ANSI X12 vs UN/EDIFACT

Which one to choose?

To choose between ANSI X12 vs UN/EDIFACT standards it all comes down to where and with whom your doing business with. ANSI X12 is most commonly used in North America and UN/EDIFACT is mostly used in Europe and Asia.

Introduction

Electronic Data Interchange (EDI) has become an indispensable tool in today's business world for exchanging electronic data between organizations. Two of the most widely used EDI standards are ANSI X12 and UN/EDIFACT. ANSI X12 is a North American EDI standard, while EDIFACT is used mostly in Europe and Asia. Both standards have their own unique features and benefits. Let us compare both ANSI X12 and EDIFACT, their structure, segment, message type, benefits, and where they are used in different industries and countries.

Comparing ANSI X12 Vs UN/EDIFACT

Geography: The primary difference is geography. EDI X12 is most widely used in the United States and in North America. EDIFACT is mostly used by European- and Asian-based organizations.

Standards: The standards for EDI X12 are maintained by the Accredited Standards Committee X12 and EDIFACT’s standards are supported by The United Nations Economic Commission for Europe and the International Organization for Standardization.

Message structure: While the two standards both “do” the same thing – transfer data – they have slightly different terminology and document structures in how they get it done.

The table below highlights the difference between the ANSI X12 standard and the UN/EDIFACT standard.

Topic	ANSI X12	EDIFACT
*Application*	Mostly used in North America	Mostly used in Europe and Asia
*Terminologies Equivalence*	Transaction Sets	Messages
	Loops	Groups
	Terminators	Separators
Interchange Header/Trailer Segments	ISA/IEA	UNB/UNZ
Group Header/Trailer Segments	GS/GE	UNG/UNE (optional)
Transaction Set, (Message) Header/Trailer	ST/SE	UNH/UNT
*Separators Specification Segment*	ISA	UNA (optional)
*Commonly* *used Terminators, (Separators*)	Segment = ~	Segment = '
	Element = *	Element = +
	Composite = >	Composite =:
*Release Indicator*	Not supported	Supported
*Composite Elements*	Rarely used	Commonly Used
*Acknowledgment*	TA1 and 997	CONTRL
*Binary support*	BIN, BDS segments	ISO 9735-8 - Associated data in EDI
น*Security*	ASC X12.58 - Security Structures	- ISO 9735-5 - Security rules for batch EDI (authenticity, integrity, and non-repudiation of origin) - ISO 9735-6 - Secure authentication and acknowledgment message (message type - AUTACK) - ISO 9735-7 - Security rules for batch EDI (confidentiality) - ISO 9735-9 - Security key and certificate management message (message type - KEYMAN)

Terminologies Equivalence	EDI X12	EDIFACT
An electronic business document, such as an Invoice, Purchase Order, etc.	Transaction Set	Message
The blocks of multiple segments of the same type are grouped together.	Loops	Groups
Special characters to differentiate segments and elements	Terminator	Separators
Interchange Control. Header/Trailer	ISA/IEA	UNB/UNZ
Functional Group. Header/Trailer	GS/GE	UNG/UNE (optional)
Transaction Set, (Message). Header/Trailer	ST/SE	UNH/UNT

ANSI X12 Standard

ANSI stands for American National Standard Institute founded by the Accredited Standards Committee (ASC) in 1979 these are a set of standards and rules that determine a specific syntax for structuring and transferring business documents electronically between partners. This standard is also sometimes called ANSI X12 Standard or just simply X12.

ANSI X12 uses a hierarchical structure, which means that there are levels of segments. The top-level segment is the ISA segment, which identifies the sender and receiver of the message. Below the ISA segment, there are functional group segments, followed by transaction set segments, and then data segments. ANSI X12 has a wide range of message types, including purchase orders, invoices, shipping notices, and payment orders.

Transaction Set and Messages: the main body of the message — e.g., the purchase order details in a purchase order. X12 calls it a Transaction Set

The Functional Group: the header that specifies where the message will go, e.g., a company department. It can contain multiple Transaction Sets/Messages, for example, two or three invoices or an invoice and a PO. For both standards, the Functional Group has a header segment and a footer segment. X12 uses GS for the header segment and GE for the footer.

The Interchange: consists of a header and footer and identifies the company that you're sending the document to. X12 uses ISA for the header and IEA for the footer.

The EDI Document: These characters are specified out-of-band in X12 and are an optional control segment.

ASC X12 Segments and Sequence

The following Purchase Order example shows which segments can be used in the transaction set and the desired sequence of segments:

ID TITLE

ST Transaction Set Header

BEG Beginning Segment for Purchase Order

CUR Currency

REF Reference Identification

PER Administrative Communications Contract

TAX Tax Reference

FOB F.O.B. Related Information

CTP Pricing Information

PAM Period Amount

CSH Sales Requirements

TC2 Commodity

EDI 850 Purchase Order - Commport Communications

Benefits of ANSI X12 Standard

The ANSI X12 standard is a widely used electronic data interchange (EDI) standard in North America. It offers several benefits for organizations that use it to exchange electronic data. Here are some of the main benefits of the ANSI X12 standard:

Streamlined Electronic Data Exchange

The ANSI X12 standard enables organizations to exchange electronic data in a streamlined and efficient manner. It eliminates the need for manual data entry, which can reduce errors and save time. The standard defines a consistent format for data exchange, which ensures that data is easily understood and processed by both the sender and receiver.

Wide Range of Message Types

The ANSI X12 standard offers a wide range of message types for organizations to exchange data, including purchase orders, invoices, shipping notices, and payment orders. This allows organizations to exchange different types of data and automate many of their business processes.

Cost Savings

Using the ANSI X12 standard can result in cost savings for organizations. Electronic data exchange eliminates the need for paper-based transactions, reducing printing, postage, and processing costs. It also eliminates the need for manual data entry, reducing labor costs.

Increased Accuracy

The ANSI X12 standard can help improve data accuracy by reducing errors that can occur during manual data entry or paper-based transactions. The standard defines a consistent format for data exchange, which helps ensure that data is accurate and complete.

Industry Acceptance

The ANSI X12 standard is widely accepted and used in many industries, including healthcare, finance, retail, and automotive. Using a standard that is widely accepted can help organizations streamline their business processes and improve their supply chain efficiency.

UN/EDIFACT Standard

UN/EDIFACT (United Nations/Electronic Data Interchange for Administration, Commerce, and Transport is the international standard that was developed by the United Nations). Comprise a set of internationally agreed standards, directories, and guidelines for the electronic interchange of structured data, between independent computerized information systems.

EDIFACT uses a flat structure, which means that there are no levels of segments. All segments are at the same level. The UNA segment is used to identify the separator characters used in the message. Below the UNA segment, there are message header segments, followed by data segments. EDIFACT has a wide range of message types, including purchase orders, invoices, shipping notices, and payment orders.

An EDIFACT message represents a single business document. – For example, an ORDRSP file represents a Purchase Order note. Each message has a six-letter identifier that shows the short name of the message.

Any document in the UN / EDIFACT standard has a hierarchical structure. The entire electronic document is called a message. A message consists of data groups combined in some way, for example, a data group describing customs payments, a group of data describing the attributes of documents, etc. In turn, the group consists of typical data segments that describe document attributes in more detail. The standard provides about 200 different types of segments from which messages are composed. The segments themselves also have a hierarchical structure and consist of data elements that can be simple (data field) and composite (usually 2-3 data fields).

The following is the structure of an EDIFACT transmission:

Service String Advice
Interchange Header
Functional Group Header
Message Header
User Data Segments
Message Trailer
Functional Group Trailer
Interchange Trailer

See below for an example of an EDIFACT message used to answer a flight ticket (FRA-JFK-MIA) availability request:

UNA:+.? '

UNB+IATB:1+6XPPC:ZZ+LHPPC:ZZ+940101:0950+1'

UNH+1+PAORES:93:1:IA'

MSG+1:45'

IFT+3+XYZCOMPANY AVAILABILITY'

ERC+A7V:1:AMD'

IFT+3+NO MORE FLIGHTS'

ODI'

TVL+240493:1000::1220+FRA+JFK+DL+400+C'

PDI++C:3+Y::3+F::1'

APD+74C:0:::6++++++6X'

TVL+240493:1740::2030+JFK+MIA+DL+081+C'

PDI++C:4'

APD+EM2:0:1630::6+++++++DA'

UNT+13+1'

UNZ+1+1'

Benefits of UN/EDIFACT

Global Acceptance

UN/EDIFACT is widely accepted and used globally in many industries, including transportation, finance, retail, and healthcare. Using a standard that is recognized and accepted worldwide can help streamline business processes and improve supply chain efficiency.

