Promotional Allowance Proof: Win the Post-Promo Audit
- The HRG Team
- 1 day ago
- 3 min read
Trade promotions are expensive.
And then they get audited.
McKinsey reports that consumer packaged goods (CPG) companies invest about 20% of revenue in trade promotions, and that a large share of promotions fail to generate profit (their article cites research indicating 59% lost money globally and 72% in the United States). So when a promotional allowance is misapplied, duplicated, or “missing documentation” later appears as a deduction… it’s not a rounding error. It’s your margin getting billed twice.
Late February is the danger zone because Q1 is underway, while Q4/January events are being reconciled. This is when post-promo deductions begin to arrive, with vague labels such as “allowance discrepancy” or “documentation correction.”
The real problem isn’t the promotion. It’s the proof.
Most suppliers don’t lose promo disputes because the deal was wrong.
They lose because:
The approval lives in the email
The ad proof lives with the agency
The display execution photo is on someone’s phone
The effective dates changed mid-stream
The retailer’s system tied the allowance to the wrong item number
And suddenly your finance team is doing archaeology.
A fictional scenario (clearly fictional)
Fictional example (not a real company): A beverage brand funds a feature and a temporary price reduction. Sales lift looks great. Six weeks later, a deduction hits for the full allowance amount—coded as “missing off-invoice allowance.” Nothing changed in the real world. The retailer’s system never matched the allowance to the invoice line because the item number mapping was off by one digit.
The promotion worked. The paperwork didn’t.
The “Promotion Evidence Vault” (your best friend in February)
Step 1: Create one home for promotion truth
Call it the Promotion Evidence Vault. Keep it simple:
one folder per retailer
one subfolder per event
one standard naming convention (Retailer_EventDate_SKU)
You’re not building a museum. You’re building retrieval speed.
Step 2: Capture five proof types (every time)
For each event, lock down:
Agreement proof: signed terms, funding approvals, effective dates
Execution proof: ad circular, digital placements, display confirmations
Pricing proof: screenshots, price file approvals, store tags if relevant
Item proof: SKU list, UPC list, pack/ship configuration, item numbers
Reconciliation proof: accruals, billbacks, claims IDs, correspondence
Step 3: Pre-audit yourself in the second half of February
Pick the top 3 events by spend and ask:
Did the allowance apply on the correct invoices?
Did the discount match the agreed rate and dates?
Did the event get funded once (not twice)?
Are any deductions appearing that match an already-paid funding line?
Step 4: Know what “valid but preventable” looks like
Some deductions aren’t disputable because they reflect the agreement—but they still signal a process gap. Supplier education sources note “missing documentation” or misapplied allowances can create deductions that should trigger prevention improvements. Translation: even when you can’t claw it back, you can stop it from recurring.
A quick checklist your team can use tomorrow
One owner for promo proof collection
One vault location (not scattered inboxes)
Event-level SKU/UPC list attached to every promo folder
Effective dates recorded in plain English
Accruals tied to the exact event (not “Q4 promo bucket”)
A weekly scan for duplicates and mismatches
Where HRG fits (lightly)
Promotion audits are where deduction recovery becomes a leadership issue, not an admin task. HRG’s role is often to help teams tighten proof discipline, improve win rates, and reduce the recurring “why are we paying for this again?” moments.
