Trade Promotion Strategy – How the Right Expertise Drives Better Results

Trade promotions are in motion, the strategy looks solid. So, why is the company still losing thousands to unverified chargebacks? Perhaps the right expertise can make all the difference.

As a CFO your finance team might be overwhelmed with deduction claims from multiple retailers. Every month, you receive hundreds of requests (covering discounts, rebates, and promotional allowances) supposedly linked to trade promotions.

But there’s a problem: 

Many of these deductions don’t align with your company’s records.

It gets even worse when you review a deduction report and find that a major retailer has deducted a significant amount from their latest invoice. Their claim? A promotional discount for a nationwide campaign. But when you check internally, the sales team has no record of such an agreement—perhaps due to poor cross-team collaboration. The marketing team confirms they ran a regional promotion, but not at the scale the retailer claims.

Now, there are several dilemmas to deal with: 

1. Challenging the retailer means a long back-and-forth process, potentially damaging the business relationship.
2. Approving the deduction without verification means writing off a significant sum, contributing to revenue leakage.
3. Digging into the details manually requires hours of reconciliation, pulling invoices, emails, and contracts (On-site finance teams may already be operating at full capacity and overwhelmed.)

Keep reading to find out how to prevent deduction disputes before they happen (rather than reacting to them) and how offshore expertise can help. 

The Challenges of Trade Promotion Management 

Without a structured Trade Promotion Management (TPM) system, finance teams may struggle to validate claims efficiently. There might be poor cross-collaboration, or no centralized database linking promotional agreements to deductions, forcing them to rely on spreadsheets, scattered emails, and past invoices. As a result, they end up approving many deductions simply because they lack the time and resources to dispute them effectively.

Without the right expertise and support to the end to end process, unverified deductions can often add up to millions in lost revenue. Thus, eroding profitability. 

Here are some of the challenges of trade promotion management: 

1. Inaccurate Accruals

The accrual has to be a reasonable estimate of what they expect to receive in deductions. The accrual amount has to be calculated correctly and the expense has to be recorded in the correct period. 

The accounting teams should have the expertise to use the information from the planner to generate very accurate monthly accruals. The team should also compare the previous accruals, current accrual deduction and decide whether the current accrual is adequate or not. If there is any accrual adjustment required, then that has to be reported to the management. 

Many companies struggle with the calculation of accurate accruals. This, in turn, has a knock on effect that can cause teams to do prior year adjustments. 

2. Deduction Clearing Challenges

Retailer chargebacks and deductions can quietly drain hundreds of thousands of dollars from your business, often going unnoticed because they’re buried within thousands of transactions. From pricing discrepancies and logistical charges to unauthorized promotions and post-event adjustments, these deductions add up fast.

Without a structured verification system, companies risk writing off invalid claims, leading to unnecessary revenue loss. Implementing a robust review process helps finance teams catch and challenge unauthorized deductions, safeguarding profitability and ensuring that only legitimate claims are approved.

3. Lack of Real-Time Visibility

 Limited access to accurate promotional performance data. 

4. Inefficient Reconciliation

Without proper classification and validation, finance teams struggle to reconcile planned vs. actual deductions, leading to inaccurate accrual adjustments. 

5. Budget Overruns

Poor tracking of planned vs. actual deductions leads to uncontrolled spending and inaccurate accrual estimates. Without proper reconciliation, businesses risk underestimating or overestimating promotion costs, causing financial misalignment. 

Outsourced accounting firms have the expertise to ensure accurate tracking by linking sales planners, deduction records, and accrual adjustments. Thus, helping finance teams maintain control over budgets and prevent unexpected overruns.

How Offshore Expertise Can Improve Trade Promotion Outcomes 

Outsourcing offshore expertise has come a long way from mere data entry tasks. Today, offshore companies are working actively with the in-house finance teams, supporting the end to end trade promotion management (TPM) processes. 

For medium to large enterprises, offshore professionals assist with accrual calculations, deduction clearing, cash application, and reporting—helping finance teams recover lost revenue by identifying and disputing unauthorized deductions.

Here’s why hiring offshore expertise can be a smart choice: 

• Cost-Effective Talent: Gain access to skilled professionals at a fraction of the cost of in-house teams. 

• Around-the-Clock Support: Offshore teams operate across time zones, accelerating deduction processing and dispute resolution.

• Automation & Scalability: Leverage advanced technology and streamlined workflows to enhance Trade Promotion Management (TPM).

• Seamless Integration: Offshore support works alongside on-site teams, ensuring smooth collaboration without disrupting operations.

Conclusion

Trade promotion deductions aren’t just an operational hassle. They’re a serious financial risk that can quietly drain millions from your bottom line. 

With trade promotions often ranking as the second-largest expense for consumer goods companies, failing to track and reconcile these costs effectively is a costly mistake. The reality? Thousands of deductions pile up each year, many of which are written off without proper validation. 

Without the right expertise, businesses risk losing millions in revenue leakage (a.k.a money that could have been recovered with stronger oversight)

Outsourced accounting firms can help companies to establish stronger controls, precise tracking, and thorough validation, ensuring profitability isn’t left to chance. Success in trade promotion management isn’t just about handling promotions. Instead, it’s about having the right experts in place to protect every dollar.

Also Read: SmartyTrade Broker: A Comprehensive Overview for New Traders