In the consumer packaged goods (CPG) industry, retailer deductions have become one of the most significant challenges that finance teams have to deal with. Each year, companies are losing millions of dollars through chargebacks, short payments, and compliance-related claims. A subset of these deductions may be legitimate, but many of them are not, and businesses often do not have time, tools, and visibility to dispute the deductions effectively.
This is why Deduction Management Software is gaining importance for modern CPG companies. Instead of spending endless hours working on manual spreadsheets and disorganized documents, brands can use automation and artificial intelligence to track and follow up on deductions in a timely and efficient manner.
This blog will go over what is Deduction Management Software, why it is important, and how MarginWiz provided a smarter solution for protecting businesses revenue and building a relationship with retailers.
The Challenge of Retailer Deductions
Retailer deductions are claims that retailers make against suppliers, which can happen for many reasons, including:
- Late deliveries or incomplete orders
- Issues with pricing
- Not complying with a deal for a promotion
- Missing or mismatched paperwork
While employee deductions do happen, not all of them are accurate or valid. Without a proper resolution strategy, most businesses just willingly lose out on the claim. The result is less profitability and a finance department that is frustrated and flustered.
Tracking manually using spreadsheets often worsens the issues. Deadlines are missed, mistakes are made, and a team wastes valuable time pulling documents for disputes. The old-fashioned way leaves a business susceptible to large revenue loss.
This is where Deduction Management Software like MarginWiz can help you.
What is Deduction Management Software?
Deduction Management Software provides a digital way to manage the tracking, analysis, and dispute of retailer chargebacks and deductions. By centralizing all deduction data in one place and optimizing the claims process, Deduction Management Software simplifies the process of recouping lost revenue.
Some of the primary features of Deduction Management Software are:
- Automated Capture of Deductions – Automatically capture and categorize all deductions in real time.
- Dispute Resolution Tools – Automatically creates documentation to quickly respond to retailer claims.
- AI-Powered Insights – Identify patterns and root cause of repeat deductions.
- Real-Time Dashboards – Create visibility across finance, sales and operations.
- Seamless ERP Integration – Integrates easily with accounting and ERP systems to provide accuracy and speed.
With MarginWiz Deduction Management Solution, CPG brands will no longer fight deductions manually. The software will to do the heavy lifting to enable focus on growth and strategy.
Why Choose MarginWiz Deduction Management Software
- Recover Lost Revenue Efficiently
Each deduction signifies a threat posed to you financially. MarginWiz offers finance teams the ability to dispute baseless claims faster so more revenue can be recovered. - Save Time and Reduce Errors
Automation takes the place of hours of manual data entry and helps eliminate the errors that too often cost companies money. - Data-Driven Decision Making
Artificial intelligence-based insights in MarginWiz indicate repeat problems enabling companies to proactively eliminate future deductions. - Strengthen Retailer Relationships
Resolving disputes quickly and professionally establishes trust and creates long-term relationships between companies and the retailers they partner with. - Scalability for Growth
As deduction volumes increase, MarginWiz can scale with your business, ensuring no claim is missed.
How MarginWiz Deduction Management Software Works
Picture a consumer packaged goods business that serves several large retailer customers nationwide. These retail customers will each have their system, policies, and timing for deducting the money, and finance teams do not have the time and resources to keep pace, even to fully address justifiable disputes.
With MarginWiz Deduction Management Software, every deduction will automatically automatically be pulled together and processed in a single system. The system will categorize the deduction, validate the deduction, and assemble the dispute case file including supporting documentation. The finance teams can easily submit the claim and track the status in real time.
While simple, this procedure is incredibly effective in ensuring deductions are diligently tracked and a claim is filed to protect margins.
AI Advantage in Deduction Management
Artificial intelligence adds yet another layer of effectiveness to MarginWiz Deduction Management Software. The benefits of AI will allow companies to:
- Identify which deductions are likely to be invalid.
- Identify patterns of recurring deduction causes at either the retail or product line level.
- Suggest preemptive measures for reducing future deductions.
- Estimate financial forecasts for planning purposes.
This represents a transition from being reactive to being proactive in deduction management, which will change the deduction management function from a cost center to a profitable strategy.
Long-Term Benefits of MarginWiz Deduction Management Software
Companies utilizing MarginWiz Deduction Management Software invest in the following long-term successes:
- Higher Profitability – More money kept by the company, less lost to invalid chargebacks and deductions.
- Improved Compliance – Consistently meet retailer requirements and expectations.
- Smarter Forecasting – Improved data driven forecasts with best practice recommendations for future sales.
- Team Efficiency – Finance teams are able to spend more time implementing strategic initiatives as opposed to reviewing chargebacks and deductions.
- Competitive Advantage – Increased margins and healthier cash flow.
Conclusion
Deduction by retailers is part of the CPG industry, but it doesn’t have to eat away at profits. Deduction Management Software like MarginWiz can simplify the deduction tracking process, speed up resolution, and assist in staving off future loss using the efficiency of AI and automation.
Companies no longer have to let deductions reduce your margins; your company can take an active part in recovering the revenue and foster even better relationships with your retailers.
For companies wanting deduction management to become a new competitive advantage, MarginWiz Deduction Management Software is the smart choice for prosperous, sustainable, long-term solutions.
