KeHE deductions come in many forms. Some are pre-agreed allowances or fees that are essentially the cost of doing business (often considered “mandatory”), while others are situational or avoidable chargebacks that you’ll want to minimize (these are more “discretionary” or even erroneous). Here’s an overview of the most common deduction types you’ll encounter:

Shortage Deductions (Short Ships & Damages)

One frequent deduction is for shortages, which occur when the distributor claims it received less product than invoiced (short ship) or some goods arrived damaged. KeHE’s receiving department will file an Unloading Discrepancy Report (UDR) whenever there’s a quantity discrepancy on delivery. For example, if you invoiced for 100 units but their warehouse counted only 90 in good condition, KeHE will deduct the value of those 10 missing units from your payment. These UDR-related deductions cover shortages, overages, or damages, and you typically have 48 hours to respond to a UDR with proof (like a signed bill of lading and packing slip) before the deduction becomes final.

Real-world scenario: You ship 50 cases to a KeHE distribution center, but they log only 48 received. This triggers a $500 shortage deduction on your next check. If you have the receiver-signed delivery paperwork showing all 50 were delivered intact, you should dispute this via K-Solve (more on that soon) to recover your $500. Acting quickly is key – respond to any UDR notices promptly to resolve discrepancies before they turn into lost dollars.

Pricing Discrepancies

Pricing deductions happen when there’s a mismatch between the price on your invoice and the price KeHE believes it should pay (as per the purchase order or your agreed terms). For instance, if you raised your wholesale price but didn’t update KeHE’s system, or if a promotional price wasn’t correctly applied, KeHE will short the invoice and take a deduction for the difference. This means, you might invoice an item at $12 each, but KeHE’s PO reflects $11 – they’ll deduct that $1 per unit across the order.

These discrepancies often arise from communication gaps or data entry errors – a new price list not fully communicated, incorrect pack size info, or an expired deal still on file. The best immediate action is to flag the issue to KeHE’s team. KeHE provides a Purchase Order Opportunity form specifically for pricing or pack-size issues; you can fill it out and email it to Vendor Support (copying your supply planner) to get the error corrected . This may prevent future incorrect deductions.

Real-world scenario: Your brand offered a promotional discount last quarter that brought the case price down to $20, but this quarter it should be back to $24. If KeHE accidentally continues to deduct the promo and only pays $20, that $4 per case difference is a pricing discrepancy deduction. By running a quick pricing audit on KeHE Connect or noticing the short-paid amount on the remittance, you can catch it and dispute it. In this case, you’d provide documentation of the agreed promo period and ask for the $4/unit to be reimbursed. The PO Opportunity process or a K-Solve dispute (with the PO and invoice details attached) can resolve such issues.

Compliance Chargebacks (Labeling, ASN, Late Delivery)

Compliance chargebacks are penalties for not meeting KeHE’s supply chain requirements. KeHE, like other big distributors, has detailed vendor guidelines – if you miss any of them, a fee may be deducted. These can include:

• Labeling or Packaging Issues: For example, missing case labels, incorrect barcodes, not meeting shelf-life requirements, or improper pallet configuration. KeHE might fine you for manual re-labeling or handling required on their end.
  
  

• ASN (Advance Shipment Notice) Non-Compliance: KeHE expects an electronic ASN for each shipment. If you don’t send one or it’s late/incorrect, you could see a chargeback for the inconvenience caused.
  
  

• Late or Missed Delivery Appointments: If your truck arrives outside the scheduled window or you reschedule last-minute, KeHE may levy a late delivery fee.
  
  

• Other Vendor Guideline Violations: Using the wrong carrier, not following routing guides, missing paperwork, etc.
  
  

These compliance deductions are essentially fines for extra work or lost efficiency on KeHE’s side. For instance, failing to include a packing slip might result in a $100 charge; showing up without a pallet sticker might cost you $250, and missing an ASN could be a few hundred dollars. The exact fees are usually outlined in KeHE’s supplier policy documentation. Always review those requirements and implement internal checklists to avoid infractions.

