Reading a Remittance Advice
An 820 has three parts that matter for cash application. BPR is the payment: amount, credit or debit, method (ACH, check, wire) and the effective date. TRN is the trace number, the one your bank shows next to the deposit. Each RMR is an invoice with the amount paid, the original amount and any discount, and each ADX is an adjustment with a reason code.
Deductions are where small suppliers lose money quietly. A late ASN, a carton label that did not scan or a short receipt turns into an ADX line weeks later, and most retailers give you a fixed window to dispute it. The evidence is usually already in your EDI: the 856 timestamp, the PO ship window, the quantities shipped. More on the document itself in the EDI 820 guide, on why deductions happen in EDI chargebacks explained, and on each retailer's rules in retailer EDI requirements. If a document was rejected before it ever reached payment, start with the EDI rejection explainer or check the file in the EDI inspector.
Adjustment Reason Codes (X12 426)
X12 defines over 600 adjustment reason codes, and each retailer picks its own subset. The codes below are the core list the Remittance Coalition and ASC X9 published (TR 42) for the deductions suppliers see most, plus a few common in published 820 guides. Your customer's 820 guide is the final word on what a code means for them.
Allowance
| Code | Reason | What it covers |
|---|
| 71 | Advertising allowance | Allowance for advertising funds, including cooperative advertising |
| GH | Billback allowance deduction | Allowance for agreement to bill back the vendor, such as deviated billing or end-user agreement |
| 77 | Competitive allowance | Allowance other than those described, including trade discount, early buy, fixture, in-store, new product or recovery |
| GB | Coupon related | Allowance for redeemed coupons |
| 82 | Defective allowance | Allowance for defective product |
| 95 | Floor stock protection | Allowance for replenishing displays or shelves from stock |
| AF | Guarantee fee | Deduction for agreeing to guarantee a margin or fee |
| RW | Margin contribution | Funding to help the customer reach certain profit margins, including guarantees |
| RX | Mark down allowance | Allowance for markdown funds |
| GC | Market development fund deduction | Allowance for market development funds |
| A3 | New store allowance | Allowance for new stores |
| A8 | Promotional allowance | Allowance for promoting the merchandise, including flyers, new product and trade shows |
| GE | Slotting charge | Allowance for allocating shelf space to product |
| C6 | Testing charge | Pass-through of third-party quality testing by the customer |
| MJ | Truckload allowance | Discount for taking a full truckload of product |
| GG | Unsalable merchandise | Also called swell allowance: for products that cannot be returned; the customer may destroy them in the field |
| MK | Warehouse allowance | Allowance for a customer warehouse (for example a new warehouse) |
Billing
| Code | Reason | What it covers |
|---|
| CM | Covered by credit memo | Deduction covered by an existing credit memo, including overpayment |
| E2 | Covered by debit memo | Deduction covered by an agreed debit, such as payment of a previously disputed invoice |
| 81 | Credit as agreed | Deduction covered by an agreed credit |
| L2 | Discount | Billing discount, including anticipation, cash discount, missing discount and terms of sale error |
| 19 | Duplicate billing | The vendor submitted a duplicate invoice |
| 86 | Duplicate payment | Duplicate payment |
| 90 | Early payment allowance | Discount for early payment |
| 83 | Evaluated receipt settlement (ERS) delivery charge | Payment based on goods received, without an invoice |
| IA | Invoice amount does not match account analysis | Error in the vendor's invoice, including duplicate shipment, cancelled invoice or cancelled order |
| PT | Payment | Deduction associated with payment, including interest, overpayment, on-account or partial payment, settlement, processing charge |
| 75 | Total order not received | The entire order billed was not received (full invoice shortage) |
| 09 | Terms of sale error | |
| 52 | Credit for previous overpayment | |
| 53 | Remittance for previous underpayment | |
| 55 | Tax deducted | |
Freight
| Code | Reason | What it covers |
|---|
| MB | Pickup allowance | Freight charge for the empty truck to return after delivery (backhaul) |
| SF | Shipping and freight charge | Freight charges, including freight allowance, incorrect delivery charge, freight on backorder |
| 21 | Shipment method of payment incorrect | |
| 30 | Delivery charge incorrect | |
Miscellaneous
| Code | Reason | What it covers |
|---|
| L7 | Miscellaneous deductions | Other deductions not covered by other reason codes |