Wide Range of Message Types

UN/EDIFACT offers a wide range of message types for organizations to exchange data, including purchase orders, invoices, shipping notices, and payment orders. This allows organizations to exchange different types of data and automate many of their business processes.

Reduced Costs

Using UN/EDIFACT can result in cost savings for organizations. Electronic data exchange eliminates the need for paper-based transactions, reducing printing, postage, and processing costs. It also eliminates the need for manual data entry, reducing labor costs.

Improved Accuracy

UN/EDIFACT can help improve data accuracy by reducing errors that can occur during manual data entry or paper-based transactions. The standard defines a consistent format for data exchange, which helps ensure that data is accurate and complete.

Increased Efficiency

Using UN/EDIFACT can help organizations streamline their business processes and improve supply chain efficiency. Electronic data exchange enables faster and more efficient data transfer between organizations, reducing the time and effort required for manual data entry and paper-based transactions.

Common EDI Transaction Document Codes Used in ANSI X12 and UN/EDIFACT

ANSI X12	UN/EDIFACT	Name	Uses
EDI 810	INVOIC	Invoice	Used to receive payment for goods purchased
EDI 820	REMADV	Payment order / Remittance advice	Used to transfer information relating to payments
EDI 830	DELFOR	Planning schedule	Used to share with the supplier's forecast purchase plans
EDI 832	PRICAT	Price/sales catalog	Used to provide product price information
EDI 846	INVRPT	Inventory inquiry / advice	Used to communicate inventory levels
EDI 850	ORDERS	Purchase order	Used to place order for goods or services
EDI 852	SLSRPT	Product activity data	Used to provide sales, inventory and other product activity information
EDI 855	ORDRSP	PO acknowledgement	Used as an acknowledgement of the purchase order
EDI 856	DESADV	Advance ship notice / dispatch advice	Used to inform the recipient in advance about the shipment contents
EDI 860	ORDCHG	PO change (customer triggered)	Used to communicate order changes to the supplier
EDI 865	ORDRSP	PO change (supplier triggered)	Used to acceptance or rejection of changes to a previously submitted purchase order
EDI 997	CONTRL	Functional acknowledgement	Used to acknowledge that an EDI transaction was received

Conclusion

X12 and EDIFACT are both widely used EDI standards for exchanging electronic data between organizations. X12 is used primarily in North America, while EDIFACT is used globally. They both have their own unique features and benefits, such as X12's hierarchical structure and EDIFACT's flat structure. Both standards offer a wide range of message types, allowing organizations to exchange different types of data. Regardless of which standard an organization uses, EDI enables seamless and efficient electronic data exchange.

Frequently Asked Questions

What is ANSI X12, and how does it differ from UN/EDIFACT?

ANSI X12 and UN/EDIFACT are two widely used electronic data interchange (EDI) standards for exchanging business documents. ANSI X12 is primarily used in North America, while UN/EDIFACT is more common in Europe and other parts of the world. While both standards serve the same purpose of facilitating electronic communication between trading partners, they differ in syntax, structure, and data elements. Choosing between them often depends on regional business practices and partner requirements.

How do ANSI X12 and UN/EDIFACT handle data formats and structures?

Are there specific industries that prefer ANSI X12 over UN/EDIFACT or vice versa?

Yes, certain industries tend to favor one standard over the other based on historical adoption and regional influence. For instance, industries like retail, manufacturing, and healthcare in North America often lean towards ANSI X12, whereas industries like automotive, logistics, and international trade in Europe frequently use UN/EDIFACT. However, these preferences can vary, and it's essential to assess the requirements of your trading partners and local business practices.

Can systems using ANSI X12 communicate seamlessly with those using UN/EDIFACT?

While both ANSI X12 and UN/EDIFACT serve the same purpose of facilitating EDI, direct communication between systems using these different standards can require translation and mapping. To ensure seamless communication, you might need intermediary software or Value-Added Network (VAN) services that can translate messages from one standard to the other. This process ensures compatibility between trading partners using different standards.

How do ANSI X12 and UN/EDIFACT impact global business operations?

ANSI X12 and UN/EDIFACT can significantly impact global business operations due to their regional prevalence. If your business operates internationally, it's crucial to understand the preferred standard in the regions you engage with. Adapting to the relevant standard streamlines communication with partners, reduces translation and mapping overhead, and enhances overall efficiency in cross-border transactions.

What is EDI Integration?

EDI integration means setting up a full EDI workflow between trading partners to exchange business documents. This includes establishing endpoints, protocols, and EDI document transactions that you exchange with your trading partner and also translating those documents into a format that can be used by your internal order management, ERP, or accounting systems. Thus, integration enables the seamless transfer of EDI data to and from other systems, eliminating the need for manual data entry and reducing errors.

In today’s digital world, businesses that are utilizing EDI technology to their fullest are the ones who are achieving an exceptional increase in their supply chain operational efficiencies by automating the entire process of EDI document exchange and improving overall trading partner relationships by achieving 100% EDI compliance.

Types of EDI Integration

There are 3 types of EDI integrations.

Direct EDI Integration
Indirect EDI Integration
Hybrid EDI Integration

1. Direct EDI integration

Direct EDI Integration - Commport Communications

A direct EDI integration uses a specific protocol such as FTP, sFTP, or AS2 to create a point-to-point connection between your trading partners and Internal ERP or accounting system. In this type of setup, the businesses manage thousands of individual partners’ connections to bring in the data from their trading partners to internal ERP systems. This system becomes too complex to manage as we add more connections and could become difficult to scale or manage over time as your business grows. This type of setup is more suitable for small businesses that only deal with a limited number of trading partners.

2. Indirect EDI Integration

Indirect EDI Integration - Commport Communications

In an indirect EDI integration set up the exchange of communication between your trading partners and ERP is achieved using a 3^rd party EDI VAN. First, the message from your ERP system for your trading partner goes out to the VAN and then the VAN splits the message into the format that is preferred by your trading partners and sends it to them. This type of integration is more suitable for medium to large enterprises as they would deal with hundreds of trading partners and they don’t have to set up a separate connection for each one or worry about different protocols to be used, as the VAN can connect to any protocol and transmit the message to the correct trading partner irrespective of the trading partner protocol requirements.

3. Hybrid EDI Integration

Hydrid EDI Integration - Commport Communications

Just like how you have hybrid cars which switch between gasoline and electric to enhance the overall experience and help you save some dollars on gasoline. In a hybrid EDI integration sometimes, companies may need both direct and indirect integration to accommodate various trading partner needs. Like for example if you deal with a specific trading partner with large volumes of data daily it makes sense to connect with them using a direct point-to-point integration to avoid processing delays or connection errors. However, to deal with other small to medium trading partners you can use indirect EDI integration. So, you basically need a combination of managed EDI service and a point-to-point setup to exchange EDI data.

How Can a EDI Integration Services by Commport Communications Can Help Your Business Operations?

1. Workflow Automation

Helps improve your overall business operations by automating order processing, invoicing, packing, and shipping. Streamlines messaging across multiple trading partners.

2. Data Transparency & Security

A stand-alone centralized system for all your data exchange needs in a standardized format. Easy order tracking with real-time data. Enabling accurate fulfillment, and delivery, reduced errors, and increase sales. Securing the data exchange by using protocols such as AS2 or sFTP and providing world-class support with uninterrupted exchanges. Transaction traceability, redundant in-house data hosting centers, and business continuity and recovery plans.

3. Best Support Services

Using Commport as a EDI vendor for your integrations can help you not only just with integration challenges but also help you manage the entire EDI system, by providing you with on boarding support, implementation, compliance testing, and 24/7 emergency support with error monitoring and issue resolution.

4. Support Multiple Fulfillment Models & Agile

Businesses can have multiple fulfillment models to deliver products to their partners. It could be D2C (direct to consumer), ship to 3PL provider, ship to store directly, ship to distribution center (DC), and many more models. Our Team of EDI experts will ensure 100% complaint with your needs and current technologies.

