Kohl’s Invoicing and AP Deductions Guide

In this article, learn about: 

• Kohl’s invoicing and accounts payable standards 

• How to submit deductions disputes to Kohl’s 

• How to contact Kohl’s regarding merchandise and disputes 

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Managing invoices and having a clear and actionable plan for disputing potential deductions is key for any vendor looking to do business with a major retailer such as Kohl’s. 

This article will explore the requirements for submitting invoices and disputing deductions from Kohl’s.  

Invoicing Requirements 

• To send invoices to Kohl’s, use the EDI 810 Invoice document. 

• For the invoice to be paid automatically, the purchase order (PO), invoice, and the receipts must all match.  

• Full item costs must be included on the invoice, as specified on the PO. Discounts applied off-invoice will not prevent Kohl’s automatic deductions system from taking discounts, which could result in duplicates.  

• Kohl’s gives 75-day terms to its vendors, based on the receipt of goods (ROG) at each distribution center or retail store, not based on the shipping or invoice dates. 

• Split shipments will result in a shortage deduction for any units not received at the time of the invoice. When Kohl’s receives the additional units, they will be matched with the shortage invoice and the vendor will be paid.  

• Kohl’s allows its vendors to invoice by both store and distribution center, though invoicing by distribution center is preferred.  

• When applicable and approved, Kohl’s allows its vendors to include freight charges on the item invoices. 

• Kohl’s requires its vendors to use EDI 820 Payment Order/Remittance Advice to inform Kohl’s about when payments will be sent. This document should include details regarding shortages and cost price differences.  

Compliance Requirements 

Kohl’s has created a supply chain performance scorecard to grade a supplier’s performance and help determine potential deductions. The scorecard contains the following categories: 

• Fill rate 

  • Fill rate is defined as the vendor’s rate of shipments which are delivered on time and as ordered. Kohl’s expects its vendors to complete 100% of orders fully within the given window. Fill rate is calculated by comparing the total units received on time to the total units ordered.  

• Compliance dollars 

  • The compliance dollars category is intended to inform suppliers of non-compliance issues in a timely manner. Kohl’s goal is to reduce non-compliance issues to less than 0.7% of cost receipts. Kohl’s determines the compliance dollars by dividing total compliance charges by total cost receipts.  

• Audit failure rate 

  • Kohl’s performs spot checks on its inbound shipments and determines the audit failure rate based on the number of cartons with picking, ticketing, or labeling errors. The goal is to achieve an audit failure rate of less than 1%. Kohl’s determines this percentage by dividing the number of failed audits by the total number of audits performed.  

• Shipping performance (average days routing per week) 

  • As multiple shipments increase expenses, Kohl’s expects its vendors to route only once per week per distribution center. This requirement is calculated by determining the average number of days with routing entries by distribution center per shipping origin.  

• Shipping performance (shipment creation) 

  • Kohl’s expects its vendors to create shipments five days prior to the purchase order ship date. This number is determined by assigning points based on how many days prior to the ship start date that the shipment is created.  

• Shipping performance (PO first available day for pickup) 

  • Kohl’s desires its vendors to allow it to pickup each shipping load as early as possible. This is determined by assigning a score to shipments based on how early Kohl’s can pick them up, with the optimal score being 0, meaning that the freight was available for pickup on the start ship date.  

Remittance Codes 

Here is a list of the deduction codes that Kohl’s uses on its invoices, along with an explanation of their meanings: 

• A04: Discount Repayment (From an Invoice) 

• A05: Shortage Deduction Repayment (Repaying an M12 Deduction) 

• A06: Cost Price Deduction Repayment (Repaying an M10 Deduction) 

• A07: Markdown Repayment (Markdown Reversal) 

• A08: Buyer Approved Repayment 

• A09: Repayment for NOM (Not Our Merchandise) Returned Return 

• A11: Collect Program - Pickup/Consolidation Fees 

• A1E: Unit Cancellation Reimbursement  

• A1F: Unit Cancellation Charge  

• A1G: Delinquent Order Charge Repay  

• A1H: Delinquent Order Charge  

• A20: Callback Deduction 

• A23: New Receipt Return Deduction 

• A24: Markdown Allowance - Cost & Retail 

• A26: Markdown Allowance - Cost Only 

• A2I: Manual Repay Profit Assist 

• A2S: Import Miscellaneous Charge Adjustment (Repayment to the Vendor) 

