What is Deduction Code 56?
Code 56s are generated when there is an early buy allowance listed on your Online Supplier Agreement (OSA), but not on the invoice.
Common Root Causes for Code 56s
The common scenario for invalid Code 56s is that your Supplier Agreement states that the retailer should give an allowance off-invoice, but your EDI provider gives the allowance off-line-item. In this scenario, the correct dollar amount is withheld from the invoice, just from the wrong place.
Potential root causes of valid code 56s are:
Purchase Order Inaccuracy: Purchase orders may contain incorrect information, resulting in discrepancies if shipped without correction.
Unlisted Allowances: Allowances on the purchase order might be missing from the invoice.
Implicit Shipping Confirmation: Shipping on an inaccurate PO can be seen as verifying the PO’s details, which may block later dispute attempts.
Incorrect EDI Allowance Codes: Using the wrong code for allowances in EDI may trigger further deductions.
Allowance Calculations on Net Instead of Gross Amount: If allowances are calculated on the net invoice rather than the gross amount, it may result in unexpected deductions.
How to Prevent Valid Code 56s
Verify all POs are accurate before shipping and ensure invoices reflect the purchase order exactly.
Confirm with your EDI team or provider that allowances on your supplier agreement and PO are included on the invoices (EDI 810).
Double-check allowances specified in your supplier agreement appear on both the PO and invoice.
For any special deals, ensure clear documentation is provided to and acknowledged by the buyer.
Can Code 56s be Disputed?
Agreed upon allowances can not be disputed. However, if you can prove that the allowance was actually given on the invoice then it can be disputed.
How to Dispute Invalid Code 56s
Allowance disputes can technically be submitted through APDP. However, there are certain codes that Walmart has indicated are unlikely to be approved in APDP. Those are: Codes 50-59, 150, 151. The alternative is to attempt the dispute with your buyer. These deductions must be initiated with supporting documentation and approved by your buyer.