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Deductions Trickery

Deductions Trickery: The Shakedown

Distributors pay you when they WANT to, impacting your cash flow and causing headaches for your business. 

Distributors are fickle friends, and CPG brands that need more sales for a distributor to deduct against will have to wait for their next check. They always have the upper hand, and they’ll put you through the gauntlet to see if your wares pass muster before you get a seat at the table. Those are the breaks, but it doesn’t have to feel foreboding. 

So, how does this work?

Per the contract, you’re promoting and manufacturing a spectacular product. You’re shipping it out on time, too, because, well… this is your business, this is your life, you’re not screwing around. And yet, you find yourself endlessly waiting for your check from the distributor to arrive. Cash flow is king, always, and when you’re bound to a distributor, you can find yourself feeling “shaken down” when you are waiting for your cut. 

Your product sales rank your brand with the distributor. High-selling brands get paid frequently. They’re celebrated by the distributor. If your product is new or slow-moving, the distributor might avoid you until enough product is sold before they peel off your promo and send you whatever is left: your profit /the scraps. 

These shenanigans strain your cash flow. You might even get the deduction report long before your payment. That’s annoying for your accountant, who has to offset that amount as a liability on your balance sheet. You end up leering at the deduction because you have nothing to balance it against until the check shows up.

We at Adesso have a simple yet powerful way for CPG brands to manage deductions while your check is in limbo. We call it these Pre Deductions. You should know how much your distributor is paying you. Now you can forecast revenue, get better cash flow outcomes in real-time, and know earlier if your promotions were effective. Would you like to have that peace of mind to help your business grow?

Schedule a demo today to find out how Adesso can solve your deductions workflow!