Margin Mirage: How ‘Approved’ Deductions Still Cost You

At first glance, everything looked clean.

The brand’s finance team had reviewed the retailer deductions. All marked as valid. No disputes filed. Done and dusted.

But here’s the problem: “approved” doesn’t always mean “accurate.”

In reality, many deductions that pass internal review still contain overcharges, misapplied discounts, or duplicated claims. They're quietly draining your margin—even though your team gave them the green light.

Let’s look at a fictional case. A mid-sized beverage supplier trusted its internal approval process. The AP team was fast, efficient, and thorough… or so they thought. A year later, a third-party audit uncovered more than $175,000 in “approved” deductions that were either miscalculated or incorrectly applied to the wrong promotions. No bad actors. Just bad assumptions.

The truth? Deductions can look right on paper—and still be wrong. Especially when approval is rushed, data is incomplete, or the retailer’s logic isn’t fully understood.

Retailers don’t lose sleep over whether a deduction was taken in error. But if you don’t challenge it? You’re the one paying for it.

Punchline: Validation isn’t the finish line. It’s the starting point for recovery.

Think your approved deductions are accurate? Let HRG double-check. You might be sitting on a six-figure surprise.

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