Trade Spend: Stop Funding Retailer Profits
- The HRG Team
- Nov 21
- 2 min read
Trade spend is supposed to grow sales—not quietly fund deductions. Industry estimates often peg trade spend at 20–25% of gross revenue, yet leakage from unclear terms, mis-accruals, and missing proofs regularly eats 1–2 points of margin.
Where the January “surprise” happens.
Cooperative advertising (co-op) and market development funds (MDF) reconciliations arrive with fuzzy backup.
“Rate card drift” means the ad ran at a different cost than you accrued.
Promo proofs live in email, not your system.
Post-audit debits sweep anything not tied out.
Fictional example (for illustration): A beverage brand ran Q4 BOGOs. They accrued at 12% but actuals landed at 14.2% because two retailers used different unit-of-measure (UOM) math. The 2.2-point gap turned into January debits. A simple rate-card tracker and proof library would have stopped it.
Close your year without funding someone else’s P&L
Lock your rate card now: One source of truth (by retailer) for co-op, MDF, ad fees, and expected lift assumptions.
Proof library: Store ad tear-sheets, screenshots, and signed promo terms in a shared, searchable folder by event ID.
Accrual precision: Accrue to signed events, not email “plans.” Tie amounts to specific POs and weeks.
Price-file sync: Confirm list/net files are in sync before events start—especially if tariffs, cost changes, or pack changes hit this year.
Post-audit readiness: Keep “audit-ready” packages (PO, invoice, proof, terms) for top 20 events.
Monthly true-up ritual: Finance + sales meet monthly to blackline actuals vs. plan.
Year-end trade spend checklist
Rate card validated for every retailer
All Q4 promo proofs archived and linked to events
Accruals tied to events/POs (not just % of sales)
Price files aligned across systems
Top 20 events “audit-ready” with one-click packages
Profit and loss (P&L) review: planned vs. actual trade rate
Soft CTA: Want a light, fast trade-spend scrub before close? HRG can run an “audit insights” pass and flag the 3–5 biggest leak paths.
