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The European Union Deforestation Regulation (EUDR) introduces strict traceability and data requirements that challenge traditional supply chain practices. Prewave’s Quantity Accounting Module is designed to simplify and automate EUDR compliance by managing Due Diligence Statements (DDS), monitoring quantities in real time and ensuring continuous alignment between supplier data and outbound reporting. This article outlines how the module supports accurate traceability, reduces administrative effort and helps businesses stay compliant with evolving regulatory demands. To read more about EUDR Traceability, please click here.
Addressing core EUDR data challenges
The EUDR brings complex data requirements, especially for creating aggregated DDS across extended timeframes and shipments. While companies may aim to reduce effort by issuing DDS on a quarterly or annual basis, suppliers may only provide the necessary EUDR-relevant data in shorter cycles, such as weekly or monthly. This mismatch requires advanced systems to reconcile reporting frequencies, ensure accurate quantity tracking, and maintain alignment with supplier data. Compliance, therefore, goes far beyond simple record-keeping and demands robust, integrated data management.
Introducing Prewave's Quantity Accounting Module
Prewave's Quantity Accounting Module is a specialized module engineered to empower businesses to effectively address these multifaceted EUDR data challenges. Its core design focuses on proactively gathering information from suppliers, enabling precise tracking of quantities and associated compliance data, and streamlining the overall management of DDS. This capability directly targets the complexities arising from varied reporting cycles and the need for accurate quantity reconciliation. Furthermore, the module is designed to help companies continuously monitor available product quantities to ensure sufficient DDS coverage and compliance with EUDR regulations. By providing these functionalities, Prewave offers a pathway for businesses to transition from manual, error-prone processes to a more proactive, systematic and reliable approach to EUDR compliance.
Key features and customer benefits
The Quantity Accounting Module offers a suite of features, each designed to deliver tangible benefits in terms of EUDR compliance, operational efficiency and risk mitigation. These features work to provide a comprehensive solution for managing the data-intensive aspects of the regulation.
DDS generation and management
This module enables the efficient management of DDS, accommodating varying supplier submission frequencies and enabling operators to generate aggregated DDS. By reducing manual effort and the risk of human error, it ensures consistent, EUDR-compliant DDS generation for both individual shipments and aggregated volumes. Crucially, it helps reconcile differing data timelines between suppliers and operators, allowing for flexible strategies like annual aggregated statements - designed to cut data traffic and bureaucracy - without jeopardizing compliance with requirements such as predefined geodata or producer information.
Real-time quantity monitoring and control
The module continuously tracks incoming supplier quantities and compares them with the coverage provided by existing DDS, using systems like a "traffic light" display to visualize current stock levels, target quantities, and DDS coverage percentages. The module supports any referencing scheme provided by customers (whether on a shipment basis, purchase order (PO) basis, or using generic patterns such as FIFO or LIFO) offering full flexibility to match internal tracking methods. This automation supports EUDR compliance with minimal disruption, simplifies supplier data integration, and enables the adoption of more efficient DDS strategies by maintaining precise, real-time control over quantity flows.
Ensuring continuous DDS coverage and alignment
Designed to prevent gaps between inbound compliance evidence and outbound DDS, the system ensures continuous coverage by managing supplier uploads and generating operator DDS accordingly. It maintains a transparent record of available quantities and validity periods, enabling companies to reconcile declared and actual volumes - especially critical when annual thresholds are unmet and justification is needed. This functionality helps avoid compliance breaches and ensures traceable, EUDR-compliant quantity management across the supply chain.
Granular DDS referencing for end-to-end traceability
The module enables detailed linking between outbound and inbound DDS via product IDs, serial numbers, timestamps, quantities, and PO numbers. This enables a verifiable chain of custody from final product to supplier inputs, supporting stringent separation strategies and precise impact assessment in case of non-compliant DDS. Such granular traceability is essential for proving due diligence and maintaining control over compliance data. However, the module’s effectiveness depends on high-quality input data (accurate supplier DDS, quantities, and geolocations) which underscores the need for strong supplier collaboration and upstream data validation.
Leveraging Prewave for proactive EUDR compliance and risk mitigation
Managing physical separation strategies effectively
The Quantity Accounting Module provides the essential data management backbone required to effectively implement and manage any chosen physical separation strategy, thereby enabling businesses to seamlessly comply with the legal traceability requirements and better control and mitigate the impact of potential negative DDS.
For "No Separation" scenarios: In cases of commingled products (e.g., pile storage of o-rings), the risk of broad contamination from a single negative DDS remains high. However, the module ensures precise quantity accounting and links supplier DDS to maintain the best possible traceability record under such constraints. When traceability relies on mass balance methods like FIFO or LIFO, the module ensures alignment between accounted quantities and DDS coverage.
For "Broad Separation" scenarios: When goods are partially physically separated but still mixed within those units, Prewave’s module plays a critical role. By managing aggregated DDS and tracking quantities based on criteria such as POs, delivery times, or specific volumes, it ensures that partial traceability is accurately maintained digitally. This allows any impact from a negative DDS to be effectively confined to the relevant, broadly separated segment.
For "Stringent Separation" scenarios: In the ideal case of strict physical separation by batch or individual DDS, the module’s granular referencing capabilities are essential. Outbound DDS can be linked to specific inbound DDS via product, serial number, timestamp, quantity, shipments, or PO and thereby creating a detailed audit trail. This level of traceability is crucial for fully complying with legal requirements and proving that a negative DDS affects only the associated batch, enabling "perfect tracing" and effective risk isolation.
Achieving and maintaining sufficient DDS coverage and precise quantity accounting
A core EUDR obligation is the continuous monitoring of product quantities to ensure sufficient DDS coverage for referencing purposes. This is directly supported by Prewave’s Quantity Accounting Module. By offering a detailed DDS flow tracking, the module offers full visibility into inventory compliance. It accurately deducts quantities when outbound DDS are issued while simultaneously recording incoming supplier DDS. This precise inflow-outflow reconciliation, tied to specific DDS, forms the foundation of a compliant inventory ledger.
Given that DDS can be valid for up to one year and supplier reporting frequencies vary, compliance also hinges on timing: it’s not enough to have a DDS, it must align with both quantity and validity throughout the product's lifecycle. If a DDS is expired or its volume exhausted, compliance fails. Prewave’s module ensures this alignment through continuous monitoring and detailed record-keeping, safeguarding against such breaches.
Reducing administrative overhead and enhancing operational efficiency
Prewave's Quantity Accounting Module significantly eases the administrative burden of EUDR by automating the creation of DDS. This automation drastically reduces manual effort, minimizes errors, and cuts down processing time. The module simplifies the use of aggregated DDS by managing complex requirements such as geodata, producer details, and quantity control within a structured framework.
Crucially, it also empowers companies to proactively request EUDR-relevant data from suppliers, which is vital for reducing the risk of compliance disruptions, especially critical for businesses relying on just-in-time or spot orders. By streamlining these processes and securing timely evidence, the module not only frees up valuable internal resources but also fosters improved supplier communication, greater standardization, and enhanced collaboration throughout the supply chain.