5. Pre-Built & Established EDI Mapping

Commport has a pre-built mappings with hundreds of trading partners across the world. Complaint with many EDI standards including the most popular standards like ANSI X12 Standard and EDIFACT standards. Because of this existing pre-built mapping, it is faster to connect with the trading partner and start exchanging EDI documents in a few days rather than waiting for weeks or months.

5 Benefits of EDI Integration

Improved Efficiency: Integrating with EDI eliminates the need for manual data entry, reducing the time and effort required to process business transactions. This can improve operational efficiency and productivity.
Cost Savings: EDI integration can reduce costs associated with paper-based processes, such as printing, postage, and document storage. Additionally, It also help businesses avoid costly errors and delays caused by manual data entry.
Better Communication: EDI enables real-time data exchange between systems, improving communication between businesses and their trading partners. This can lead to better collaboration and a more seamless supply chain.
Increased Accuracy: EDI can help reduce errors and inconsistencies in data by automating data entry and validation. This can help ensure that information is accurate and up to date.
Scalability: EDI can be easily scaled as businesses grow and their integration needs change. APIs and middle ware can be added or modified to accommodate new systems and applications.

Why Choose Commport as Your EDI Service Provider?

Become 100% EDI Complaint which is a mandatory requirement by most trading partners,
Avoid costly chargebacks by eliminating manual data entry and automating the entire EDI exchange process in a standardized format.
Improve operational efficiency, increase your profits, and improve your relationships with your trading partners.
Eliminate the complexity of developing your own in-house EDI solution and save costs.
It’s easy to integrate with hundreds of trading partners as Commport has pre-built mappings with all major trading partners.

Conclusion

EDI integration can provide significant benefits to businesses looking to improve their supply chain operations. By automating data entry and validation, EDI integration can reduce errors, improve efficiency, and save costs. With the ability to scale and adapt to changing business needs, EDI solutions can be a valuable for businesses of all sizes to improve b2b communication and maintain good relationships with your trading partners.

Frequently Asked Questions

Define EDI Integration?

Types of EDI Integrations

List of Communication Protocols

List of Common EDI Standards

The Role of EDI in eCommerce and Online Retail

EDI in eCommerce facilitates business document exchange such as purchase orders, invoices, and shipping notices between trading partners and customers in a standardized format.

Introduction

Define eCommerce

E-commerce stands for electronic commerce. It makes buying and selling products or services easy by using the internet. It makes use of various digital technologies such as websites, mobile apps, and social media to process online transactions between buyers and sellers.

Ecommerce stores help customers browse through products and facilitates the purchase of products or services using electronic payment methods such as credit cards, debit cards, e-wallets/digital wallets, and bank transfer.

The advent of e-commerce has transformed the business landscape and has presented new opportunities for entrepreneurs and consumers alike to reach global marketplaces.

Interesting EDI and eCommerce Stats

Here are some statistics that illustrate how Electronic Data Interchange (EDI) is helping the e-commerce industry:

According to recent industry calculations, Brazil will rank first among 20 countries worldwide in retail e-commerce development between 2023 and 2027, with a compound annual growth rate of 14.6 percent. Argentina and Turkey are also among the fastest-growing e-commerce markets globally, with a CAGR of over 14 percent. The global retail e-commerce CAGR was estimated at 11.3 percent during the same period.

According to a study by Grand View Research, the global EDI market size is expected to reach USD 3.89 billion by 2025, growing at a compound annual growth rate (CAGR) of 10.8% from 2019 to 2025. The increasing adoption of EDI in e-commerce is one of the key drivers of this growth.

A study by GS1 US found that businesses that implement EDI can save up to 40% in procurement, order processing, and invoice handling costs. This can result in significant cost savings for businesses engaged in e-commerce.

How EDI is Integrated into an eCommerce Store?

Electronic Data Interchange (EDI) plays a crucial role in standardizing and automating the exchange of business documents between trading partners in the e-commerce industry. By using standardized EDI formats and automated systems, eCommerce businesses can improve the speed, accuracy, and cost-effectiveness of their transaction processing. EDI streamlines the processing of orders, invoices, and shipping notices, enabling businesses to provide better customer service and enhance customer satisfaction.

Here is an example of a real-time scenario of how an EDI system helps communication between an eCommerce company, its customer, and its trading partner.

Let's say that an e-commerce company named ABC sells a variety of products, including computer hardware and software, and has a trading partner named XYZ, which supplies the hardware products. ABC's customer, Mark, wants to buy a computer from ABC's website. Here's how the EDI system can facilitate communication between all parties involved:

Mark visits ABC's website and places an order for a computer.
ABC's e-commerce platform generates a purchase order in EDI format, which includes all the details of the order, such as the product description, quantity, price, and delivery date.
The purchase order is automatically sent to XYZ's EDI system, which processes the order and generates an electronic invoice in EDI format.
The invoice is automatically sent to ABC's EDI system, which processes the invoice and generates an automated payment.
The payment is automatically sent to XYZ's EDI system, which processes the payment and ships the product.
Once the product is shipped, XYZ's EDI system generates a shipping notice in EDI format, which includes the tracking number and estimated delivery date.
The shipping notice is automatically sent to ABC's EDI system, which processes the notice and sends a notification to Mark, including the tracking number and estimated delivery date.

By using an EDI system, the entire process of ordering, invoicing, payment, and shipping can be streamlined and automated, reducing the need for manual intervention and human error. This, in turn, can improve the speed and accuracy of communication between all parties involved, ultimately enhancing customer satisfaction and loyalty.

Benefits of using EDI in eCommerce

EDI is a vital technology for businesses in eCommerce. It helps increase business efficiency, improve accuracy, enhance customer service, saves thousands of dollars, and provide a competitive advantage.

EDI in eCommerce facilitates business document exchange such as purchase orders, invoices, and shipping notices between trading partners and customers in a standardized format. EDI in eCommerce makes communication easier with suppliers, distributors, and customers. For example, a retailer may use EDI to receive purchase orders from their suppliers, send shipping notices to their logistics providers, and receive invoices from their vendors. EDI allows these transactions to be processed quickly and accurately, without the need for manual data entry or paper-based documents.

1. Increased Efficiency

EDI eliminates the need for paper-based documents, manual data entry, and human intervention, streamlining transaction processing and improving operational efficiency

2. Improved Accuracy

EDI reduces the risk of errors that can occur with manual data entry, providing businesses with more accurate and reliable information

3. Enhanced Customer Service

By enabling faster and more accurate processing of orders, invoices, and shipping notices, EDI can help businesses provide better customer service and improve customer satisfaction.

4. Cost Savings

EDI reduces printing, storage, and labor costs, while also minimizing the risk of costly errors.

5. Competitive Advantage

Businesses that use EDI are better positioned to compete in e-commerce markets by operating more efficiently, responding more quickly to customer demands, and reducing costs

Types of EDI documents used in eCommerce

Most EDI solutions can integrate directly with your E-commerce store to enable seamless communication between partners and customers. Many e-commerce platforms support EDI standards, such as ANSI X12, EDIFACT, and XML, which define the syntax and structure of the electronic documents exchanged between trading partners.

The following are some common types of EDI X12 documents used in e-commerce:

850 Purchase Order: The 850 transaction set is used by buyers to send purchase orders to suppliers. It includes information such as buyer and supplier details, item numbers, quantities, prices, and delivery dates.
855 Purchase Order Acknowledgment: The 855 transaction set is used by suppliers to confirm the receipt of a purchase order. It contains information such as the purchase order number, date, and acceptance or rejection of the order.
856 Advanced Shipping Notice: The 856 transaction set is used to provide buyers with information about the shipment of goods from the supplier. It includes details such as ship date, carrier name, tracking number, and item details.
810 Invoice: The 810 transaction set is used by suppliers to send invoices to buyers. It contains information such as supplier and buyer details, invoice number, date, and item information, including quantities and prices.
997 Functional Acknowledgment: The 997 transaction set is used to confirm receipt of EDI documents by the trading partner. It includes details such as document control number, date and time of receipt, and any encountered issues or errors during processing.
820 Payment Order/Remittance Advice: The 820 transaction set is used by buyers to send payment orders and remittance advice to suppliers. It includes details such as payment amount, invoice number, and payment date.

