Find the deduction
Start with the remittance or K-Solve export. Preserve the original line, amount, date, code, and available reference fields. KeHE uses 111 distinct prefix codes, each representing a different billing mechanism.
Cornerstone guide · KeHE operations
KeHE deduction management: the complete operating guide
For CPG operations teams managing KeHE deductions — from first remittance review through dispute resolution and prevention.
The repeatable process of connecting a deduction to its purchase order, cause, evidence, decision, and outcome, then using what happened to reduce preventable recurrence.
The operating loop
From remittance to root cause in six controlled steps.
Connect the PO
Match the line to the retailer-issued purchase order, shipment, invoice, and receiving event. Unmatched items stay in investigation until the connection is established.
Classify the cause
Separate contractual passthroughs from deductions that may be disputable. Do not treat every deduction as recoverable. In one verified audit, 88% of deduction dollars were contractual passthrough.
Assemble evidence
Collect the BOL, POD, packing list, ASN timing, appointment records, photos, emails, and applicable rule context. Evidence must be specific to the PO and deduction, not a general company document.
Choose the action
Verify, dispute, request documentation, escalate, or accept. Record the reason and owner for the next step. Disputes must be filed within 180 days through K-Solve.
Close the loop
Track the outcome and feed recurring causes back into routing, documentation, and fulfillment work. This is where deduction management becomes deduction prevention.
What you will actually see
Four deduction types that show up in every audit.
Each line below shows a real KeHE prefix code, what it means, and what it tells you about the next step. These four codes alone account for the majority of deduction activity in a typical K-Solve export.
SLFPotentially disputable
Service Level Fine
Fill rate dropped below 95% — KeHE assesses 3% of the shortage
If your 3PL pick confirmation and BOL show full quantity, the DC miscount is your evidence. One verified dispute was worth $9,300.
IAInvestigate
Invoice Adjustment
KeHE adjusts the invoice to match what they say was received
IA has four sub-types: product short, missed allowance, supplier return, and price discrepancy. Read the K-Solve backup PDF section headers before classifying.
MCBCheck AAP status
MCB Processing Fee
8% of the promotional allowance, $130/month minimum per DC
If you are enrolled in AAP (Administrative Allowance Program), the MCB processing fee is waived. Check enrollment before disputing.
CSVerify the rate
Customer Spoilage Allowance
A proactive deposit taken automatically on every PO
CS is not event-driven — it is a fixed-rate allowance applied before any spoilage occurs. Verify the rate matches your P&P Terms Form. If it does, it is contractual.
KeHE uses 111 prefix codes total. See all 111 codes in the KeHE Library →
Worked example
One deduction through the full operating loop.
A $514.80 SLF (Service Level Fine) posts on PO-88214. Here is how it moves through the six steps.
1
Find
The K-Solve export shows SLF, $514.80, dated June 15, referencing PO-88214.
2
Connect
PO-88214 was a 200-case order to DC 41 Chino. Invoice was $17,160. Ship window was June 10-12.
3
Classify
SLF = 3% of shortage. KeHE says fill rate was 92% — they received 184 cases, not 200. That is a 16-case short at $32.17/case = $514.80. The math checks out. But is it actually short?
4
Evidence
3PL pick confirmation: 200 cases pulled. BOL signed by carrier: 200 cases loaded. POD signed at DC: 200 cases delivered. Email from DC receiving mentions "pallet was pinwheeled — recount required."
5
Decide
Disputable. KeHE's own carrier handoff records show 200 cases. The DC recount produced the shortage, not the shipment. File through K-Solve with the BOL, pick confirmation, and POD attached.
6
Close
Dispute filed June 22 (7 days after posting, well within 180-day window). Root cause: DC 41 Chino has produced 3 similar recounts this quarter. Escalate the pattern to the Supplier Manager.
Evidence chain
Build the case around the PO, not inside another folder.
Five categories of evidence connect a deduction to its operational context. Each must be specific to the PO and deduction date.
01Order
PO number, order date, ship window, requested delivery date, item and quantity detail
02Shipment
BOL, carrier events, appointment history, POD, pallet or case documentation
03Transaction
Invoice, remittance advice, K-Solve line, deduction code, allowance terms
04Communication
Buyer, broker, 3PL, warehouse, carrier, and KeHE correspondence
05Rule context
Current supplier policy, routing guide, fee schedule, or written agreement
Decision discipline
Three states. Three different next actions.
Contractual
The amount follows an agreed term or documented passthrough.
Verify the calculation, retain the record, and avoid spending dispute capacity without contrary evidence. In a verified audit, $140,914 of $151,671 fell into this category.
Disputable
The charge appears inconsistent with the PO, shipment record, agreement, or applicable rule.
Package the strongest evidence and file through K-Solve within the 180-day deadline. One verified dispute was worth $9,300 recoverable with proper documentation.
Unknown
The line cannot yet be tied to enough context to make a defensible decision.
Request documentation, resolve the PO match, or escalate. Do not guess. The system correctly identifies what it does not know, with FLAG recall improved from 29% to 100%.
Frequently asked
Should every KeHE deduction be disputed?+
No. A sound process distinguishes contractual passthroughs, potentially disputable items, and cases that still lack enough information. In the Sky & Sol audit, $140,914 (88%) was contractual passthrough. Disputing those wastes time and erodes credibility.
How many deduction codes does KeHE use?+
KeHE uses 111 distinct prefix deduction codes. Each represents a different billing mechanism. No public documentation exists for many of them. EasyOps has validated classification rules for 48 of these codes at 100% accuracy.
What should be preserved before a dispute?+
Preserve the original deduction line and connect it to the PO, invoice, remittance, shipment records, communications, and applicable rule context. KeHE expects a real evidence package, not a generic complaint.
Where does K-Solve fit?+
K-Solve is KeHE's supplier-facing deduction and dispute surface. It shows deduction data and is the only accepted channel for filing disputes. It does not replace the operational evidence held across EDI, email, the 3PL, carrier records, and internal decisions.
How does prevention connect to recovery?+
The same evidence used to investigate a deduction can reveal repeatable breakdowns in timing, documentation, routing, or coordination. For example, recurring shortages at a specific DC may indicate a labeling or packing issue that can be fixed upstream. Those causes should feed operating changes.
What is the dispute deadline?+
Disputes must be filed within 180 days of the deduction date. KeHE stopped accepting dispute submissions by email. The K-Solve portal is the only accepted channel.
Evidence boundary: This guide is an operating framework, not a substitute for current KeHE documents or a determination that any specific deduction is recoverable. Always verify current terms, evidence, and deadlines.
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