What is Deduction Code 10?
Code 10s are generated when there are discrepancies in allowances between the invoice and the PO. These could be differences in allowances at the order/invoice level or the net cost of allowances at the line item level. Examples of potential errors are discrepancies in allowances, incorrect pack, quantity differences, or pricing issues.
Common Root Causes for Code 10s
Code 10s typically result from discrepancies between the purchase order and invoice, such as incorrect pack quantities, pricing errors, or misapplied allowances. Below are three areas where these discrepancies often occur:
Invalid pack quantity: This occurs when the pack quantity listed on the EDI invoice differs from the purchase order. Verifying that pack quantities match between documents can help prevent these errors.
Misapplied allowance: Another common issue is when an item is billed at the gross cost rather than the net cost reflected on the purchase order. For instance, an item may be billed at $200, but with a $40 allowance that brings the net cost to $160. If the allowance isn’t correctly applied, this pricing discrepancy can trigger a Code 10.
Multiple errors: Code 10s can be due to a combination of issues, such as mismatches in both pricing and pack quantities. Each discrepancy must be separately identified and corrected to prevent future claims. A thorough review of the purchase order and invoice at the line level can help pinpoint these errors.
How to Prevent Valid Code 10s
Review the PO for correct cost and allowances information before filling the order.
Review EDI data and PO data to ensure what is sent/received matches the allowances agreed upon in the supplier agreement.
Review for correct cost, allowance, unit, and weight information. It is most common for valid Code 10s to arise from EDI errors.
Do not ship the product if the information on the PO is not correct. Instead, Walmart recommends contacting the buying department to request a price correction.
Can Code 10s be Disputed?
Yes. Although agreed-upon pricing allowances aren’t considered for payback, it is still possible to dispute an erroneous application of Code 10. Submit disputes in the Accounts Payable Disputes Portal in Retail Link. If the dispute is denied, you should still contact your buyer directly to request a payback.
How to Dispute Invalid Code 10s
Supporting Documentation:
Supplier agreement showing agreed-upon allowances.
Invoice (EDI 810) showing correct cost and allowances.
PO discrepancy email sent to the buyer.
A copy of that email is also needed if the supplier receives a PO maintenance email.