Calling All CFOS: Bring Sanity Back to the Deductions Process

As a CFO, are you frustrated with the ever increasing trade spending line on your P&L statement? Are you tired of unanticipated trade spending surprises? Nothing ruins a CFOs day like receiving a $150,000 deduction no one saw coming. Thankfully, CFOs can bring sanity to the deduction management process. By creating one cloud-based repository for all deductions, including the events causing those deductions and the funds behind deductions, CFOs can access monthly accrual reporting that will help streamline the monthly GL accrual process. Imagine all of the benefits of being able to report metrics such as expense, profit and cost per incremental unit by SKU, month and account as well as see profitability by account, region or SKU. The trade promotion spending line item can be as high as number three or four on a company’s P&L statement, and there seems to be very little visibility on the ROI for most firm’s trade spending expense. Implementing a cloud-based TPM platform that is driven by process, visibility and accountability, has enabled many CPG firms to drop as much as 10% of trade spending funds to the bottom line. Despite the average CPG firm spending between 15 and 25 percent of gross revenues on trade promotions, spreadsheets continue to be the “go-to” tool for CFOs. The problem with spreadsheets is they don’t support process very well, and they break down at the first sign of change in the product or account hierarchy. Spreadsheets do not provide good oversight or approval mechanisms, which is critical for CFOs. It is difficult and time consuming to aggregate spreadsheet data and next to impossible to...

A CEO’s Guide to Trade Promotion Management

Most CEO’s have a lot on their plate. Why should a leader sitting this high up the food chain be bothered with finding a solution to out-of-control trade spending? Here are three good reasons for a CEO to get involved: The average CPG company spends between 15% and 25% of gross revenues on trade promotion spending Trade spending can be the number three or four line item on a company’s P&L statement Putting trade spending process into a solution that provides visibility, accountability and oversight can drop as much 10% to the bottom line Now that we have your attention, CEOs should know there are five general approaches to a trade promotion solution: Excel spreadsheets, on-premise software, hosted servers, homegrown programs or multi-tenant cloud solutions. While Excel spreadsheets appear to be free, it simply cannot tie together the full trade promotion process. On-premise software is typically built on old technology and costs associated with hardware, software and infrastructure cost can be very high. Hosted server solutions leave serious doubts about the security of your data; and creating home grown programs turns your IT team into a development shop. That leaves a multi-tenant, cloud-based platform as your best consideration. Moving Trade Promotion Management to the cloud delivers a total cost of ownership at least 50% less than of most on-premise solutions. Cloud-based solutions can easily be accessed from any web enabled device and the implementation period is cut in half compared to on-premise solutions. Data integration is easier due to a very data friendly API, and integration tools built for the cloud are quick and easy to implement. The real-time...

Premier Nutrition Corporation Rejects Antiquated TPM Solutions for New, Agile Approach to Cure Spreadsheet Overload

In the Consumer Packaged Goods industry (CPG), rapid growth is a sure fire way to identify insufficient business tools and outdated processes. Premier Nutrition Corporation’s revenue and customer base grew seemingly overnight gaining heavy distribution into national food, drug and mass channels. The manufacturer of protein shakes, bars and powders and joint supplements quickly realized Trade Promotion Management (TPM) happens in real time, while spreadsheets don’t. “With the company now operating in various trade channels and running promotions more frequently, it was critical to understand if we were actually making a profit,” says Anne Spalding, Vice President/ Controller of Premier Nutrition Corp. “Tracking data on spreadsheets and chasing down the sales team for information was not an efficient way to analyze the financial impact of a promotion.” Its overreliance on manual spreadsheets to track trade spend for approximately 40 SKUs was no longer sustainable for the expanding business. The nimble manufacturer accustomed to operating at a fast pace and without an internal IT department, turned to cloud-based CPGToolBox to transition from managing spreadsheets to managing trade promotions. Adopting TPM technology in the cloud allowed Premier Nutrition Corp to avoid the hassles of slow servers and onsite IT maintenance, without sacrificing functionality, flexibility, scalability or speed. “We don’t have to wait for our data to upload to a server or live in fear of a server crashing,” notes Spalding. “CPGToolBox offered a new, agile approach to the other antiquated TPM systems requiring high costs and IT demands.” With the company’s data now stored in one centralized system, Premier Nutrition Corp has gained considerable visibility and control into its trade spending....