The running of a CPG brand is no simple job. Between managing costs for production as well as distributor relationships and marketing initiatives, ensuring that profits remain steady can be an uphill battle. What if I told you that the greatest threat to your bottom-line isn’t rising costs for materials or increased competition, but the deductions that are slowly reducing your revenue?
Deduction management may not be the most thrilling element of running a business but for CPG brands this is among the most crucial. Every time a retailer short-pays an invoice, whether it’s due to chargebacks, promotions, or vague compliance issues it eats into the profits you’ve earned. These deductions are particularly important in times when cash flow has been strained.
Poor deduction management can be costly and cost you lots of dollars
We all know that nobody is launching CPGs CPG to argue over deductions. As many business owners soon discover, these deductions can rapidly add up.
There will be a lot of confusion as to how payments aren’t matching the invoices. You’ll be struggling to challenge unfair charges and feel that you’re losing money. It’s exhausting, time-consuming and, most important of all, it takes your focus away of what’s important: growing your brand.
This is made more difficult by the lack of transparency. The explanations behind many deductions can be unclear which makes it hard to tell which ones are right. Many brands are unaware of how much money they’re wasting until they have a look to their books. When they do they might have lost hundreds of thousands (or millions).
Deduction Management Software: A Game-Changing Solution
The good news? This issue won’t need to be dealt with manually. Software that can handle deductions take away the guesswork by capturing their progress, analysing and resolving the issues in a timely manner.
Instead of being drowned in spreadsheets, owners of businesses can easily see where money is used and how deductions are taken. Better yet, software solutions allow brands to challenge false claims more quickly which saves time while recuperating revenue more efficiently.
Automation can also lead to lesser human errors and improved financial reporting. This clarity can be incredibly valuable when you are running the operations of a CPG business. It provides you with the confidence you require to expand, invest and make deals with retailers.
The Role of Food & Beverage Consultants in Keeping Your Business Profitable
While software is a great tool, it’s sometimes helpful to have an expert in your corner. This is the point where a beverage and food expert comes in.
Consultants with expertise in food industry consultation can help CPG brands develop smarter deduction management strategies, instruct teams in best practices, and negotiate more favorable deals with distributors. They are experts in the field from the inside out and can offer insights that would otherwise take years to discover.
If you have a brand that is growing, expert guidance can make the difference between battling unending dispute over deductions or turning management into a successful method to save money.
Final Thoughts
It’s not only about finding lost dollars and ensuring the health of your financial 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 deprive you of your profits. Instead, take control and transform what was once thought to be a hassle into a strategy for the smarter growth of your business. Your bottom line will thank you.