Walmart allowances are used to help Walmart to recover some of the cost of doing business. Most of the allowances can be given Off Invoice (OI). Allowances, for the most part, are found in agreements between suppliers and Walmart.
Allowance deductions depend on what allowances the Walmart buyer and the supplier agree on when setting up the vendor agreement and the terms. When you are negotiating the types of allowances that you are going to give, make sure that the vendor agreement is filled out to match what you have discussed.
The most common error when filling out the vendor agreement is to put that you are going to give Walmart an allowance but then not check how you expect to give that allowance. By doing that, you are agreeing to give that allowance Off Invoice.
The most common OI allowances are “New Warehouse” allowances, “Defective Merchandise” allowances, and “New Location” allowances. Most of the other allowances are better if you agree to give them on a quarterly or yearly bases.
When allowances are not given correctly off the invoices you will see deductions for Walmart allowances. The deduction codes for allowances are in the 50s and generally involve allowances that are on your Online Supplier Agreement (OSA). These codes are:
The most common reason for getting allowance deductions is not giving the allowances in the correct spot when invoicing Walmart. Your invoice should mirror the raw EDI data from Walmart. Some suppliers do not select to pull the raw data from Walmart’s EDI transmission, so allowances are given in the wrong area of the invoice.
An example would be if in the raw EDI data it shows that you are to give the allowance off the bottom of the invoice, but when you transmit the invoice, you are giving the allowance off each line of the invoice. Walmart will keep the allowance that you gave to them in the incorrect locations but then take a deduction for the allowance off the entire invoice.
Another common error occurs when you are supposed to be giving a defective allowance but you transmit the invoice as another allowance type such as a promotional allowance. Again, with this Walmart will take a deduction for the valid deduction code but keep the invalid allowance that was given off invoice.
Walmart’s line-level matching system cannot match an allowance that is given off in the wrong area of the invoice which is why you will see an allowance deduction. This is why it is very important that when your EDI team is receiving the raw data from Walmart, they retrieve all of the segments and transmit all of the required segments.
The first step you will need to do to correct this error is to have your EDI team pull the Walmart raw EDI data and see where the allowances are supposed to be on the invoices. If they are not showing allowances in the raw data, then they are not pulling that segment from the raw data and will need to change the segments that they are capturing. This is a common mistake that a lot of suppliers make. Remember you are supposed to be mirroring the invoice to the raw EDI data.
If the segment that you are putting the allowance in when transmitting the invoices is not the same segment, then you are transmitting the invoice incorrectly. To correct this mistake, change the allowance to the correct segment and remove it from the incorrect segment.
You will need to create a spreadsheet showing all of the invoices that the invalid Walmart deductions were taken on. On this list, you will need the invoice number, PO number, allowance code, deduction amount, check date, and check number. Also, provide a few invoice examples showing that you gave the allowance off the invoices.
The more information that you provide to Walmart upfront when disputing invalid deductions, the better chance of getting it resolved the first time around. If you are seeing deductions for Walmart allowances, then you would need to dispute these in the Walmart disputes portal explaining the error.
Sometimes the accounting team will research this error and pay the invalid deductions back without needing additional information. However, the most common response to an invalid allowance deduction is that you will have to go through your buyer to approve payback. At that point, the buyer should work with the accounting team to get the invalid deductions repaid.
SupplyPike offers an easy software solution for disputing invalid deductions. Our Deductions Navigator software will automatically download the necessary documents, such as POs and invoices, showing the valid allowances so you can get your money back.
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