Future of EDI in eCommerce

Emerging technologies that will impact EDI in eCommerce

Several emerging technologies have the potential to impact EDI in e-commerce in the near future. These technologies include blockchain, artificial intelligence (AI), the Internet of Things (IoT), machine learning (ML), and cloud computing.

Blockchain technology has the potential to enhance the security, transparency, and traceability of EDI transactions by creating a tamper-proof ledger. This can help prevent fraud, errors, and disputes in e-commerce transactions.
Artificial intelligence and machine learning algorithms can help analyze large quantities of data from EDI transactions and spot important patterns and trends to help forecast product demands, improve supply chain operational efficiency, and improve overall customer satisfaction.
Using smart IoT devices e-commerce companies can collect real-time data on inventory, delivery, and customer preferences.
Advancement in cloud computing technology has made it possible to develop cloud-based EDI solutions which can be used from anywhere in the world with just an internet connection and a computer. No need to install any complicated software or require any big IT infrastructure and its also affordable for businesses of all sizes.

Conclusion

The growth of eCommerce has been phenomenal in the past decade and the trend is continuing to grow as more and more Millennials and Gen Z are using online to buy/sell products. To support such rapid growth eCommerce technology needs to be agile and must fit into market demand. To achieve such a level of performance eCommerce platforms are integrating with EDI systems to speed up and automate procurement, order processing, and invoice handling.

Why Choose Commport as Your EDI Provider?

Over 35+ years of experience in providing a wide range of innovative and comprehensive supply chain management solutions for Electronic Commerce (EC)
Trusted by over 6000+ brands
Never have to worry about your EDI implementation challenges, our team will support you with all your integration challenges
Commport EDI solutions can automate your entire EDI communication process and improve your business efficiency and cash flow
Dedicated account manager and multilingual support. Our support staff can speak in English, Spanish and French

Ready to find out more about Commport EDI Solutions?

Drop us a line today for a free quote!

Commport EDI Solutions

Frequently Asked Questions

What is eCommerce?

E-commerce stands for electronic commerce. It makes buying and selling products or services easy by using the internet

What is EDI in eCommerce?

EDI in eCommerce facilitates business document exchange such as purchase orders, invoices, and shipping notices between trading partners and customers in a standardized format.

Benefits of using EDI in eCommerce

Increased Efficiency, improved accuracy, enhanced customer service, cost savings and competitive advantage.

Common EDI documents used in eCommerce

Purchase orders, purchase order Acknowledgment, invoice, advance ship notices, payment order remittance.

What is B2B Commerce?

B2B commerce, which stands for business-to-business commerce, involves the exchange of goods or services between companies rather than between businesses and individual consumers. In this type of commerce, buyers and sellers are typically organizations or enterprises that require products or services to support their own operations or to resell to their customers. B2B commerce can be carried out through various channels, such as e-commerce websites, electronic data interchange (EDI), phone, email, or in-person meetings, and can encompass transactions of various sizes and complexities.

10 Ways EDI Can Improve Supply Chain Efficiency

10 Ways EDI Can Improve Your Supply Chain Efficiency

Before we get started on how to optimize and improve supply chain efficiency, it is important to define and know what is supply chain management and its importance in the end-to-end delivery of final products to customers.

10 Ways EDI Can Improve Supply Chain Efficiency

What is supply chain management?

Supply chain management is the process of managing and perfecting procurement, the flow of materials, and the delivery of products and services from source to destination (i.e., from suppliers to customers). It involves integrating all the supply chain components such as planning, controlling, coordinating, and integrating suppliers, inventory control, manufacturing process, material handling, transportation management, and information technology. The main goal of supply chain management is to deliver value to customers while maximizing efficiency in cost and throughput time

What is supply chain efficiency?

In simple terms supply chain efficiency means maximizing your supply chain output by reducing costs. It is the way in which the resources are optimized to deliver goods and services to customers faster and on time with minimal cost. There are other factors that also affect your supply chain efficiencies such as operations capabilities, inventory demand from customers, and technology challenges.

supply chain efficiency - Commport Communications

Supply chain operational - Commport Communicationscosts

1. EDI helps brings down your supply chain operational costs significantly

To reduce your operational costs, the first thing you need to estimate is which customers drive the highest level of revenue to your business. Conduct an effective cost-to-serve analysis and this can be done with accurate and real-time invoicing using EDI.

Once you have a detailed cost-to-serve analysis you can accurately estimate the profit margins for each customer and identify the ones which are not profitable and then you can optimize your supply chain to do things differently and more efficiently to reduce your operational costs by automating your order processing, inventory management and having greater control over your distribution networks.

Usually, mistakes in your purchase orders and invoicing can also lead to costly charge backs for thousands of dollars from your business partners and these mistakes happen if you still process your data manually. This can be avoided by using EDI which can automate your entire document exchange process in a standardized format that is widely accepted by all major retailers and make your business EDI-compliant.

2. EDI helps you forecast product demands to better plan your supply and demand needs

Effective EDI solutions update all your data such as orders, invoicing, shipping, returns, etc. in real-time. Access to such real-time data can help you forecast demand for certain products. Identifying which products are selling fast and which are not. This way a retailer can plan effective inventory management by stocking up for the products with high demand in advance and not keeping too much inventory for slow-moving products. All these forecasting metrics can help you better optimize your supply chain efficiency to get your products delivered on time to your customers.

forecast product demands - commport communications

3. EDI helps you with better inventory management with real-time data

Inventory management is crucial for all businesses. It’s not just about holding up stocks, but also how fast these stocks are moving out from the warehouse to customers. The longer the time the stock is held up in the warehouse the more costs are added to inventory management. A business using EDI for inventory management can check their stocks daily or hourly giving them real-time updates on stock movement, speeding up the order processing, and delivering products faster to customers by better-optimizing delivery routes. Also, the chance of errors in order processing is reduced significantly using EDI as it’s all processed automatically without manual intervention which in turn reduces any delays in order processing and reaching customers faster.

4. Improved order-to-cash-cycle

The order-to-cash cycle decides how fast the business receives the payment in full for the products purchased by the customers. The longer it takes, it affects the overall business cash flow, which in turn affects the net operating income for the business. In the manual process scenario, this could assume to 2 weeks because the business must fax the invoice to the customer and then the customer enters the invoiced data into the system manually and then tally the products purchased with goods received, and then makes the payment. This entire process delays the overall order-to-cash cycle process.

By using EDI this entire process can be automated and processed in minutes rather than days. Automated EDI systems can also integrate with other areas of your business-like inventory tracking, ERP software, or customer relationship management (CRM) programs for a more comprehensive view of all processes. Additionally, using dashboards or reporting tools can be crucial for analyzing key metrics like days sales outstanding (DSO) which shows how quickly customers are paying you.

order-to-cash-cycle - commport communications

Improves trading partner relationships - commport communications

5. EDI Improves trading partner relationships

Today almost 90% of all retailers require their vendors/suppliers to be EDI-compliant to do business with them. EDI makes it easy to exchange data electronically such as invoices, purchase orders, advance ship notices, and hundreds of other EDI document types. There are many EDI standards accepted by trading partners/retailers. But the 2 most popular EDI standards are EDI X12 and UN/EDIFACT standard.

Being EDI compliant means it’s an opportunity as a supplier to stand out from others who are not compliant and easily scale your business by exchanging EDI with all major retailers and gaining access to a global network of customers and retailers all over the world.

6. Using cloud-based EDI you can do business from anywhere

Cloud-based EDI solutions are the game changer for the EDI industry. It’s the most economical EDI solution and easy to use. The best part is you don’t need to install any complicated software. You can access it from anywhere in the world with just a computer and internet connection and you can begin exchanging EDI with your trading partner today. You don’t need to be an expert or require any complex training to use cloud-based EDI solutions, they have user-friendly interfaces. Also, it’s easy to keep track of all your EDI transactions in one single dashboard.

7. EDI helps transform your value chain

A value chain is a system of activities that starts with the task of supplying raw materials and ends with the delivery of a finished product or service. It looks at all the activities that are necessary to add value to a good or service as it flows through the supply chain, from suppliers to customers. Each step in the process adds value which can then be passed on to the end customer, resulting in profit for the company. By understanding the multiple stages of a value chain, companies can better manage costs and improve product or service quality.

