Cutting Business Paperwork Losses a Long but Winnable Road

As Sam Walton built Walmart into a retail giant, one of his guiding principles was ensuring that the books between retailers and suppliers were accurate.

Pay for what you should, avoid paying for what you shouldn't, and reinvest the savings into growth and sales.

That principle remains as relevant as ever.

But today, the complexity of global supply chains, shifting trade policies, and rising tariffs make accuracy much harder to achieve.

According to a recent Deloitte survey, 62% of supply chain leaders cited compliance and dispute resolution as major challenges, with revenue leakage from errors, deductions, and missed claims costing companies billions annually.

"Suppliers are under constant pressure to remain compliant while also navigating cost inflation, tariff-driven price swings, and increasingly fragmented supply chains," said business strategist Scott Benedict, a former Walmart executive.

"Recovering lost revenue has become not only a matter of profitability but survival."

Industry analysts note that many businesses — especially small and midsize suppliers — further lack the resources to monitor complex retailer contracts, shipping damage allowances, or inventory disputes.

A McKinsey report estimates that poor compliance management and deduction errors can reduce supplier revenues by 1% to 2% annually, enough to erase profit margins in competitive markets.

Dallas Counts, a former Walmart executive and now an investor and chief operating officer at Vendormint, has seen the challenge up close.

"At Walmart, we often asked merchants to reinvest — whether in retail media, price rollbacks, or new product categories.

"But if payments or deductions weren't reconciled quickly, those merchants didn't always have the liquid funds to make those investments," Counts said.

"That disconnect can harm both retailers and suppliers."

Counts added that many smaller companies underestimate how different each retailer's processes are when it comes to returns, damages, or dispute timelines.

"One size does not fit all. If a shipper has a 2% damage allowance but 4% of goods arrive damaged, that can eat away at already thin margins.

"And if disputes are filed late, even valid ones, they may never be recovered."

Max Borin, Vendormint's co-founder and CEO, experienced the problem firsthand as a seller on Amazon.com, where he found inventory tied up in fulfillment centers and deductions he could not easily reconcile.

After solving those issues for his own business, he recognized that thousands of sellers faced similar barriers — an insight that helped shape the company's focus on compliance and revenue recovery.

The stakes are significant.

For example, if a contract allows a 2% damage rate but 4% of goods arrive damaged, the supplier often bears the excess cost; claims filed outside of strict retailer timelines may be denied outright; and today, tariff-related miscalculations in inventory sourcing can leave suppliers with stranded goods or uncompetitive pricing.

Such errors compound quickly — According to the National Association of Manufacturers (NAM), U.S. manufacturers already lose an estimated $8 billion annually due to tariff-related supply chain inefficiencies.

Retailers are also shifting their focus beyond product margins.

Membership programs, retail media networks, and data services are generating billions in new revenue streams.

Walmart's $2.3 billion acquisition of Vizio in 2024, for instance, is expected to expand its connected-TV advertising reach to more than 18 million households.

Amazon.com's advertising revenue exceeded $47 billion in 2023, rivaling traditional media companies.

While these changes create opportunities, they also introduce new layers of complexity for suppliers expected to co-invest in advertising or adapt to faster fulfillment requirements.

Counts believes that balance is critical, "It's about driving growth while staying compliant. Expanding too fast without proper systems in place can leave businesses vulnerable. Diversifying across multiple retailers and suppliers gives companies the flexibility they need."

Experts broadly agree.

Flexibility allows businesses to better withstand disruptions, whether from tariff shocks, retailer policy shifts, or sudden demand changes.

"Retailers now expect even their smallest suppliers to operate with the sophistication of global conglomerates," Benedict said. "Those who can align compliance, cash flow, and growth strategies will be best positioned to thrive."

In short, the modern supply chain is not just about moving goods — it's about managing the fine print.

Accuracy in paperwork, diligence in compliance, and adaptability in partnerships can make the difference between suppliers who stay profitable and those left behind.

Duggan Flanakin is a senior policy analyst at the Committee For A Constructive Tomorrow who writes on a wide variety of public policy issues. Read Duggan Flanakin's reports — More Here.