If you do get hit with a compliance chargeback that you believe is unwarranted (say, you did send the ASN on time, or the label was actually per spec), gather any evidence (emails, timestamped EDI logs, photos of the shipment) and prepare to dispute it. Unauthorized or erroneous chargebacks can and should be challenged – we’ll cover how in the K-Solve section. But if the mistake was on your end, it’s often best to accept the deduction as a learning experience and tighten your processes (since disputing a valid chargeback likely won’t succeed).

Promotional Deduction Discrepancies

When you participate in KeHE’s promotional programs, expect deductions that correspond to those deals. Common ones include: manufacturer chargebacks (MCBs), scans, ads, demos, “free fills”, and other promotional allowances. These are usually agreed in advance – for example, you might agree to a 15% off-invoice discount for a quarter, or to fund a BOGO retailer promotion via KeHE. KeHE will then deduct the cost of those promotions from your checks. The tricky part is ensuring the deduction amount matches what you agreed to.

Two things often catch brands by surprise: admin fees and timing. KeHE charges an 8% administrative fee on MCB promotions, with a minimum $65 per distribution center. If you ran a $1,000 discount via MCB, there will be an extra $80 fee (8%) deducted as well. KeHE also charges an Event Promotion (EP) fee of 8% on scans, ads, demos, etc., capped at $500 per invoice – essentially a fee to cover their cost of running those promo events. It’s important to factor in these fees so you’re not caught off guard.

Promotional deductions can become discrepancies if they’re higher than planned or taken in error. Perhaps KeHE deducted a promotion twice, or applied an off-invoice discount to the wrong product, or continued a deal beyond its end date. These should be disputed or clarified. Always cross-check the deduction codes and amounts against your promotional calendar and agreements. KeHE Connect’s reporting can help match promo deductions to specific promotions. If something doesn’t line up – say, a “New @ KeHE” launch allowance taken on a product that wasn’t in that program – you have grounds to challenge it.

Real-world scenario: You agreed to fund a 10% off promotion for January and February. In March, you notice KeHE is still deducting 10% on that product’s invoices – an unauthorized deduction since the promo ended. You would gather the promotion approval (showing it ended in Feb) and submit a dispute to get March’s 10% back. Keeping a close eye on timing ensures these types of errors don’t slip through.

Unauthorized or Unknown Deductions

Occasionally, you might spot a deduction on your remittance that doesn’t seem to fit any known category. It could be a random $200 fee with a code you’ve never seen, or a charge labeled in a cryptic way. These unauthorized deductions are those you didn’t agree to and can’t easily identify – basically potential mistakes or invalid charges. They can occur due to billing errors, misapplied charges meant for another vendor, or new fees that you weren’t informed of.

Treat any unrecognized deduction as guilty until proven innocent. It’s up to you to investigate and contest it; otherwise, you’re simply out that money. Start by looking up the deduction code in KeHE’s documentation or asking your KeHE Vendor Support contact for an explanation. If it truly wasn’t authorized (for example, a “new item setup fee” charged on an item that’s been in the catalog for a year, or a duplicate deduction that hit twice), then prepare a dispute through K-Solve.

Staying organized will help here. Some brands maintain a spreadsheet of all expected, contractually agreed deductions (like the 2% early pay, any ongoing allowances, promo fees, etc.) and then flag anything not on the list. Better yet, modern software can do this automatically – Intercept, for instance, will ingest all your KeHE fees from portals and emails, flagging those that look invalid so you can dispute them. Catching unauthorized deductions and quickly challenging them can easily save you thousands of dollars that might otherwise be left on the table.

Identifying Deductions in KeHE Connect and K-Solve

How do you actually find and interpret these deductions? KeHE provides an online portal called KeHE Connect Supplier (usually just “KeHE Connect”) which is your one-stop shop as a supplier. This portal is where you can see purchase orders, confirm shipments, review sales reports, and crucially, check your payment remittances and deductions. Within KeHE Connect, there are sections for Financial Spend & Performance and even a dedicated K-Solve: Deductions area. Here’s how to navigate and understand the info:

• Login to KeHE Connect: Make sure you have your supplier account set up on connectsupplier.kehe.com (Google Chrome is recommended for this portal). Once logged in, navigate to K-Solve.” KeHE’s interface may list each payment (check or ACH) along with an attached remittance report breaking down all deductions taken.