EDI can play a key role in each stage of the value chain to improve your overall supply chain operational efficiency and reduce costs. This involves improving relationships with suppliers who can supply quality, cost-effective products that meet customer expectations. Additionally, suppliers should be able to support current and future demand for the products and keep open communication by providing continuous updates. With much valuable data, you can spot trends in real-time in understanding customer buying habits which allows you to optimize your value chain performance to better meet customer demands.

8. Improved customer experience

EDI helps streamline all your communications. Your customers can get an automatic update on orders, shipments, on-time delivery dates on time, returns and so much more. It enhances transparency by providing accurate information on their transactions. Makes the customer experience better and turns them into loyal customers.

9. Better supply chain visibility

EDI helps you with supply chain visibility by monitoring your supply chain performance in real-time, providing valuable insights on various resources with up-to-date information on the movement of goods and materials. All the data gathered can be used to optimize resource management, identify potential problems or delays in the supply chain and make improvements and reduce overall operational costs.

10. Improved data accuracy helps you make informed decisions.

As we already know, EDI makes data exchange easy by replacing the old paper-based system with electronic data exchange. It is not just the speed at which the data is exchanged is improved but also its accuracy. EDI makes sure you receive 100% accurate information without any errors that let you make informed decisions on various aspects of your supply chain to better scale its efficiency.

Why Choose Commport as Your EDI Provider?

Over 35+ years of experience in implementing EDI solutions.
Helped over 6000+ brands/trading partners to become EDI compliant
On boarding new partners will be easy as we already have existing connections with all major trading partners
Never have to worry about your EDI implementation challenges, our team will support you with all your integration challenges
Automate your entire EDI communication process and improve your business efficiency and cash flow
Dedicated account manager and multilingual support. Our support staff can speak in English, Spanish and French

Ready to find out more about Commport EDI Solutions?

Drop us a line today for a free quote!

Commport EDI Solutions

Frequently Asked Questions

What is Supply Chain Management?

What is Supply Chain Efficiency?

What is Inventory Management?

What is Order to Cash Cycle?

What is a Value Chain?

How EDI is Used in the Food & Beverage Industry?

The supply chain in the food and beverage industry involves the movement of raw materials, ingredients, and finished products from producers to manufacturers, distributors, and ultimately, to consumers. The supply chain can be complex, involving multiple stakeholders and processes, including sourcing, production, storage, transportation, and distribution.

Supply chain management is critical for ensuring the safety and quality of products, as well as for meeting the demand of consumers. It is also important for managing costs and maximizing efficiency.

To optimize their supply chain, companies may use various tools and technologies, such as inventory management systems, transportation management systems, and demand forecasting tools. They may also adopt supply chain best practices, such as implementing lean manufacturing techniques, using just-in-time (JIT) inventory systems, and adopting a collaborative approach to working with suppliers and other stakeholders

EDI is one of the commonly used technology in the food and beverage industry for exchanging a variety of documents, including orders, invoices, shipping notices, and product information.

Using EDI can improve the efficiency of business processes and reduce the risk of errors in the exchange of information. For example, EDI can be used to automatically place orders with suppliers, track shipments, and manage inventory. This can help food and beverage companies to reduce costs and improve their supply chain management.

In addition to using EDI to exchange information with suppliers and other business partners, food and beverage companies may also use EDI to communicate with government agencies and regulatory bodies. For example, EDI can be used to transmit food safety reports or to meet requirements for traceability and product recall.

There are several supply chain solutions that can help food and beverage companies to improve their operations and manage their supply chain more efficiently. These solutions include:

1. Inventory Management

Automated inventory management systems can help food and beverage companies to track and manage their inventory in real time, ensuring that they have the right products in stock at the right time\

it can help to minimize the costs associated with holding too much or too little inventory, such as storage costs or lost sales. It can also help businesses to reduce waste and improve efficiency by ensuring that inventory is used efficiently and effectively.

There are several key strategies that businesses can use to manage their inventory, including:

Just-in-time (JIT) inventory: This involves keeping only the minimum amount of inventory needed to meet demand, and ordering more as needed. This can help to reduce storage costs and minimize the risk of holding excess inventory.
Economic order quantity (EOQ): This involves determining the optimal order size for inventory based on factors such as the cost of placing an order, the cost of holding inventory, and the demand for the product.
Safety stock: This is a buffer of inventory that is kept on hand to ensure that the business can meet demand even if there are unexpected delays in the supply chain.
Inventory turnover: This is a measure of how quickly a business is selling its inventory. A high inventory turnover can indicate that the business is effectively managing its inventory and meeting customer demand.
Inventory accuracy: This involves accurately tracking and counting the inventory that a business has on hand, to ensure that it has accurate data on which to base its inventory management decisions.

2. Supply Chain Visibility

Supply chain visibility solutions can provide real-time tracking and visibility of shipments, enabling food and beverage companies to quickly identify and resolve any issues that may arise

There are several ways that businesses can improve supply chain visibility, including:

Implementing real-time tracking and monitoring systems: This can involve using technologies such as RFID (radio-frequency identification) tags, GPS tracking, and sensors to track the movement of goods and materials in real-time.
Standardizing data and communication: By using standardized data formats and communication protocols, businesses can ensure that they have a consistent and accurate view of their supply chain.
Collaborating with partners: By working closely with suppliers, manufacturers, and other partners in the supply chain, businesses can gain a more comprehensive view of their supply chain.
Using analytics and artificial intelligence: By analyzing data from various sources, businesses can gain insights into their supply chain and identify opportunities for improvement.

3. Transportation Management

Transportation management systems can help food and beverage companies to optimize their shipping routes and reduce costs by finding the most efficient and cost-effective carriers.

There are several key tasks involved in transportation management, including:

Route planning: This involves determining the most efficient and cost-effective route for transporting goods from one location to another.
Capacity planning: This involves determining the amount of capacity needed to transport goods and ensuring that there is enough capacity available to meet demand.
Freight management: This involves coordinating the movement of goods by road, rail, air, or sea, and managing the associated logistics, such as customs clearance and documentation.
Mode selection: This involves deciding which mode of transportation to use for a particular shipment, based on factors such as cost, speed, and reliability.
Carrier selection: This involves selecting the most suitable carrier to transport goods based on factors such as cost, reliability, and capacity.

4. Demand Forecasting

Demand forecasting solutions can help food and beverage companies to predict future demand for their products and adjust their production and inventory levels accordingly.

There are several methods that businesses can use to forecast demand, including:

Time series analysis: This involves analyzing historical data on sales and other demand-related metrics to identify trends and patterns.
Causal forecasting: This involves using statistical models to identify the key drivers of demand, such as economic indicators, and using these drivers to forecast future demand.
Judgmental forecasting: This involves using expert judgment and knowledge of the market to make predictions about future demand.
Machine learning: This involves using algorithms and data to automatically identify patterns and trends in demand data, and using these insights to make predictions about future demand.

Accurate demand forecasting is critical for businesses, as it can help to ensure that they have the right products and resources in place to meet customer demand and maximize profits. However, forecasting can be challenging due to the complexity of the market and the potential for unforeseen events to impact demand. As a result, businesses may need to use a combination of forecasting methods and continuously update their forecasts to ensure that they remain accurate and relevant.

5. Collaboration and Communication

Collaboration and communication tools can help food and beverage companies to collaborate with their suppliers, customers, and other stakeholders more effectively, improving the efficiency of their operations.

Here are some key ways that collaboration and communication can benefit businesses:

Improved decision-making: By involving team members from different departments and levels of the organization in decision-making processes, businesses can tap into a wider range of perspectives and expertise, leading to more informed and effective decisions.
Enhanced problem-solving: By fostering a culture of collaboration, businesses can encourage their employees to work together to identify and solve problems, leading to more innovative and effective solutions.
Increased productivity: Effective communication and collaboration can help to reduce duplication of effort and minimize misunderstandings, leading to increased efficiency and productivity.
Enhanced customer satisfaction: Collaboration and communication can help businesses to better understand their customers' needs and expectations, leading to improved customer satisfaction.
Stronger relationships: By fostering open lines of communication and promoting collaboration, businesses can build stronger relationships with their employees, customers, and partners.

