The AR deduction problem
A deduction lands as an unexplained gap between the invoice and the payment. Someone in AR has to open the remittance, find the reason code, decide whether it's valid, and either clear it or fight it. At a handful a week that's a task. At several hundred a month it becomes a backlog, and the backlog is resolved the way backlogs always are: the big items get worked and the rest get written off at quarter end.
That write-off is the leak. It is rarely a decision anyone consciously made.
What deduction management software should do
- Capture — pull deductions off EDI 812/820 remittances, portal exports and bank files without manual keying.
- Code — normalise every retailer's reason codes into one taxonomy so the numbers are comparable across accounts.
- Match — link each deduction to the invoice, the PO and the shipment it came from.
- Resolve — assemble the backup, file the dispute, and track it to a credit or a deliberate write-off.
- Report — show deduction rate by retailer and reason so operations can fix the causes upstream.
Automation versus a bigger AR team
Hiring solves throughput linearly and knowledge poorly. The economics of a €140 compliance chargeback don't change with headcount — twenty minutes of a person's time still costs more than the claim is worth, so those claims still get dropped. Automation changes the unit cost of a dispute, which is the only thing that makes the long tail worth fighting at all.
Where Klaimback fits
Klaimback is deduction management for EMEA fashion and footwear wholesale specifically: Zalando, Otto, Breuninger, ASOS. We don't sell you a licence and leave you the portal work — we run the disputes, a human reviews every one before filing, and you get a monthly statement your auditor can read. €2,000 a month plus 20% of what we recover. See how the software works.
Frequently asked
What is deduction management software?
Deduction management software automates how an accounts receivable team handles short-paid invoices: it captures deductions from remittances and portals, codes them by reason, matches them to invoices and shipments, and drives each one to a dispute or a documented write-off.
What is AR deduction management?
AR deduction management is the accounts receivable process of investigating and resolving customer deductions — the gap between what was invoiced and what was paid — so that unapplied cash is cleared and invalid claims are recovered.
Is deduction management software worth it for a mid-market brand?
It depends on volume. Below roughly €10M of wholesale revenue the deduction count is usually small enough to work by hand. Above it, the sub-€200 claims start timing out faster than a team can fight them, and that tail is where the recoverable money sits.
Want us to recover it for you?
Send one export of your retailer deductions and we'll tell you — free — how much of it is winnable. €2,000/month plus 20% of what we actually recover.
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Retail chargeback & deduction management software
Retail chargeback and deduction management software that disputes retailer deductions automatically and recovers your money. Built for EMEA fashion wholesale brands.
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