Summary: This blog outlines six clear signs that indicate when a CPG brand should consider outsourcing its deduction management process. From lacking a dedicated deductions specialist to struggling with backlogs, lost margins, and growing operational complexity, the post helps brands evaluate if they’ve outgrown manual or in-house approaches. It introduces DeductionGenius by Promomash as a comprehensive solution that combines technology and human expertise to manage, reconcile, and recover invalid deductions efficiently freeing up internal resources and improving profitability.
Deduction management: is the process of tracking, validating, disputing, and resolving short payments or chargebacks from retailers and distributors—ensuring that only accurate deductions are accepted, and lost revenue is recovered.
So, deductions are driving you crazy. You’re not alone—and it may be time to consider getting help.
Deduction management can quickly overwhelm even the most seasoned CPG operations team. If chargebacks and short pays from customers like KeHE or UNFI are stacking up, it might be time to bring in an outsourced deduction management service to help take control, recover lost margin, and return focus to strategic priorities.
A comprehensive service like DeductionGenius from Promomash doesn’t just organize and validate deductions—it actively recovers invalid deductions on your behalf and gives you full visibility into why they happened in the first place.
So, how do you know when it’s time to get help?
Here are six signs that your business will benefit from outsourcing Deduction Management.
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You don't have a deductions management specialist on your team.
Let's face it: Few get into consumer products for the fun and ease of managing deductions. It’s a hassle. Experienced deduction managers are hard to find, and there is inevitable turnover. Promomash can provide deduction management services long-term, or until your team is ready to assume responsibility. -
You don't have a deduction management strategy.
Even when you know your end goals, you may not know the best path to get there from where you are right now. The Promomash “digitize-reconcile-recover” model covers all the bases and will quickly deliver value to your brand. -
You have a growing backlog of deductions to process.
Some brands just don't have the resources to properly and expeditiously process all of the deductions they receive. Promomash can add the extra hands required to get get caught up with deductions and get the job done in a timely manner. -
Deduction management is taking away from strategic activities.
It is a good business move to bring in help when your team (or even you) need to focus on more important matters than the time-consuming activity of validating deductions. If you're a founder, for example, and find you're spending too much of your time on this, that's a clear sign. -
Lack of deduction management is costing you margin and time.
Not only do invalid deductions cost brands in the form of leaked profit margins, but they also cost a lot in terms of internal time spent on them. In addition to helping you minimize invalid deductions, an outsourced service like DeductionGenius creates cost savings by reducing steep learning curves and staffing needs. At Promomash, our combination of technology and human expertise does the work more cost-efficiently than even the most seasoned in-house expert due to the infrastructure and the economies of scale we've built and improved upon over years. -
Deductions are preventing a healthy (35-40%) gross margin.
Gross profit/net sales...a pretty simple equation. But how much do you know about the cost of goods sold part of gross profit...or the trade spending costs that drive net sales? An outsourced service like DeductionGenius will help you understand the customers, products, and reasons for the costs that erode margin so that you can do something about them.
Whether your need is for a specific part of the process or all-encompassing, Promomash has an option to serve your needs. Our managed service for deductions delivers a high-quality process at a lower cost than employing your own full-time resources – providing you with an excellent investment/payback balance. Learn more about our services or schedule a time to meet with us and explore how we can help.