Benefits of EDI in the Food and Beverage Industry

Faster orders, shipment, and payment processing

Automate data exchange such as invoices, purchase orders, ship notices, payment remittances, and more

Improves data accuracy. Automating the data exchange between business partners

Supply chain visibility provide real-time tracking and visibility of shipments

Regulatory compliance – This enables you to trace and track the source of raw materials that came to satisfy regulatory requirements

Common EDI Transaction Codes Used by Food & Beverage Industry

EDI X12 Transaction Number	EDI Transaction Name / Document Type	URL
EDI 180	Return Merchandise Authorization and Notification	Read More
EDI 290	Cooperative Advertising Agreements	Read More
EDI 810	Invoice	Read More
EDI 816	Organizational Relationships	Read More
EDI 832	Price/Sales Catalog	Read More
EDI 846	Inventory Inquiry/Advice	Read More
EDI 850	Purchase Order	Read More
EDI 855	Purchase Order Acknowledgment	Read More
EDI 856	Ship Notice/Manifest	Read More
EDI 857	Shipment and Billing Notice	Read More
EDI 860	Purchase Order Change Request - Buyer Initiated	Read More
EDI 865	Purchase Order Change Acknowledgement/Request – Seller Initiated	Read More

Why Choose Commport as Your EDI Provider?

Over 35+ years of experience in implementing EDI technology. Helped over 6000+ brands/trading partners to become EDI compliant
On boarding new partners will be easy as we already have existing connections with all major trading partners
Never have to worry about your EDI implementation challenges, our team will support you with all your integration challenges
Automate your entire EDI communication process and improve your business efficiency and cash flow
Dedicated account manager and multilingual support. Our support staff can speak in English, Spanish and French

Ready to find out more about Commport Supply Chain Solutions for Food & Beverage Industry?

Drop us a line today for a free quote!

Commport Solutions for Food & Beverage Industry

Frequently Asked Questions

What is Inventory Management?

What is Supply Chain Visibility?

What is Transportation Management?

What is Demand Forecasting?

What is a Value Chain?

What are EDI Payments?

EDI payment process involves the exchange of electronic documents and the automation of financial transactions, allowing businesses to streamline and automate their financial processes.

Introduction to EDI Payments

EDI payments refer to the use of EDI to facilitate the exchange of payment information between two parties. This can include information such as the amount of the payment, the payment method, and any relevant details about the payment, such as the invoice number or the reason for the payment.

EDI is not a form of payment. It is a data format used for computer-to-computer data and message exchanges for a variety of payment and payment-related processes. EDI, unlike EFT and ACH, is typically used to format business invoices and remittance information.

EDI payments can be used for a variety of purposes, including paying invoices, making employee payroll payments, and settling accounts between businesses. EDI payments are typically faster and more efficient than traditional paper-based payment methods, as they can be processed automatically and do not require manual intervention. They also reduce the risk of errors or fraud, as the information is transmitted electronically rather than entered manually.

An EDI payment uses globally accepted standards to transmit payment data between your customers, suppliers, and trading partners. Since EDI payments are quick and use a consistent way of exchanging data, businesses across industries use it via a direct connection to their trading partners, or they outsource the EDI connections via VANs/brokers.

What payment-related information is exchanged using EDI Transactions?

Details of the payer and payee: Name and address

Payment information: Credit/debit card or bank information

Transaction details: invoice number, purchase order, reference number

Currency: The total amount in the currency to be exchanged

Check or payment number & Payment amount

The payment date/remittance date

What is an example of an EDI Payment Transactions?

Remittance information

Invoices

Purchase Orders

Inventory and customs documents

Shipping Notices

Bills of Lading

Manual Payment Process Vs EDI Payment Process

Manual Payment Process

The manual payment process typically involves the following steps:

Generating an invoice: A business generates an invoice and sends it to the customer, either by mail or electronically.
Receiving payment: The customer reviews the invoice and decides how to pay it. This may involve writing a check or making an electronic payment using a credit card or online payment service.
Processing payment: The business receives the payment and processes it manually, either by depositing the check or entering the payment information into their accounting software.
Recording payment: The business records the payment in their financial records and updates the customer's account to reflect the payment.

Overall, the manual payment process involves a series of manual steps that can be time-consuming and prone to errors. In contrast, EDI payments allow businesses to automate and streamline their financial processes, improving efficiency and reducing the risk of errors.

EDI Payment Process

The EDI payment process typically involves the following steps:

Setting up an EDI system: To use EDI payments, businesses must first set up an EDI system, which involves installing software and establishing connectivity with trading partners.
Sending and receiving EDI documents: Once the EDI system is set up, businesses can begin sending and receiving EDI documents, such as invoices and payment instructions. These documents are typically transmitted via a secure network or through an EDI service provider.
Validating and processing EDI documents: When an EDI document is received, it must be validated to ensure that it is complete and conforms to the necessary standards. If the document is valid, it can be processed automatically or manually, depending on the business's preferences.
Making or receiving payments: If the EDI document contains payment instructions, the payment can be processed automatically through the EDI system. This may involve debiting or crediting the appropriate bank accounts or other financial accounts.

Why Businesses Should Use EDI Payments?

EDI payments can help businesses streamline and automate their financial processes, improving efficiency and saving time and resources. By automating manual tasks such as invoice processing, businesses can reduce the risk of errors and improve the accuracy of their financial data.

EDI payments can also help businesses save money on paper, printing, and postage costs, as well as streamline their supply chain processes. For example, the EDI 820 payment, which is a type of EDI transaction specifically designed for handling payment instructions, can help businesses automate the payment process and reduce the need for manual intervention.

Overall, EDI payments offer a number of benefits to businesses looking to improve their financial processes and reduce costs. By using EDI payments, businesses can streamline their financial operations and improve their productivity, making it easier to focus on other important tasks.

5 Benefits of Using EDI For Payment Processing

1. Efficiency: EDI payments can be processed automatically, which reduces the need for manual intervention and helps to streamline the payment process. This can save time and reduce the risk of errors.

2. Accuracy: EDI payments are less prone to errors than manual payment methods, as the information is transmitted electronically rather than entered manually. This can help to reduce the risk of fraud and ensure that payments are made accurately and on time.

3. Cost savings: EDI payments can help to reduce the costs associated with processing payments, as they eliminate the need for paper-based processes and can be transmitted electronically at a lower cost than traditional payment methods.

4. Improved cash flow: EDI payments can help to improve cash flow by enabling faster payment processing and reducing the risk of errors or delays. This can help businesses to manage their finances more effectively.

5. Improved relationships with suppliers: EDI payments can help businesses to maintain good relationships with their suppliers by making timely and accurate payments. This can help to strengthen the overall supply chain and encourage supplier loyalty

Who Uses EDI Payments?

EDI payments are used by a wide variety of businesses and organizations in many different industries. They are particularly common in industries where there is a large volume of transactions and where there is a need for fast and efficient payment processing, such as:

Manufacturing

EDI payments are often used by manufacturers to pay for raw materials, supplies, and other goods and services.

Retail

Retail businesses often use EDI payments to pay for goods and services from suppliers and to process employee payroll payments.

Healthcare

EDI payments are frequently used in the healthcare industry to facilitate the exchange of payment information between healthcare providers and payers, such as insurance companies.

Government

Many government agencies use EDI payments to facilitate the exchange of payment information with vendors and contractors.

Financial services

Financial institutions and other businesses in the financial services industry often use EDI payments to process transactions and transfer funds between parties.

Difference Between EDI, ACH, and EFT

Often EDI (electronic data interchange), EFT (electronic funds transfer), and ACH (automated clearing house) are mistaken as similar processes, but they can be used together to facilitate the payment information and the payment. So, while EDI helps exchange bank details, payee names, and other important details, EFT is an act that protects consumer rights and defines the bank’s responsibilities to monitor electronic fund transfers. And ACH is a type of electronic payment under EFT that you can use to make a payment between banks

EDI

EDI (Electronic Data Interchange) is a standardized way of exchanging business data electronically between organizations. It is often used to facilitate transactions such as payments, invoicing, and orders.

One way that EDI is used for payments is by allowing organizations to send payment instructions and remittance information electronically, rather than through paper documents or manual data entry. This can help to streamline the payment process, reduce errors, and improve efficiency.

