Description
The new location allowance is defined by its placement on the purchase order and the supplier agreement.
Off Item Level of Purchase Order: (Defined as SA on Supplier Agreement)
1. Warehouse Merchandise: Allowance covering the initial stocking of a new warehouse
2. Store Level (even those routed through a warehouse): Offered only on orders placed prior to the grand opening date for a new store. Also applied to merchandise pulled by the new store from the warehouse prior to the grand opening date. (Typically between 5% and 10%)
Off Summary Level of Purchase Order: (Defined as OL on Supplier Agreement)
1. Designed to collect a percentage of every order in total and not only merchandise planned for new stores (typically between .1% and .5% or 1% and 5% based on supplier volume)
A code 55 occurs when this allowance is listed on the supplier agreement but not included on an invoice.
Common Root Causes for Code 55s
The common scenario for invalid Code 55s is that your Supplier Agreement states that an allowance is supposed to be given off-invoice, but your EDI provider is giving the allowance off-line-item. In this scenario, the correct dollar amount is being withheld from the invoice, just from the wrong place.
Potential root causes of valid code 55s 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 55s
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 it be Disputed?
Yes, Walmart allows disputes for invalid Code 55s through the Accounts Payable Dispute Portal (APDP) if you can prove that the allowance was actually given on the invoice. Otherwise, you will need to reach out to your buyer for assistance with a payback. While APDP technically allows disputes for code 55s, they can be difficult to win.
The common scenario for invalid code 55s is that your Supplier Agreement states that an allowance is supposed to be given off-invoice, but your EDI provider is actually giving the allowance off-line-item. In this scenario, the correct dollar amount is being withheld from the invoice, just from the wrong place. Disputing with your buyer and showing that the correct amount was already withheld can often overturn the deduction.
How to Dispute Invalid Code 55s
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.