Top EDI Document Types to Integrate and Automate
Electronic Data Interchange (EDI) is an efficient and effective supply chain management tool, EDI can help reduce lead time, save documentation processing cost, eliminate procurement errors, clarify inventory status information, and enhance strategic alliances throughout the supply chain. In this blog, we will be focusing on some of the top EDI document types that many businesses integrate.
What is EDI Integration?
EDI integration is created when an EDI workflow is established between trading partners. It covers multiple key elements, including:
- Trading partners
- Endpoint- IT system to send, receive and process EDI data (ERP, sales system, logistics systems, etc)
- EDI documents and transactions
- EDI standards
- EDI protocols
Once these elements have been ironed out it's time to set up a system, using the best EDI software or technology for your specific workflow. Once the systems are properly integrated, you can automate all of your business documents and transactions. By now, you may be feeling overwhelmed, wondering where to start.
Below you can find a list of the top EDI document types that businesses integrate
One of the very first documents to integrate is the purchase order (PO). Known as EDI 850, which provides the same information you would find in a paper PO document such as, Item, prices and quantities ordered, shipping details, payment terms, etc.
When your systems are integrated with EDI, the 810 flows directly into the order management system, and when EDI is not integrated, a human would have to periodically check the EDI system for new orders and then manually re-key the order into the ERP or whatever other system is required for the fulfillment process.
EDI 810, invoices are typically sent in response to an EDI 850 as a request for payment once the goods have shipped or services are provided. Similarly to the PO, invoices are a vital part of the regular communication among retailers and suppliers. An EDI 810 will contain Invoice details such as invoice number and date, shipping details, payment terms, and etc.
Integrating both invoices and POs help with automating the purchase order-to-invoice reconciliation process.
The EDI 855 Purchase Order Acknowledgement is sent after the EDI 850 PO, to acknowledge that the supplier received the PO. Included in the confirmation, the document will tell the buyer if the purchase order was accepted, rejected or requires changes. EDI 855 is often required by large retailers and distributors and may need to be sent in a specified timeframe or at particular step in your order processing workflow to ensure EDI compliance.
With the 855 integrated, the supplier’s system automatically generates the acknowledgement via a workflow, without a person having to review the PO and send the response.
Once a purchase order has been accepted by the buyer there may some changes requested. The purchase order change request, or EDI 860, is used to update and amend a previously submitted purchase order. This could reflect a change in quantity, ship date, customs, transport details and etc, from the original PO.
Integrating the EDI 860 has many benefits like reduce errors associated with manual retyping and the number of customer service touchpoints, as well updating of time-critical orders which speed up the entire ordering and adjustment process.
The advanced shipping notice (ASN) also known as EDI 856 is sent from the seller after an order has been shipped. The EDI 856 can contain information such as, shipment number, PO number, quantity, item details and quantities and more.
The ASN is especially important for businesses that participate in drop shipping programs, where orders are shipped from suppliers, vendors or distributors on behalf of a retailer. Suppliers can benefit by tracking shipments and get products on store shelves faster and reduce order to payment cycles. Retailers can see improved speed and accuracy of receiving goods, receive shipment information in advance, planning for production and inventory can be enhanced.
The EDI 846 inventory inquiry/advice document tells the purchaser the quantity of goods the seller has on hand, as well as what they have on order for future dates. Knowing what inventory is available and in the pipeline enables both parties to better forecast and manage buying and selling needs.
An EDI 846 can be sent by suppliers at different frequencies, from multiple times a day to a few times a week depending on the needs of the trading partner. The Inventory Inquiry/Advice is most commonly used with online retailers such as Amazon, specifically for drop shipping.
Want more? See the full List of EDI ANSI X12 Documents and Transactions
Complete EDI Guide
This is one of the most up-to-date Complete EDI guides you will find on the internet with over 11,500+ words. It covers topics like the history of EDI, EDI stats and market growth, benefits of EDI, EDI transaction types, EDI standards, and more
