But work that nonetheless needs to be done because at year-end shareholders want to know if there are outstanding liabilities.
Keeping track of all the different types of promotions, variables and statuses can be a lot of work. Because Sales do not see agreements as writing checks, what they do is strike deals based on different activities, promotions and different performances the retailer agrees to in return for a variable amount of money.Īs the amount is almost always variable, Finance is tasked with forecasting what the final value will be. This usually causes friction between Finance and Sales teams: the way Finance sees things is that Sales go out there and make crazy agreements all the time. And when the retailer asks for that money – and they can do it in many different ways – they need to know whether the request was correct, how much the retailer has already received, and how much the company still owes them…Īnd they must be sure about their numbers, because it’s the Finance team’s responsibility to tell the company’s management, and the shareholders, all about the company’s liabilities (and writing checks creates a liability) while keeping everyone happy. Each agreement is like they wrote the partner a check as it implies the company will ultimately owe them money. The Finance team is tasked with keeping track of the outcome of agreements the company signed with their retail partners. Let’s deep dive into Trade Promotion Management: one grey… chequebook balancing? They have the shared interest of the chequebook for which they have responsibility and accountability. And there are only two groups of people in a CPG company that can be at all passionate about Payments and Deductions: Finance, and Key Account Managers. This is because Payments and Deductions are like sports: you are either passionate about it, or you don’t care for them at all.
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