Operating an CPG is no simple task. Between managing costs for production as well as distributor relationships and marketing, keeping profits in check can be a difficult task. What if you were assured that your bottom line wasn’t in danger due to rising costs of materials or fierce competitors, but by the deductions that slowly erode your revenue.
It’s not the most exciting aspect running the CPG brand however, it is one of the most crucial. If a retailer doesn’t pay an invoice, whether it’s because of chargebacks, promotions or other vague compliance issues it can eat away at your hard-earned profits. These deductions are especially important when cash flow has already been squeezed.
Deficit management that is not properly managed can cost a lot more than you thought.
Let’s be real: Nobody launches a CPG brand expecting to spend long hours fighting over deductions with distributors. These deductions aren’t minuscule, as many businessmen quickly discover.
There will be a lot of confusion as to how payments aren’t matching the invoices. It can be a struggle to contest unjustified charges and feel as if you’re losing money. It is frustrating, time-consuming and, worst of all it distracts your attention towards what’s important expanding your business.
What makes it even trickier is the absence of transparency. It’s sometimes difficult to determine which deductions are correct, as many are unjustified. Some companies don’t realize how much they’re losing until it’s time to take more time looking over their accounts, and by then some thousands (or even millions) may have already slipped through the gaps.
How Deduction Management Software Changes the Game
The good news? There is no need to address this issue manually. Software that can handle deductions take away the guesswork, by tracking these deductions, then analyzing and resolving them in a timely manner.
Instead of suffocating themselves in spreadsheets, businesses are able to know exactly where their money is going and the reason for which deductions were made. Modern software systems also permit companies to swiftly challenge false claims, saving them time and allowing them to recover revenue lost.
Automation also means less human errors, and more precision in financial reporting. If you own an CPG, this kind of clarity can give you confidence to scale up and invest in your business and bargain with retailers.
Food & Beverage consultants are crucial to the success of your company
While software is a great tool, sometimes it helps to have an expert in your corner. That’s where a food & beverage consultant comes in.
Experts who have experience in food industry consultation can help CPG companies develop better deduction management strategies, instruct teams on the most effective practices, and even negotiate better terms with distributors. They are experts in the field from the inside out and can offer insight that might otherwise take years to discover.
Professional guidance for businesses that are growing could mean the difference between endless debates over deductions and a system that is efficient and helps save money.
Final Thoughts
It’s not just about finding lost funds, but also protecting the health of your financial business. Making sure you control your deductions is crucial factor to regulating your cash flow and ensuring that you have a plan for the future.
Instead of delaying deductions that drain your profits Take control of the process and turn what was once a hassle into an opportunity to improve business expansion. Your bottom line will thank you.