For example, a supplier may send an EDI invoice to a customer using an EDI format, such as an ANSI X12 810 Invoice. The customer can then process the invoice and generate a payment through their financial system using EDI. The payment can be sent to the supplier through EDI, along with any necessary remittance information, such as the payment amount and details of any deductions or adjustments.

EDI can also be used to automate the reconciliation of payments and invoices, as the payment and invoicing information is exchanged in a standardized format that can be easily processed by financial systems. This can help to reduce the time and effort required to reconcile payments and invoices, and can improve the accuracy of financial reporting.

Overall, the use of EDI for payments can help to improve the efficiency and accuracy of financial transactions between organizations

ACH

ACH is a network that facilitates the transfer of funds between financial institutions. ACH payments refer to the use of this network to process electronic payments, such as direct deposits, bill payments, and e-checks

An Automated Clearing House (ACH) is a payment system that processes electronic financial transactions in the United States. It is operated by the National Automated Clearing House Association (NACHA) and is used to facilitate the transfer of funds between banks and other financial institutions.

ACH transactions include direct deposit of payroll, Social Security, and pension payments, as well as electronic bill payments and other types of electronic payments. ACH transactions are typically faster and more secure than paper-based transactions, and they can be initiated by businesses, financial institutions, and individuals.

To initiate an ACH transaction, a sender provides the necessary information to their financial institution, including the recipient's name, bank account number, and routing number. The financial institution then sends the transaction to the ACH network, which processes the transaction and transfers the funds to the recipient's account.

ACH transactions are settled in batches, typically at the end of the business day. This means that the funds may not be available in the recipient's account until the next business day, depending on the timing of the transaction and the policies of the financial institutions involved.

EFT

EFT is a general term that refers to any electronic transfer of funds. This can include ACH payments, wire transfers, and other types of electronic payments

An electronic funds transfer (EFT) is a type of financial transaction that involves the transfer of funds from one bank account to another, typically through electronic means such as a computer or mobile device. EFTs can be used to transfer money between individuals or to make payments to businesses and organizations.

There are several types of EFTs, including:

Automated Clearing House (ACH) transactions: ACH transactions are electronic payments that are processed through the National Automated Clearing House Association (NACHA). They include direct deposit of payroll, Social Security, and pension payments, as well as electronic bill payment and other types of electronic payments.
Wire transfers: A wire transfer is a type of EFT that allows funds to be transferred between financial institutions in different locations. Wire transfers are typically used for large or time-sensitive transactions, as they are typically faster than ACH transactions.
Electronic checks: An electronic check is a type of EFT that is initiated when a payer authorizes their financial institution to debit their account and transfer the funds to the payee's account. Electronic checks are often used for bill payment and other types of recurring payments.

Common EDI X12 Transactions Used in The Finance Industry

EDI X12 Transaction Number	EDI Transaction Name / Document Type
EDI 810	Invoice
EDI 820	Payment Order/Remittance Advice
EDI 850	Purchase Order
EDI 856	Advance Ship Notice / Manifest
EDI 857	Shipment and Billing Notice
EDI 135	Student Loan Application
EDI 139	Student Loan Guarantee Result
EDI 144	Student Loan Transfer and Status Verification
EDI 146	Request for Student Educational Record (Transcript)
EDI 147	Response to Request for Student Educational Record (Transcript)
EDI 188	Educational Course Inventory
EDI 189	Application for Admission to Educational Institutions
EDI 190	Student Enrollment Verification
EDI 191	Student Loan Pre-Claims and Claims
EDI 194	Grant or Assistance Application

Frequently Asked Questions

What are EDI Payments?

How do I get started with EDI payments?

What types of payments can be made through EDI?

Can any organization use EDI for payments?

Are EDI payments secure?

What are the benefits of using EDI for payments?

How does EDI work for payments?

What is ACH (Automated Clearing House)?

What is EFT (Electronic Funds Transfer)?

Ready to find out more about Commport EDI Solutions?

Drop us a line today for a free quote!

Commport Solutions

How EDI is Used in the Finance Industry?

How EDI is Used in the Finance Industry

Introduction to EDI in Finance

In this new era of digitalization, the growth of international trade has created opportunities for trade between buyers and suppliers across the globe, resulting in the globalization of the financial supply chain. It involves many different processes to exchange information such as differences in currencies, accounting regulations, and other financial transactions/documents. Using EDI in the financial process mitigates this risk by automating the data exchange process in a standardized format, enabling the seamless, accurate, and timely exchange of financial data between buyers, sellers, and their financial institutions.

The most common EDI standard used in North America is EDI ANSI X12 transactions. There also other popular EDI standards are also used across the world such as UN/EDIFACT, SWIFT, and more

EDI in the finance industry helps businesses, financial institutes, and governments with the seamless transmission of financial information on a massive scale by automating the entire transaction cycle and reducing the dependency on the manual labor-intensive process.

How EDI is used by Finance Industry

These are the few steps taken by a company or institution to exchange payments or payment-related information.

Step 1 – The buyer electronically extracts payment information from the organization’s account payable system

Step 2 – The data is formatted into an EDI standard. Then, the transaction set is transmitted to the organization’s bank

Step 3 – The bank formats that information into the format necessary for its transmission through the Automated Clearing House (ACH) network as an ACH transaction.

Step 4 – The ACH network delivers the payment and its associated data to the seller’s bank, with the bank crediting the seller.

Step 5- It automatically transmits the payment information to the seller’s account receivable system, where the seller can see the funds have been posted.

How EDI helps Streamline the Processes in Financial Industry

The financial industry such as banks and private financial institutions offers various financial services to both individuals and businesses some of those services include personal loans, mortgages, day-to-day banking services, credit cards, insurance, and many more. All these different services involve the processing of complex information in a standardized format such as the processing of payable and receivables, supporting post-trade security flows, transmitting settlement files, or enabling group benefits eligibility claims.

For many years these processes were completed using manual methods which often delayed the overall operations. However, with the adoption of EDI technology, all these processes were standardized and automated making it possible to exchange information in minutes and increasing overall operational efficiency, reducing transaction costs, and accuracy, and increasing customer satisfaction.

Benefits of EDI in the Financial Industry

Payment automation – Automate payments to suppliers/vendors, payroll processing, accounts payable/ receivable, and more

Highly secure & reduce errors – Securely exchange financial information between banks, suppliers, and trading partners. Reduce errors caused by manual data entry

Improve cash flow – EDI helps you collect your payments faster and more efficiently thus improving overall cash flow

Reduce data processing cost – EDI reduces the turnaround time to process the data by processing them electronically in a standardized format and exchanging information in minutes thus reducing the costs of manual data processing

Common EDI X12 Transactions Used in Finance Industry

EDI X12 transactions are used for student information and student loans processing

EDI X12 Transaction Number	EDI Transaction Name / Document Type
EDI 130	Student Educational Record (Transcript)
EDI 131	Student Educational Record (Transcript) Acknowledgment
EDI 135	Student Loan Application
EDI 139	Student Loan Guarantee Result
EDI 144	Student Loan Transfer and Status Verification
EDI 146	Request for Student Educational Record (Transcript)
EDI 147	Response to Request for Student Educational Record (Transcript)
EDI 188	Educational Course Inventory
EDI 189	Application for Admission to Educational Institutions
EDI 190	Student Enrollment Verification
EDI 191	Student Loan Pre-Claims and Claims
EDI 194	Grant or Assistance Application

EDI X12 transactions used by Financial Institutions

EDI X12 Transaction Number	EDI Transaction Name / Document Type
EDI 248	Account Assignment/Inquiry and Service/Status
EDI 810	Invoice
EDI 811	Consolidated Service Invoice/Statement
EDI 812	Credit/Debit Adjustment
EDI 818	Commission Sales Report
EDI 819	Operating Expense Statement
EDI 820	Payment Order/Remittance Advice
EDI 821	Financial Information Reporting
EDI 822	Account Analysis
EDI 823	Lockbox
EDI 824	Application Advice
EDI 827	Financial Return Notice
EDI 828	Debit Authorization
EDI 829	Payment Cancellation Request
EDI 831	Application Control Totals
EDI 859	Freight Invoice
EDI 980	Functional Group Totals