Non compliance
| Code | Reason | What it covers |
|---|
| 70 | Advance ship notice not received | The ASN (EDI 856) was not received |
| O1 | Bill of lading does not match 856 ASN | The bill of lading and the 856 ASN do not contain the same information |
| 97 | Handling charge | Handling charges for errors and noncompliance, including late ASN, unreadable ASN, shortages |
| BI | Hanger charge | Violations related to hangers |
| 07 | Incorrect product | Merchandise received differs from what was said to have shipped or was invoiced (substitution) |
| 59 | Item not received | Merchandise ordered, shipped or invoiced was not received (shortage) |
| RV | Label placement | Incorrect placement of the label on the carton |
| 99 | Late shipment of goods | Shipment late according to the customer's requirements |
| FY | Logistics label: incorrect label format | Inaccurate labels, including wrong or missing PO or product ID, not human readable, crushed label |
| GP | Logistics label: label does not scan | The barcode cannot be read by a scanner |
| S3 | Not shipped on date authorized | Shipment early or late according to the customer's requirements |
| A5 | Overage | More merchandise received than ordered or said to have shipped |
| GX | Packing: problem with pack list | Packing list errors or missing packing list |
| A6 | Packing violations | Packaging errors and violations, including failure to master pack, incorrect assortment, inaccurate cubing |
| 10 | Pallet/container charge error | Errors or charges associated with pallets or containers |
| KE | Paper bill of lading non-standard VICS format | Bill of lading errors, including incorrect weight, missing PO or department number |
| MG | Purchase order number incorrect on invoice | Multiple, missing or incorrect PO numbers on the invoice |
| 06 | Quantity contested | Quantity received differs from quantity shipped or invoiced (shortage) |
| RD | Receiving discrepancy | Goods received differ from what was expected |
| 44 | Required documents missing | Packing slip, BOL, POD or other documents missing |
| B8 | Routing violation | Routing not compliant with the customer's routing guide, including failure to consolidate, missing or late 204, incorrect carrier |
| EU | Ship notice: carton content does not match ASN | ASN carton count or contents do not match goods received, or the SSCC does not match |
| F2 | Ship notice: received late | The ASN (EDI 856) arrived late, for example after the shipment was received |
| C8 | Ticketing error | Missing or inaccurate tickets, wrong placement, tickets not attached |
| TI | Transportation issue | Carrier detained, missed delivery appointment, volume or weight break |
Post audit
| Code | Reason | What it covers |
|---|
| L1 | Post audit | Deductions taken a year or more after shipment |
Pricing
| Code | Reason | What it covers |
|---|
| Q6 | Contract price error | Pricing discrepancy related to a contract, including surcharge, mark-up, volume discount, price change |
| 03 | Extension error | Pricing discrepancy from inaccurate invoice calculations |
| E5 | Invoice price protection | Pricing discrepancy related to price protection |
| 01 | Pricing error | Pricing discrepancy not related to a contract, price protection or volume discount |
| D5 | Volume discount | Pricing discrepancy related to a volume discount |
Rebates
| Code | Reason | What it covers |
|---|
| B2 | Rebate | Rebate |
Returns
| Code | Reason | What it covers |
|---|
| RG | Difference on returns | Difference between the quantity or price of goods returned and the deduction taken |
| K8 | Freight inbound return merchandise | Inbound freight associated with returns |
| K9 | Freight outbound return merchandise | Outbound freight associated with returns |
| 04 | Item not accepted: damaged | Merchandise refused because of damage |
| 05 | Item not accepted: quality | Merchandise refused because of quality issues |
| K4 | Return merchandise charge | Customer charges for returns or refusals (for example handling fees), excluding freight |
| RM | Returned material | Merchandise returned for reasons other than damage or quality, including authorized returns and overstock |
| 11 | Returns: damage | Merchandise returned or destroyed in the field because of damage |
| 14 | Returns: promotion | Merchandise returned under a promotional agreement |
| 12 | Returns: quality | Merchandise returned because of quality issues |
| 15 | Returns: recall | Merchandise returned because of a product recall |
| C4 | Stock balance | Returns authorized to reset inventory levels |
Sources: ASC X9 TR 42 Core Adjustment Reason Codes (Federal Reserve Bank of Minneapolis, Remittance Coalition); UN/EDIFACT D.96A code list 4465, Adjustment reason (Stylus Studio mirror).