• Review the Remittance Detail: For each payment, open the detail to see line items of deductions. Each deduction line should have a code or label, a brief description, and an amount. Common KeHE deduction codes/labels you might see include:

  • MCB – Manufacturer Chargeback (promo discount given to retailers)

  • MCB Fee – The 8% admin fee on the above (sometimes combined with MCB line)

  • EP Fee – Event promotion fee (e.g. for scans/demos, 8% up to $500)

  • Freight – Freight allowance (if KeHE arranged shipping, e.g. $0.30 per lb)

  • 2%10 Net30 – Early payment discount (2% taken for quick pay)

  • Spoilage/Unsaleables – a spoilage allowance or unsaleables fee (often a small % for damaged/expired goods)

  • Connect BI Fee – 2% fee for access to KeHE’s business intelligence portal (if you subscribe)

  • UDR – Unloading Discrepancy (shortage/overage/damage claim)

  • Promo/Deal – Any off-invoice promotional discounts (15% intro allowance, etc.)

  • Unauthorized – (It may not literally say “unauthorized,” but any code you don’t recognize or that isn’t part of your plan falls here.)

• Each code corresponds to a specific reason. Mandatory deductions like early pay discounts or freight allowances are typically expected and agreed upon (you wouldn’t dispute those, but you need to account for them in your margins). Discretionary deductions like UDR shortages, chargebacks, and promo fees should be scrutinized – check that they match actual issues or approved promotions. If a deduction code meaning isn’t clear, consult KeHE’s supplier documentation or reach out to Vendor Support for clarification.

• Use KeHE Connect Reports: KeHE Connect may allow you to export deduction reports or run queries for a given time period. For example, you might run a report of all deductions by type for the last quarter to see the total impact of, say, “MCB” or “Shortage” deductions on your business. This can help pinpoint where most of your dollars are going. If the portal has a “Deduction Detail” or “Spend Performance” dashboard, take advantage of it to identify trends (e.g., one DC consistently logging shortages). Being data-driven will help you prioritize what to tackle.

• Introducing K-Solve: K-Solve is KeHE’s built-in deductions dispute system. It’s accessed through KeHE Connect. Think of K-Solve as the ticketing portal where you submit disputes and track their status. In K-Solve, you’ll use the information from your remittance (deduction code, amount, invoice number, etc.) to file a claim. We’ll cover the exact steps in the next section. The important thing here is to know where to find K-Solve (within Connect) and that every deduction you might dispute will need to be identified in the portal first.

• Discretionary vs. Mandatory Deductions: As you review deductions in Connect, mentally separate them into two buckets:

  • Mandatory/Planned: These are per your contract or program participation – things like the early pay 2%, fixed new item fees, agreed promo allowances, freight, etc. You likely can’t avoid these (except by opting out of programs entirely), so you won’t be disputing them unless there’s an outright mistake. Ensure you’ve budgeted for them.

  • Discretionary/Unplanned: These include anything performance-related or error-based – shortages, chargebacks, unauthorized fees. Not all of these deductions are valid; many are erroneously charged to brands and it’s up to you to contest them. This is where you focus your recovery efforts. For each of these, decide: is it legitimate (if yes, fix the root cause) or is it disputable? If disputable, get your documentation in order and use K-Solve to fight it.

Identifying deductions can be time-consuming, especially if you sell through multiple distributors and retailers. It involves logging into portals, downloading reports, cross-referencing codes… a lot of manual work. That’s exactly why many brands now leverage automation tools like Intercept. Intercept can automatically ingest all of your deduction data from KeHE’s portal, categorize each deduction by type, and flag the ones that look invalid. Instead of manually combing through Connect, you’d see a dashboard of, for example, total “Shortage” deductions this month, with ones that have supporting POD documents flagged as “potentially recoverable.” This kind of AI-driven overview can save you tons of time and ensure nothing slips through the cracks.