Hit Me with Your Best Audit…jk please don't

Hey Vendorville,

⬆️ We’re talking to you, post audits 😤

Post audits are probably not the highlight of your year, but they're key for figuring out where revenue is slipping through the cracks. Big retailers have compliance programs that can hit you with painful fines—but they also serve as handy clues for where to start patching things up. ⚒️

Post Audits: The Lowdown 🔏

Retailers (or third-party auditors) review transactions, emails, and agreements to uncover unpaid costs, which can result in hefty fines for suppliers. These audits cover a wide range of supply chain issues, so it's essential to understand all the moving parts.

🚨Common Post Audit Claims

Here are some common post-audit culprits:

Pricing: Pricing post audit claims can occur when an item is price-protected, and all the units were not captured in the Co-Op when it was calculated. Other pricing scenarios may also occur.

Allowances: Examples include cash discounts, defective allowances, and quantity allowances. These allowances are typically off-invoice, not given at the time of invoicing, and come in the form of fines.

Freight & Handling Charges on Returns: If you are a collect supplier, you could see freight and handling charges on returns. The auditors will calculate the cost of delivering the cargo on the damaged product and create an audit to recover the freight charges for the item.

Trucks Ordered Not Used (TONU): TONU is a charge that occurs anytime the supplier doesn’t use a truck, and the retailer or the supplier must reroute the driver. Suppliers may see this claim when they cancel a collect order.

Failure to Combine Loads: Audits for Failure to Combine Loads are typically for a collect supplier that does not properly use the loads, as planned by the retailer. Anytime a purchase order is removed from a truck, the logistics company dispatches a new truck to cover the load.

🧭 Navigating Post Audit Claims

The Claim Packet is your key to understanding the audit. Be sure to carefully review the claim codes, explanations, and auditor contact information. Quick responses are crucial—Walmart, for instance, requires suppliers to respond within just 15 days!

Here’s what the dispute process looks like:

Supplier receives a Claim Packet via email or mail
Supplier contacts auditor directly via information in claim packet
Supplier and Auditor work together to create a solution
Post Audit claim is determined valid or invalid

📃 Keep Those Docs Handy

Having well-organized documents (think shipping records, invoices, and agreements) makes audits way less painful. Solid documentation is your best friend in both internal and external audits, helping you stay one step ahead of any issues.

But wait, there’s more...

If you’d like a deeper understanding of post audits and other accounting essentials, be sure to explore our ✨ new ✨ Accounting Playbook for CPG Suppliers. We wrote this resource to help you navigate key accounting processes with confidence!

In Other Retailer News 🗞️

Retail Dive
Hurricane prep, recovery help drive Q3 growth at Home Depot

“The company is also benefiting from its acquisition earlier this year of SRS Distribution, which is on track to contribute $6.4 billion in sales for the fiscal year.”

SupplierWiki
Home Depot Deduction Types, Remittance List, and Contact Information

“Keeping track of lost revenue at Home Depot requires a thorough knowledge of these identifier codes in order to track and solve larger issues.”

SPS Commerce
RFID: Everything you need to know

“RFID technology can boost efficiency in product receiving at distribution centers, enhance inventory accuracy and track theft.”

Rick’s Tips💡

“As Walmart's extended holiday return policy takes effect, be prepared for a potential increase in return deductions. Most items purchased between October 1, 2024, and December 31, 2024, are eligible for returns until January 31, 2025.

This extension could lead to a rise in returns and related deductions over the coming months, so ensure your team is ready to manage the uptick in reverse logistics smoothly!

Please note: Some items are exceptions (like wireless phones, protection plans, and select luxury goods).”

Let’s Circle Back ⭕

Do you have a favorite Thanksgiving dish? We polled the SupplyPike team to find out our team’s favorites, and here’s what came out on top! ⬇️🏆

It was a very close call in the pumpkin vs. pecan pie showdown! Fair warning: if you try this bracket in your own office, brace yourself for heated debates and passionate dish loyalties!

We couldn't sign off before saying…we're so thankful for you, Vendorville! Your support (and the fact that you open our emails 😉) keeps us going. We couldn't ask for a better community. Wishing you a holiday full of good food and even better company!

Sincerely,

❤️ Your Friends in Vendorville