Invalid deduction
A deduction the customer isn't entitled to under the agreement, such as a duplicate claim, an expired discount or a penalty for something that didn't happen.
Invalid deductions are recoverable revenue, but only if someone proves they're invalid, with documentation, inside the customer's dispute window.
Because each one is often small, they're easy to write off. Tracking them by reason and customer shows which are worth contesting and which problems to fix at the source.
Related terms
- Deductions managementValidating, resolving and recovering the amounts customers withhold from payments, from promotional allowances to shortage and damage claims.
- Reason codeA standard label given to a deduction or dispute, such as pricing, shortage or damage, that records why the customer didn't pay in full.
- Write-offRemoving an invoice balance from accounts receivable because it won't be collected, charging it to bad debt expense or the allowance for doubtful accounts.
- Debit memoA document that increases what a customer owes after the original invoice, for example to correct an undercharge or add a fee.