When a buyer believes it owes less than the invoice says, it either raises a claim with the supplier or simply pays less and explains why. Either way, the supplier receives less cash than it billed and has to work out whether the difference is valid.
Common types of supplier deductions include:
- Shortages: fewer units received than invoiced
- Damages and returns
- Pricing differences between the invoice and the agreed price
- Promotional allowances and co-op funding
- Compliance penalties, also called chargebacks
Deductions usually appear on the remittance advice (EDI 820) or as a credit/debit adjustment (EDI 812). Resolving them takes evidence: the purchase order, the acknowledgment, the ASN, proof of delivery and the receipt. When those documents sit in different systems and inboxes, both sides spend weeks reconciling, and valid amounts go unpaid. Many disputes start earlier, with an invoice that never passed the three-way match.