In the maze of business finances, handling deductions is tough for all types of companies. These deductions directly affect how much profit a business makes and can cause problems with the flow of cash. While bigger companies have many options to deal with deductions, smaller ones, known as SMEs, struggle to find the right solution for managing them.
For SMEs, figuring out deductions is especially hard. With fewer resources and people, they're more vulnerable to the negative effects of deductions on their money. Among the many choices out there, SMEs often have trouble finding a deduction system that fits their needs and helps them grow steadily, especially when the market keeps changing.
1) High Volume: The sheer volume of deductions can overwhelm even the most organized businesses. Each deduction represents a potential loss, impacting the bottom line. Manual processing exacerbates this challenge, leading to errors and inefficiencies that can snowball over time.
2) Cashflow Problems: Deductions directly impact cash flow, posing a significant challenge for businesses. Resolving disputes and recovering funds often involves lengthy processes, resulting in delays that affect financial stability.
3) Tight Deadlines: Meeting deduction resolution deadlines is paramount. Manual processes not only increase the likelihood of errors but also prolong resolution times, jeopardizing compliance and relationships with customers.
1) Automation Challenges: Implementing automation for deduction management in-house presents a substantial barrier for small and medium enterprises (SMEs). The upfront costs, both in terms of technology and manpower, are often prohibitive, making it an unrealistic option for many.
2) Trade Partners not Supported: Many deduction management software available in the market do not cater to the diverse needs of SMEs. These solutions may lack support for the trade partners SMEs commonly engage with, further complicating the deduction resolution process. They might only support the big players like Amazon and Walmart while leaving smaller retailers like Walgreens.
3) Expensive Third-party Services: Third-party deduction management services are often priced out of reach for SMEs, leaving them with limited options. The cost implications of outsourcing deduction management can strain already tight budgets, hindering growth and sustainability.