If you process purchase orders frequently, you already know the frustration: an order comes in, something doesn’t match, and suddenly your team is chasing down the issue instead of moving product. What you may not know is how much that frustration is actually costing you.
According to research published by the Retail Value Chain Federation (RVCF), RVCF Business Process Guide for Item Master Data, approximately 20% of purchase orders require correction due to incorrect or missing product master data. That is not a rounding error. That is 1 in 5 orders generating extra work before they can be fulfilled.
The Numbers Behind the Problem
To understand the real cost, consider a company processing 500 purchase orders per month. At a 20% error rate, that is 100 POs per month that require correction before they can move forward.
The RVCF research breaks down what it takes to fix each one: identifying the issue, contacting the trading partner, determining the correct attribute, updating item or company master data, getting authorization to make the change, resubmitting the order, and reprocessing it. When you account for the staff time across all the departments involved, including Customer Service, Sales, Purchasing, EDI, Merchandise Operations, and Master Data Management, the cost per corrected PO comes to approximately $131.
Run the math:
- 100 POs requiring correction per month
- $131 to fix each one
- $13,100 in monthly correction costs
- $157,200 per year
And that figure does not include chargebacks, unpaid invoices, lost sales, increased returns, or the harder-to-quantify cost of strained trading partner relationships. The $131 per PO is just the labor.
Whether you are processing 500 POs or 50,000, the cost per correction stays the same. The scale changes. The problem does not.
Where the Problem Starts
Bad product data usually starts with a process problem that both sides of a trading relationship have learned to work around rather than fix.
Retailers and suppliers often maintain their own separate versions of item data. When those versions fall out of sync, even minor discrepancies in pricing, product attributes, or location data can trigger a PO correction. There is no single source of truth. Each side assumes the other has the right information until an order fails and proves otherwise.
The problem is made worse by how that data is exchanged in the first place. Many retailers and suppliers are still uploading product data manually, using spreadsheets, email attachments, or direct data entry into systems. Manual processes introduce human error at every step. A field entered incorrectly, a file formatted differently than expected, a version sent before a revision was finalized: any one of these can put a PO into correction territory. When the process is manual, a 20% error rate is not surprising. It is predictable.
A Better Way to Exchange Product Data
Global Product Access gives retailers, suppliers, and manufacturers a shared infrastructure for product data exchange. Instead of each side maintaining its own version and reconciling differences after the fact, trading partners work from synchronized, accurate product content from the start. That means fewer discrepancies, fewer corrections, and less time spent fixing orders that should have been right the first time.
If your team is spending time every month correcting POs, the data tells you what that time is worth. The question is whether you want to keep paying for it. Visit GlobalProductAccess.com to learn more about how to start reducing the additional labor costs associated with PO corrections.
Data source: Retail Value Chain Federation (RVCF), “Costs Associated with Master Data Issues.” Figures in this post are scaled to reflect companies processing 500 purchase orders per month. The RVCF model is based on industry research and discussions with retailers and suppliers; actual costs will vary.