Traps of the Trade: 5 things CPG Companies Need to Know About Managing Trade Spend

17 jun Traps of the Trade: 5 things CPG Companies Need to Know About Managing Trade Spend

Historical financial data supports accurate sales and expense forecasts. In turn, these display your future cash flow needs and empower you to budget smarter. With real-time data on sales figures, inventory levels, and cash flow, you can make informed business decisions with confidence. No more waiting for end-of-month reports — you’ll have the information you need readily available to track your progress and identify areas for improvement. With an experienced accounting team on your side, it can be cost-effective because you only pay for the services you need when you need them. By hiring us, you also save on time and training an in-house accountant, which includes providing benefits, maintaining accounting software, and building out your infrastructure.

Tracking Costs

If you’re brand-new to the market and don’t have much previous performance to reference, look at CAC levels and other relevant financial data for CPG startups that are similar to yours. If you had a niche snack brand with multiple product lines, a CPG expert might approach product line profitability analysis by diving into the data to uncover which SKUs are truly profitable. For example, you might Bookkeeping for Chiropractors find a top-selling item has lower profit margins due to higher packaging costs. In this case, you can work on renegotiating supplier contracts and focusing resources on products with stronger margins. This way, your brand can scale while maintaining a steady cash flow, even during off-peak production cycles. At Finatics, your dedicated accounting team will manage your day-to-day accounting activities so you can feel confident in your financial information and focus on running your business.

Instill a sound chart of accounts

Companies with high operating leverage tend to do better in bull markets and periods of high growth, as profits grow faster than revenue. Still, because of the fixated nature of the cost structure, they tend to get wiped out much quicker in economic downturns. Using this Online Accounting approach, COGS includes product costs and the variable costs incurred for fulfillment and operations. When your COA is well organized, you can quickly access metrics for financial reporting and generate financial statements with less effort.

• Below, we will go into an introduction to each of these three financial statements, exploring how they are important tools that can help provide a dashboard into your company’s financial health.
• If your company stands to benefit from enhanced analysis, contact our team at Balanced Business Group for personalized consultancy services.
• These characteristics are meant to help leaders forge a clear view of the long-term strategy for their company against which they can execute in the coming years.
• Analyzing sales trends and operational costs empowers us to identify the best markets to enter and adjust your supply chain strategy to minimize costs and increase your reach.
• For example, if a buy one, get one free coupon is redeemed for an item with a typical sales price of $2.00 and a related cost of $1.00, the company should record $2.00 in revenue and $2.00 in cost of goods sold.

Partnering With a CPG Accounting Expert for Success

Our expert financial management solutions enable businesses to focus on core activities and drive growth efficiently. We specialize in empowering consumer packaged goods brands with strategic financial management and innovative analytics, ensuring they thrive in a competitive market. When investing in companies in the consumer packaged goods sector, it is best to evaluate key points of the company’s financial data for information about accounts receivable and inventory turnover. Automated tools can also handle the complex task of inventory valuation to verify the accuracy of your financial statements.

Demand and Supply Planning

This unique life experience allows her to connect with clients on a deeper level, providing practical insights and tailored solutions. Her extensive industry knowledge and empathetic approach drive sustainable growth and success for the businesses cpg accounting she supports. For any business, managing inventory isn’t just a number on a spreadsheet, and this is especially true for CPG businesses. You have to keep track of consumer demands, production, and seasonal patterns.