certain brands might not be aware of the amount they are losing until they examine their books. At that point many thousands, or even millions could have already been lost.
What Deduction Management Software Changes the Game
The good news? The issue doesn’t have to be handled manually. Deduction management software streamlines the process of analyzing, tracking and resolving, deductions.
Businesses can now see where their money goes and why certain deductions were taken without the need to sort through spreadsheets. Software tools help companies dispute claims quicker, allowing them to get more time to recuperate the revenue.
Automation can also result in less human error, and more accurate financial reports. This kind of clarity is crucial when you are running a CPG company. It gives you the confidence to grow, invest and make deals with retailers.
The role of Food & Beverage Consultants in Keeping Your Business Profitable
Even though software can be an effective tool when it’s in the right hands but it’s always beneficial to have a professional on your side. This is where a food and beverage expert comes in.
Food & beverage consultant who have experience working in the field of food are able to assist CPG companies set up better deduction strategies. They can also help train their teams and negotiate better terms with distributors. These consultants know the ins and aspects of the industry and are able to offer valuable insight that would take years otherwise.
Expert advice can make the difference in a growing brand’s ability to stay clear of endless arguments regarding deductions and make deduction management an efficient and profitable process.
Final Thoughts
It’s not only about recouping lost money and ensuring the financial health of your business. Software for deduction management is a great method to control your deductions. A consultant for food and beverages is also extremely beneficial.
Don’t let deductions deplete your profits. Make a stand and transform a problem that was once a pain into an opportunity for better and more profitable growth of your business. The financial results will be grateful.