• A2T: Import Miscellaneous Credit Adjustment (Deduction to the Vendor) 

• A30: Commercial Zone Multi-Stop Fee 

• A38: Import Miscellaneous Charge Adjustment (Repayment to the Vendor) 

• A39: Import Miscellaneous Credit Adjustment (Deduction to the Vendor) 

• A3B: Import Commission Payment 

• A3H: Compliance Freight Charge 

• A3I: Compliance Freight Credit 

• A3U: Compliance PO Fill Charge 

• A3V: Compliance PO Fill Credit 

• A41: Miscellaneous Charge Adjustment (Repayment to the Vendor) 

• A42: Miscellaneous Credit Adjustment (Deduction to the Vendor) 

• A54: D&D Deduction (Returned Merchandise that is Defective or Damaged and is Debited & Destroyed) 

• A55: RTV Deduction (Returned Merchandise that is Defective or Damaged and is Returned to the Vendor) 

• A5B: Repaying RTV/Callback/New Receipt Return Deductions or Shortages 

• A6A: Compliance Management Charge 

• A6B: Compliance Management Credit 

• A7E: Repayment for Allowance Profit Assist 

• A91: Quarterly Manual Broadcast Optimization Deduction 

• A9C: Recovery Audit Repayments  

• A9D: Recovery Audit Claims  

• A9N: AP Review Claims 

• A9P: AP Review Repayment  

• A9W: Incorrect Shipping Charge  

• A9X: Incorrect Shipping Charge Reimbursement  

• AAC: Kohl's Direct Ship Program Fee 

• M01: Merchandise Vendor Invoice Payment 

• M0B: New Store Discount  

• M10: Cost Price Deduction 

• M12: Shortage Deduction 

• M15: "Do Not Pay" charges - Handling Fee Deduction (Direct Ship PO's only) or Taxes 

Disputing Requirements 

Vendors have a maximum of six months of the invoice payment date to dispute Kohl’s deductions. Disputes should be submitted via email and contain the following information: 

• Name of the vendor in the subject line of the email 

• The purchase order (PO) number 

• The number of the disputed document 

• The total amount of money in question 

Kohl’s allows its vendors to submit one dispute email per PO number.  

If you need to dispute a shortage claim, Kohl’s requires you to submit supporting documentation, such as the bill of lading (BOL), proof of delivery (POD), or copies of the invoice. Both the PO number and the invoice number should be included in the subject line of the email. Shortage disputes can take six to eight weeks for Kohl’s to respond to. 

If you’re disputing a return-to-vendor (RTV) claim, the window is 60 days from receipt of the invoice. Be sure to include the type of dispute you’re submitting for the RTV claim, such as discounts, damages, and/or cost issues. Additionally, include a copy of the corresponding invoice. The email should include the quantity, SKUs, and gross dollar amount for the units relevant to the dispute, as well as the details of units received versus not received.  

Kohl’s reserves the right to charge its vendors handling fees for: 

• Sending duplicate invoices 

• Failure to follow the EDI invoice mapping requirements 

• Discrepancies which hinder Kohl’s invoice processing 

• Requesting documentation which Kohl’s has previously provided 

Related Reading: Ultimate Glossary of EDI Terms 

How to Contact Kohl’s 

All inquiries regarding domestic merchandise should sent to the corresponding email address in the table below: 

For vendor names that begin with a number instead of a letter, use the corresponding email address if the number were spelled out alphabetically. For example, if a vendor’s name was 365 Days, then the number in that name would be spelled out as “Three Hundred and Sixty-Five Days,” and therefore any inquiries should be sent to AP_Merch_Vendor_T@kohls.com. 

Paper checks and physical correspondence should be mailed to Kohl’s corporate address, here: 

Kohl’s, Inc.  
c/o Bank Reconciliation  
N56 W17000 Ridgewood Drive  
Menomonee Falls, WI 53051 

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The supply chain is complicated, and things don’t always go as planned. When retailer fines and deductions start eating into your profits, SupplyPike is here to help. Our platform streamlines the recovery process, helping you identify and reclaim lost revenue so you can refocus on growing your business.