The Supply Side: SupplyPike technology aims to fight invoice deductions

Fayetteville-based SupplyPike continues to provide technology for suppliers and manufacturers who do business with Walmart, allowing them to work out their invoice deduction disputes and other chargebacks in-house.

Eric Smith, a product owner at SupplyPike, said the startup launched its Deductions Navigator technology after visiting with suppliers of all sizes over the past three years. Smith said suppliers wanted technology solutions to help them manage problems in-house with less labor and without the added expense of outsourcing. He said the main goal with the Deductions Navigator system was to streamline the process of tracking invoice payments and quickly disputing chargebacks and other deductions from retail customers like Walmart that can reduce profits for the seller.

“Invoice deductions are a universal pain for retail suppliers, and that was the No. 1 issue they wanted to see automated given the tedious and time-consuming process of building cases for disputing the deduction claims. Either they were struggling to handle it manually in-house or hiring a third-party,” Smith said.

He said third-party firms who do this kind of work often take a percentage of the funds recovered. Boyd Evert, president of Harvest Revenue Group in Bentonville, has told the Northwest Arkansas Business Journal that retailers gain more than $1 billion annually from deduction chargebacks on invoices from suppliers and manufacturers. Harvest Revenue Group also works on behalf of suppliers facing substantial deductions and audit claims.

Smith said SupplyPike’s Deduction Navigator technology platform is an alternative way suppliers can manage that part of the business in-house. He said automating some of the processes traditionally handled manually and organizing data so that it aggregates all types of documents helps disprove deductions directly with the retailer.

“It’s a self-service program, and the response from the marketplace has been great. We have seen our customers use the Deductions Navigator and quickly garner fast results because they can quickly challenge a plethora of small deductions at once that were too cumbersome to work on their own. That makes the immediate return on investment quite high,” he said.

SupplyPike charges an annual subscription, and the low-hanging fruit from older deductions are often easily gathered, claims disputed and payment received promptly, according to the company. Smith said that once the supplier has resolved outstanding deductions, the goal is to get the business on maintenance mode, where one person can manage deductions and keep track of any open claims. He said that in some cases, Walmart approves the challenge and pays the supplier within a week, but it can take months to close out the claim with a manual review.

“We have seen time to resolution range from two to 27 days, depending on the size of the claim and number of other reviews ahead of it,” he said.

Smith said that because of the success some suppliers are seeing with Deductions Navigator with their Walmart business, they have asked for a similar service for their Kroger business.

“We will launch the service for Kroger by the end of November, and we are working on similar solutions for Target,” he said.

Paul Featherstone, a co-founder of Think3Fold, a toy and entertainment supplier, said his firm was spending a lot of money paying staff and third-party firms to stay on top of the accounts payment deductions from its retail customers. He said labor costs fell once the firm began using Deductions Navigator, allowing more team members to focus on other tasks from product management to marketing.

“Now, one of our partners starts the day by logging into Deductions Navigator to see what is happening and what’s happened overnight and see if there is anything we need to act upon. Before this, it was nearly impossible for us to be proactive and see the actions Walmart was taking and actions we needed to take all in one place,” he said. “Now we have one view, and we can easily see what disputes have been approved and what’s still in review.”

Think3Fold got its collectible toy products into Walmart in early 2020 and has continued to grow that business. Featherstone said that before partnering with SupplyPike, Think 3Fold was starting to navigate the Walmart dispute process. Think 3Fold ramped up their deductions dispute win rate by 5,900% using SupplyPike’s Deductions Navigator app in four short months. Featherstone said that using Deductions Navigator can increase its dispute win rate by 60 times.

When it subscribed to SupplyPike in January 2021, the company said that it had more than 1,000 deductions from Walmart, which accounted for a substantial percentage of invoice totals. Trying to dispute the deductions manually was labor-intensive. The manual process caused 90.73% of disputes to be canceled, and a mere 2.71% were approved, the company noted in its case study with SupplyPike. Think3Fold said it has won 92.91% of all its disputed claims since January 2021 and has recuperated 99.57% of monies deducted from invoices.

Smith said SupplyPike began as a technology startup for research and development inside third-party logistics firm CaseStack, which HubGroup acquired in November 2018 for $255 million. CaseStack spun off SupplyPike in 2016 as a standalone technology company to innovate for retail suppliers.

SupplyPike also has technology products for managing shipping fines relating to Walmart’s On-Time, In-Full (OTIF) delivery requirements and the newer supplier quality excellence protocol.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.