---
title: "Reason code: definition | Rex glossary"
description: "A standard label given to a deduction or dispute, such as pricing, shortage or damage, that records why the customer didn't pay in full."
canonical: https://www.rex.inc/glossary/reason-code
---

# Reason code

A standard label given to a deduction or dispute, such as pricing, shortage or damage, that records why the customer didn't pay in full.

Customers use their own codes on remittances. AR teams map them to an internal list so each deduction can be routed to the right owner and reported consistently.

Consistent coding is what makes root-cause analysis possible. If most shortage claims come from one warehouse, the fix is in operations, not collections.

## Related terms

- [Deductions management Validating, resolving and recovering the amounts customers withhold from payments, from promotional allowances to shortage and damage claims.](https://www.rex.inc/resources/glossary/deductions-management)
- [Invoice dispute A customer's objection to an invoice, for example to its price, quantity, terms or delivery, that holds up payment until it's resolved.](https://www.rex.inc/glossary/invoice-dispute)
- [Days deductions outstanding (DDO) The average number of days deductions stay open before they're resolved, recovered or written off.](https://www.rex.inc/resources/glossary/days-deductions-outstanding)

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