It is not easy to manage a CPG company. Between managing the cost of production, distributor relationships, and marketing efforts, keeping profits at a high level can be an uphill battle. What if I said that the biggest danger to your bottom line isn’t a rise in costs of materials or a slacker competition, but the deductions that are quietly eroding your revenue?

The management of deductions isn’t the most exciting part of running a company, but it’s crucial to CPG brands. When a retailer fails to pay an invoice due to chargebacks, promotions, or vague compliance issues it will eat into your hard-earned profits. This is especially true when cash flow has already been strained.

A poor deduction strategy can cost you a lot of money

There’s no way anyone creates an CPG to argue over deductions. Many business owners will realize, these deductions could add up quickly.

You’ll wonder why the payments don’t match the invoices. It can be a struggle to contest unfair charges and feel like you’re losing money. It’s time-consuming, frustrating and takes your focus away from what matters most building your business’s reputation.

The absence of transparency makes the process even more confusing. There are many deductions that are made with no explanation, and finding out what ones are true is like figuring out the ultimate problem. Some companies might not realize the amount they are losing until they review their books. In the meantime, thousands or even millions could be gone.

How Software for Deduction Management Changes the Game

The good news is that This issue can’t be handled manually. Deduction management software can automatize the process of analyzing, tracking, as well as resolving, deductions.

Instead of getting lost in spreadsheets, businesses can see exactly where their money is going, and also why certain deductions were made. Furthermore, modern software applications allow businesses to challenge incorrect claims more quickly which saves time as well as recovering the revenue lost more effectively.

Automation can also mean fewer human errors, and more precision when it comes to financial reporting. When you’re running a CPG business, that level of clarity is crucial. It allows you to expand, invest and negotiate with retailers from an vantage point of strength.

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

Software is an amazing tool, but occasionally you’ll need someone to guide you. That’s where a food & beverage consultant comes in.

Experts who have experience in food industry consulting can help CPG companies develop better deduction management strategies. They can also train teams on the most effective practices, and even negotiate better deals with distributors. They are knowledgeable about the details of the industry and offer insights that would otherwise require years of research to determine.

Expert guidance for growing brands can mean the difference between endless debates about deductions and a process that is simple and efficient, which can save money.

Final Thoughts

Deduction management is not just about recovering lost money but also ensuring the financial health of your business. Controlling your deductions is the key to controlling your cash flow and ensuring that you have a plan for the future.

Take control of the situation and transform the issue that was once a source of frustration into an opportunity for your company to become smarter. Your bottom line will thank for your efforts.