Deduction type
Post-audit deductions
Charges raised by an auditor reviewing past invoices — often months after the transaction. Recoverable when the audit's claim is wrong, undocumented, or falls outside the dispute window.
Mihir Naik · Founder, OverDeduct — deduction recovery for emerging & mid-market CPG brands
Last reviewed: August 4, 2026
Educational content — not legal, tax, or accounting advice. Verify deadlines and fee details against your current distributor agreement before disputing.
A post-audit deduction is a charge raised by a second-party auditor (or the buyer's audit team) reviewing your historical invoices and trade programs — usually for pricing, promotional, or allowance discrepancies. Because the review looks backward, these deductions can surface months or even a year after the original transaction, well outside a normal month-to-month reconciliation cycle.
Post-audit deductions are often overreaching, and they're among the more defensible to push back on. An auditor's claim still has to be backed by an actual authorization: a signed deal, a cost sheet, a promotion program with dates and SKUs. If the auditor has extrapolated a rate across periods or SKUs it can't document, the deduction is contestable.
The catch is timing: the dispute window for a post-audit charge can be tighter than the window for the original transaction, and the paperwork may be old. Keeping deal sheets, POs and signed promotions archived and retrievable is what lets you respond to a post-audit claim at all.
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Frequently asked questions
What is a post-audit deduction?
A charge raised by a second-party auditor reviewing your historical invoices and trade programs — usually for pricing, promotional or allowance discrepancies, and often months after the original transaction.
Are post-audit deductions disputable?
Often yes. The auditor's claim still needs an actual authorization — a signed deal, cost sheet, or program with dates and SKUs. Claims extrapolated across periods or products the auditor can't document are contestable.
Why is it hard to dispute a post-audit deduction?
Because it surfaces months after the transaction, when the dispute window may be tighter and the paperwork is old. Archived deal sheets, POs and signed promotions are what let you respond at all.
Other deduction types
- Shortage deductionsA charge for units the buyer says it didn't receive against your invoice — one of the most recoverable deduction types because it turns on delivery documentation.
- Manufacturer chargebacks (MCB)A promotional discount a distributor gives a retailer and bills back to the manufacturer — often with a processing fee on top.
- Pricing & deal discrepanciesShort-pays where the buyer paid a different price than invoiced, or applied a deal you didn't agree to — among the most recoverable deduction types.
- Fill-rate / service-level penaltiesA penalty for shipping fewer units than were ordered — distinct from a shortage at receiving, and typically a percentage of the shorted value.
- Co-op advertising (co-op) deductionsA deduction taken to recover advertising or marketing spend the buyer claims to have run on your behalf — recoverable when the spend wasn't approved, documented, or was billed twice.
- Returns / RTV deductionsA deduction for product the buyer returned — unsold, damaged, or non-conforming. Usually legitimate; recoverable mainly when the return wasn't authorized or was double-counted.
- Duplicate deductionsThe same deduction taken more than once — on one invoice, across invoices, or as both a chargeback and a short-pay. Highly recoverable because it's a pure paperwork error.
- Unearned / unauthorized cash discount deductionsA prompt-payment (terms) discount the buyer took without actually earning it — paying late but still deducting the discount, or taking a rate it wasn't entitled to. Among the most recoverable deductions.
- Promotional billback / scan-down deductionsDeductions that recover promotional discounts — billbacks, scan-downs, off-invoice and temporary price reductions. Recoverable when unauthorized, mis-keyed to the wrong dates or SKUs, or billed more than once.
- Slotting / new-item / free-fill deductionsFees charged to place a new item — slotting, new-item, placement, and free-fill (free initial cases). Often contractual, but recoverable when duplicated, charged beyond the agreement, or taken for items never stocked.
- Spoilage / swell / unsaleables deductionsDeductions for damaged, expired, or unsellable product — spoilage, swell, and unsaleables. Usually valid within an agreed allowance; recoverable when they exceed the allowance, aren't documented, or are duplicated.
- Freight / backhaul / detention deductionsShipping-related deductions — backhaul allowances, detention, lumper fees, fuel, and freight-audit charges. Recoverable when applied on the wrong freight terms, at the wrong rate, or duplicated.