It is not easy to run it as a CPG business. Between managing production costs, distributor relationships, and marketing efforts, keeping profits at a high level can be an uphill battle. What would you say if I said that the greatest challenges to your bottom line isn’t costs for materials or fierce competition it’s the deductions quietly taking away your profits?

Management of deductions may not be the most exciting element of running a business however, for CPG brands it’s the most crucial. Every time a retailer short-pays an invoice whether due to chargebacks or promotions or ambiguous compliance issues, it takes away your hard-earned profits. If cash flow is already tight these charges could be the difference between a successful and failure.

Poor deduction management costs significantly more than you imagine.

There’s no way anyone creates a CPG to fight over deductions. The deductions involved are not small and many business owners quickly learn.

If you don’t have a solid deduction management system, your company will feel constantly like it is losing money. It’s a hassle, time-consuming and distracts you on what’s most important growing your business’s reputation.

The absence of transparency makes the situation even more complicated. Many deductions are applied with no explanation, and finding out the ones that are genuine is like figuring out a never-ending problem. Some brands may not even know how much they’re losing until they look at their books. At that point hundreds or thousands could be gone.

Deduction Management Software: A Game-Changing Solution

The positive thing? You don’t have to tackle this problem manually. Deduction management software automates the process of tracking, analyzing, as well as resolving, deductions.

Instead of suffocating themselves in spreadsheets, businesses are able to know exactly where their money is going, and also why certain deductions were made. Additionally, the latest software allows companies to contest incorrect claims quicker while also recovering revenues lost faster.

Automation is a way to reduce human error and greater accuracy in financial reporting. This level of clarity can be invaluable in the management of an CPG company. It gives you the confidence needed to expand, invest in and negotiate with retail partners.

The importance of Food & Beverage Consultants in making sure your business is profitable

Although software is an extremely powerful tool in right hands, it’s always important to have a professional to assist you. That’s where a food & beverage consultant comes in.

Consultants experienced in the food industry can help CPG brands in developing smarter strategies for deduction management, train their teams on best practices and even negotiate more favorable terms with distributors. They are aware of the complexities of the food industry and offer valuable insight.

For companies that are expanding Expert guidance can be the difference between battling endless tax disputes or turning deduction management into an efficient process that can save you money.

Final Thoughts

It’s more than just finding lost funds as well as ensuring the financial health of your business. It doesn’t matter if it’s via deduction management software or an expert food & beverage expert, taking control of your deductions is being in control of your cash flow, your expansion, and even your future.

Control the situation and turn what was once a problem into a chance to help your business grow more efficient. Your bottom line will appreciate it.