STAT lays out a scorecard for deduction management vendors

STAT Recovery Services has published criteria for CPG suppliers evaluating deduction management vendors and argues that recovery management captures revenue deduction tools miss. The company says its audit approach can uncover losses that never become formal claims across major retailers.

Why it matters: - CPG suppliers are spending on deduction management tools, but many revenue losses never turn into deductions or claims. - STAT says a narrower focus can leave pricing errors, overpaid allowances, EDI issues, post-audit findings and other leakage unaddressed. - The debate affects how suppliers choose vendors and what kind of recovery they should expect.

What happened: - STAT Recovery Services published a framework for evaluating deduction management vendors. - The Bentonville, Arkansas-based company framed the piece around a broader category it calls recovery management. - STAT said deduction management handles claims a retailer has already filed, while recovery management audits a supplier's full purchase order history for missed revenue. - CEO Mark Schwartz said clients hire STAT because much revenue leakage never appears as a deduction in the first place.

The details: - STAT's five evaluation criteria are transaction-level visibility, root-cause analysis, one view across every retailer, performance-based fees and human expertise behind the technology. - Transaction-level visibility means showing detail behind each deduction, not only a dashboard total. - Root-cause analysis means identifying why claims recur, rather than only disputing them. - One view across retailers is meant to reduce silos across Amazon, Target and Walmart. - Performance-based fees align vendor compensation with recovered funds. - STAT says software and AI still benefit from CPA- and CFA-level financial review. - The company says its platform audits up to 24 months of purchase orders across major retailers using a proprietary AI engine and a CFA- and CPA-led audit team. - STAT says clients recover on average 50% more than deduction management software alone typically identifies, based on internal client data. - The company offers a complimentary two-year historic audit with no upfront fees and no ERP integration required. - The audit covers 24 months of Amazon, Target and Walmart transactions. - STAT says it has recovered more than $1 billion for retail suppliers.

Between the lines: - STAT is positioning itself against deduction management vendors while arguing that the category itself may be too narrow. - The message is that strong deduction handling is useful, but not enough if suppliers want to find losses before they become claims. - The framework also functions as a sales pitch for a broader audit-led service model.

What's next: - Suppliers can use STAT's framework to compare vendors against their own transaction history. - STAT is offering its historic audit as the next step for companies that want to test whether their leakage is showing up in deductions or staying hidden. - The company continues to push recovery management as the higher standard for vendor selection.

The bottom line: - STAT's pitch is simple: deduction management can help recover known claims, but recovery management is built to find the revenue suppliers never knew they lost.