What are consumer packaged goods?

The business needed to streamline its accounting functions to get visibility and control over its AR. The company partnered with Accelerated Growth to keep on top of collection effectiveness and ensure timely payments. In a reactive model, deductions management processes are well documented, including researching, validating, tracking, and reporting deductions that help align current operations with expansion plans. Then we deep dive into the solutions that CPG companies can deploy to create intelligent deductions management framework and prevent revenue leakage. Bob has 25 years of finance and accounting leadership experience serving companies from the Fortune 500 to the middle market.

• Therefore, CPG A/R leaders looking for ways to improve their deductions process need to look closely at the deductions process maturity model to enhance productivity, increase effectiveness and prevent revenue leakage along the way.
• A slotting fee can be defined as an amount paid to retailers by CPG companies to have their products featured on its store shelves.
• Today is our fourth episode in the “First Hire” series where we talk about making first hires in marketing, finance, sales, and operations.
• This method is known as cash basis accounting — and it’s not the most strategic method for a new CPG company.
• Recent consulting news & industry insights from the Bridgepoint digital content & research teams.
• The retailer would recognize the advertising allowance received as a reduction of cost of goods sold.

But for this process to work, you need to make sure everyone in your organization is playing their part. Following the ins and outs of these deductions is time-consuming and costly. Engage your broker in helping manage this process and hold customers accountable. For CPG companies, your future balance sheet drives your future cash needs, like capital expenditures and raw material procurements.

Senior General Ledger Accountant for large stable CPG manufacturing company

You should know how much you have, where it’s coming from, and where it’s going. In other words, cash flow management looks at your past, present, and future cash to guide various business decisions. Hiring an industry experienced accountant or bookkeeper to assemble your chart of accounts correctly is a worthwhile investment in the long run. Because food manufacturing companies operate much differently than other industries, it’s critical to produce financial reporting that’s comparable to others in your industry as well as comply with reporting standards. Instead, businesses that use accrual accounting can leverage data to make informed and calculated decisions that focus on business performance and not just cash.

By understanding the various stages of deductions process maturity and a HighRadius solution designed for driving change, you can finally move toward a level of deductions automation other CPG companies can only dream of. In this model, best-in-class CPG deduction teams get an AI-powered cloud solution for deductions management. In addition, predictive analytics based on historical customer behavior forecasts deduction validity with greater accuracy. A/R leaders believe that embedding all of these processes into a collaborative workflow tool will reduce the turnaround time for deductions resolution and improve customer experience. Such workflow tools can semi-automate the deductions process, giving finance personnel more time to focus and make better decisions for A/R. Registering a deduction with available first-hand information is no longer a challenge since business systems reflect signed deals and the required contractual backup.

Need Help Managing Trade Spend?

Managing promotions and discounts offered by manufacturers is complex due to the multiple layers of promotions, discounts and ad hoc promotions, and assumption-based category sales objectives. A majority cpg accounting of manufacturers provide retailers with trade discounts, quantity discounts, seasonal discounts, etc., adding to the complexity of trade promotions in terms of volume, price and process.

A miniseries full of insights and actionable tips for brands looking to expand their retail footprint. If you have specific tax-related questions, we encourage you to contact your personal tax advisor or call our tax hotline at the numbers listed below. © 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

How Infosys BPM Drives Value for CPG

In this approach, technology supports essential processes but only in part. Many CPG A/R Leaders want to drive change in deductions handling, but only those organizations who fully understand the challenges have persisted in fixing the deductions problem. If continuous improvement and prevention of revenue leakage is a top priority for you in today’s economy, you must focus on better deductions management now. We help develop a proper financial and tax foundation that can support the rapid growth of your brand. We strive to take the accounting, tax and finance issues off your plate so you can concentrate on your business, and provide you with the tools and real time information you need to better make decisions and manage your operations.

• As people understand the activity better – what is in and what is out and how it is calculated – it can lead to great insight particularly in an inflationary environment with constant change.
• The deductions process maturity journey for consumer goods companies is distinct.
• In Accounting and has worked for various CPA firms in Kentucky, Tennessee, South Carolina, and Alabama.
• Teams that cannot resolve the invalid deductions problem leave money on the table.
• This complexity must be addressed with a well-integrated, effective trade promotions cycle.
• Until recently, it’s been difficult for manufacturers to take advantage of the internet and sell CPG through e-commerce channels.

Despite data standardization, information silos still exist in this model. With no single view or common platform for the teams involved to review this information, some groups are dependent on other groups to extract needed info. At the same time, the customer lacks access to up-to-date information, leaving them dependent on supplier companies to share updates or claim status.

Dolly currently serves on the adjunct faculty of Baruch College, her alma mater. A majority of CPG companies find it a challenge to manage logistics across multiple vendors, manufacturing locations, distribution centers, Carrying and Forwarding (C&F) locations, distributors, and dealers. Infosys’ solution identifies low utilization routes and optimized solutions. Our solution enables efficient data management of transport vendors and contracts management with new transporters through research and analytics. HighRadius has experience in driving 100+ successful transformation projects for Order to Cash. Today, 8 out of the 10 of the World’s Largest CPG companies trust us to manage their A/R. Some of our top customers are P&G, Unilever, Danone, AB InBev, Ferrero, Church & Dwight, Mondelez, Mars, and Johnsonville.

However, there is only limited support and capability to leverage the deductions process as a strategic business operation. For effective deductions management, cross-department collaboration is a must. While the responsibility of the investigation lies with the A/R teams, it is often other teams like Sales, Supply chain, Logistics, and Customer service that need to execute the investigation.

Our rapidly growing manufacturing client is looking to add a forward-thinking, analytical Accounting Manager to their team. They have grown to over $35MM in revenue over the past 20 years and are preparing for a new phase of more focused customer acquisition. This person has the opportunity to work alongside and report to the VP of Finance. Receive timely updates on accounting and financial reporting topics from KPMG. Infosys’ outsourced operating model is built on clearly defined processes and assigns responsibilities with technology multipliers such as workflow systems and analytical tools.

The answers to these questions and many more will tell you how agile you are in providing actionable forward-looking information. The size, complexity and distributed nature of data needed for increasingly closer to real-time and optimized decision making, means that rigid processes, architectures and tools are breaking down. Trusted clinical technology and evidence-based solutions that drive effective decision-making and outcomes across healthcare. Discover the products that 32,000+ customers depend on to fuel their growth.