Most food and beverage manufacturers know margin leakage exists somewhere in their trade spend program. What they cannot tell you is where, how much, or how long it has been happening. That gap is where real money disappears.

During the IFMA webinar What a Well-Structured Trade Spend Program Looks Like, Dean Rallo, Solutions Advisor at iTradeNetwork, spoke to what it takes to move from assuming there is a problem to actually identifying it. Rallo's assessment was direct: "I can't really recall anybody saying, 'we've got this one hundred percent under control'." That level of acceptance has become so common that many teams have stopped questioning it.

The Foundation Has to Come First

Before a manufacturer can identify where trade spend is underperforming, there needs to be a real program in place. A structured plan with defined workflows and clear ownership is what makes visibility possible. Without it, any attempt to catch errors is inconsistent at best.

Rallo put it plainly, "The biggest blind spot that's out there today is not having the foundation of a solid trade spend program in place. You need to have a plan as well as a process."

Trade spend programs carry real complexity. Agreements establish who is entitled to claim and at what rate, along with which products are covered. Claim files, often enormous, arrive daily or monthly from distributors and operator partners. Those files are messy by nature. Line items get truncated, and unit names are inconsistent. Getting the agreement and the claim to reconcile against each other is where the identification work begins, and doing that manually at any meaningful scale is not viable.

What Processing Claims Really Means

Teams that treat claims processing as purely a payment obligation are leaving insight on the table. Getting claims paid is necessary, but the data flowing through a well-run process is also a source of real commercial intelligence. What is being sold at the SKU level? What is moving through distribution that the sales team does not yet know about?

"If that's the only reason you're processing claims, you're missing out," Rallo said.

When the finance team processes claims in isolation and that information takes sixty or ninety days to reach sales, the insights arrive too late to act on. A good process gets cleansed claim data back to the field within roughly five days. That pace is what makes the information useful.

Identifying the Specific Shapes of Margin Risk

Margin risk is not abstract. It shows up in specific, identifiable error types: double dips and invalid rates being the most common. Each one behaves differently and warrants a different response once identified. Some point to a data issue, while others reveal a pattern worth a direct conversation with a specific partner.

The identification step is what makes any of that possible. Bucketing errors by type turns a general sense that something is off into a specific, addressable problem.

"Once you start to bucket it and create that visibility, you could start to make business decisions on how you want to handle each one," Rallo said.

The Question Worth Asking Your Own Team

If you asked your team today why they process trade claims the way they do, what would the answer be? A workflow built around spreadsheets or VLOOKUP tables is a signal the process has not been examined against what it could be.

"Challenge the process," Rallo said. "If you've been processing trade the same way for years, ask why. What could we do to make it better? How do we become more efficient at it?"

The manufacturers making real progress on margin leakage are building infrastructure that normalizes data while linking it back to agreements and surfacing discrepancies at a pace the whole organization can act on. The ones doing that consistently are the ones who stop assuming and start knowing.

Not sure where your biggest gaps are? Take our 30-second Trade Spend Program Health Check to get a baseline on your exposure.

Want to go deeper? Schedule time with an iTradeNetwork trade spend expert to explore what a more structured program could look like for your organization.