Quantity discrepancy deductions occur whenever the amount shipped from manufacturer does not align with the amount ordered or received by the retailer or distributor. Quantity discrepancies can either mean a product was short shipped, over shipped, or the wrong product was sent all together. This is another common category of deductions; specific and detailed supporting documents are needed in order to successfully dispute this. Fortunately, this category of deductions is clear-cut. With the correct supporting documentation, these deductions can be cleanly resolved. Certain retailers and distributors will also hire external auditing firms to conduct reviews of their accounts; manufacturers will often see multiple deductions taken as the result of a quantity discrepancy. If a true shortage occurred, these external auditing firms will assess deductions for missed off invoice allowances or overpaid freight allowances as a result of the short-shipped order. Fall Creek can assist with both the internal deductions as well as the external auditors’ deductions.

 

Also known as early pay discounts, cash discounts are common in the CPG world. Most retailers and all distributors require two percent discounts for early payment. This means that if a retailer or distributor pays an invoice within the allotted time (typically 10-15 days), they are entitled to take a two percent deduction off the invoice total. These may seem like relatively small individual dollar amounts, but this category of deductions can quickly add up. The cash discounts clock ticks from the day of the invoice receipt date. Fall Creek can assist in auditing your cash discounts to determine if they were earned or not. If they were not earned, we can submit a dispute and follow through to resolution.

 

Slotting is the way by which a manufacturer purchases warehouse or shelf space from a retailer or distributor. Slotting deductions are common, especially as a manufacturer is getting set up with new retailers or distributors, or if they are releasing new items. It’s sometimes quite affordable (a couple hundred dollars per new SKU), but sometimes it can be as much as tens of thousands of dollars per new SKU, depending on the retailer, the product, and the shelf placement. Slotting is negotiated prior to product being ordered so this is another category that tends to be black and white. Another facet of slotting is something called free fills. When a manufacturer begins shipping new product, they are required by distributors and many retailers to provide free fills, which means they ship one free case per new SKU, per new store to any retailers that agree to carry their product. This may seem reasonable, but most manufacturers will have their product entered in hundreds—sometimes thousands—of new stores. These free fills can add up very quickly.

 

Fall Creek has years of experience working with all the major distributors and retailers in the US; we are happy to take a look at your specific deductions and assist in validating them and disputing as needed. Please reach out for a complimentary introductory call to discuss our services in more detail and how we can support you.