EDI X12 transactions used during mortgage processing

EDI X12 Transaction Number	EDI Transaction Name / Document Type
EDI 197	Real Estate Title Evidence
EDI 198	Loan Verification Information
EDI 199	Real Estate Settlement Information
EDI 200	Mortgage Credit Report
EDI 201	Residential Loan Application
EDI 202	Secondary Mortgage Market Loan Delivery
EDI 203	Secondary Mortgage Market Investor Report
EDI 205	Mortgage Note
EDI 206	Real Estate Inspection
EDI 260	Application for Mortgage Insurance Benefits
EDI 261	Real Estate Information Request
EDI 262	Real Estate Information Report
EDI 263	Residential Mortgage Insurance Application Response
EDI 264	Mortgage Loan Default Status
EDI 265	Real Estate Title Insurance Services Order
EDI 266	Mortgage or Property Record Change Notification
EDI 833	Mortgage Credit Report Order
EDI 872	Residential Mortgage Insurance Application

EDI X12 transactions used by insurance companies and healthcare providers

EDI X12 Transaction Number	EDI Transaction Name / Document Type
EDI 100	Insurance Plan Description
EDI 112	Property Damage Report
EDI 148	Report of Injury, Illness or Incident
EDI 186	Insurance Underwriting Requirements Reporting
EDI 252	Insurance Producer Administration
EDI 255	Underwriting Information Services
EDI 267	Individual Life, Annuity and Disability Application
EDI 268	Annuity Activity
EDI 270	Eligibility, Coverage or Benefit Inquiry
EDI 271	Eligibility, Coverage or Benefit Information
EDI 272	Property and Casualty Loss Notification
EDI 273	Insurance/Annuity Application Status
EDI 274	Health Care Provider Information
EDI 275	Patient Information
EDI 276	Health Care Claim Status Request
EDI 277	Health Care Claim Status Notification
EDI 278	Health Care Services Insurance/Benefit Review Information
EDI 288	Health Care Services Insurance/Benefit Review Information
EDI 362	Cargo Insurance Advice of Shipment
EDI 500	Medical Event Reporting
EDI 820	Premium Payments
EDI 834	Benefit Enrollment and Maintenance
EDI 835	Health Care Claim Payment/Advice
EDI 837	Health Care Claim
EDI 924	Loss or Damage Claim - Motor Vehicle
EDI 925	Claim Tracer
EDI 926	Claim Status Report and Tracer Reply
EDI 928	Automotive Inspection Detail

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Frequently Asked Questions

EDI in Finance Industry

Benefits of Using EDI in Finance Industry

Common EDI Transaction Codes Used in Finance Industry

How EDI Helps Your Dropshipping Ecommerce Business?

What is Dropshipping?

Dropshipping or DTC (Direct to consumer) is a fulfillment method where a retailer sells the product to its consumers via its online eCommerce store but does not keep the products in stock. Instead, the retailer sends the order information to its supplier and asks them to fulfill the order for its customer on their behalf.

Dropshipping has been around for over two decades now. However, it has gained more popularity in the last few years, mainly due to the Covid-19 pandemic, and consumers are switching to online to shop for products. Retail eCommerce is growing stronger year by year. In a recent survey by statista.com eCommerce revenue is projected to grow to $6.54 trillion US dollars, up from $3.53 trillion in 2019.

To keep up with this growing demand from consumers more and more retailers are reaching out to their suppliers, vendors, and 3PL providers to help them fulfill the eCommerce orders by automating the entire order-to-fulfillment cycle using EDI.

How Do EDI and Dropshipping Work Together?

How Do EDI and Dropshipping Work Together

Step 1 - It all starts when the consumer places the order via the retailer’s eCommerce store.

Step 2 - The retailer then sends the order information to the supplier via purchase order (EDI 850) which includes details like a list of products ordered, shipping addresses, order date, and more.

Step 3 - The supplier then acknowledges the order by sending EDI 855 and prepares the order with the retailers branded packing slip

Step 4 - The supplier ships the order with retailer branding to the customer and sends an ASN (advance ship notice) (EDI 856) with the shipment details including the tracking number to the retailer.

Step 5 - The supplier then sends EDI 810 invoice to the retailer for the fulfilled order

Step 6 - The retailer then sends EDI 820 (Payment order/remittance advice) to the supplier confirming the payment for the invoice

Step 7 - The customer receives the order

To keep the customer experience consistent, all customer-facing communications such us order confirmation and delivery updates are handled by the retailer.

As a Retailer How Can You Best Prepare for Your Dropshipping Business to Succeed?

The overall dropshipping fulfillment method looks easy. However, there are a few things that need to be achieved to scale your dropshipping business,

Investing in a right EDI Technology
Choosing the correct supplier partners and/or 3PL providers
Setting up the right expectations
Automating order fulfillment process
Customer satisfaction

Investing in a right EDI technology

The first step for your dropshipping business to be successful is to invest in the right EDI solution which will help streamline the exchange of orders, inventory, and shipping details from end to end. It’s important that the EDI solution you choose should integrate with your internal business systems like ERP and CRM so all data can flow in and out of the system automatically without you having to enter the data manually. Highly recommend choosing Commport Communications as your managed EDI service provider as we offer all the right EDI solutions and tools in one single unified platform, that will help you succeed with your dropshipping business.

Choosing the correct supplier partners and/or 3PL providers

Choosing your supplier partners wisely is also an important step for a successful dropshipping business. There are already hundreds and thousands of suppliers, vendors, and retailers using dropshipping for over a decade. Partnering with such well-established partners can help your dropshipping business scale as they may put all the processes in place, and they may be easier to partner with. Commport can help you connect with the right partners for your business as we have existing connections with all major retailers and suppliers and our EDI solutions can easily integrate with them.

Setting up the right expectations

It’s important to keep the right expectations from your partners. This includes how fast orders can be fulfilled, inventory management, how to handle customer returns and order cancellations, and more. All this can be achieved by setting up service level agreements (SLAs) with your trading partners.

Automating the order fulfillment process

The faster the order is fulfilled the happier your customers will be. One best example is Amazon, it’s a big dropshipping eCommerce store where more than 80% of the order-to-fulfillment cycle is less than 2 to 3 business days, and this is achieved by streamlining the supply chain with automation. So, the right EDI solution can help you speed up your order-to-fulfillment cycle by automating the entire process and helping deliver your order fast to your customers.

The customer is the king for any business to be successful and the same applies to dropshipping as well. The retailer must handle all the communications with the customer from order processing, tracking, returns, cancellation, and refunds to keep consistent communication with customers and provide the best customer satisfaction to keep them happy and that’s what makes them come back to you again and again.

Common EDI X12 Documents for Dropshipping

Each online retailer will have its own required EDI transactions, but the most exchanged EDI documents include:

(EDI 846) Inventory Inquiry/Advice
(EDI 850) Purchase Order
(EDI 855) Purchase Order Acknowledgement
(EDI 856) Advance Shipment Notice
(EDI 860) Purchase Order Change Request - Buyer Initiated
(EDI 865) Purchase Order Change Request - Acknowledgement
(EDI 810) Invoice

Benefits of Using EDI for Your Dropshipping Business

No need to Keep Physical Inventory

Retailers don’t have to keep the inventory in their warehouse, instead, ask the supplier/vendor to ship the order directly to the customer. This will save thousands of dollars in inventory storage and management.

Scale Quickly

Retailers can fulfill orders fast while reducing the workload on distribution, labor costs, and inventory management. Retailers can set up the dropshipping business with very little investment

Improved Business Relationship

When done right dropshipping will help strengthen the relationship between the retailer and the supplier.

Introducing New Products is Easy

Retailers can easily launch new products online without them launching on the actual physical store or keeping the inventory for the same.

Affordable and Easy to Setup

Low startup costs and easy to setup

Automation and Customer Satisfaction

You can fully achieve automation when you integrate EDI with your dropshipping business from order processing, ship notices, invoices, and payments without ever worrying about manual data entry and increase customer satisfaction

Flexible Integrations

Businesses of all sizes use many different internal systems from ERP, CRMs, SAP, accounting software, and more. By choosing the right EDI solution you can integrate all that data into your business systems easily.

Conclusion

To be successful with your dropshipping business, you need to invest in the right EDI solution so that your EDI provider supports your internal business systems infrastructure and can easily integrate and automate the end-to-end data exchange such as order processing, inventory management, and shipping.

Also, the EDI system should be able to handle large volumes of data that you receive from your suppliers/vendors.

The requirements for dropshipping are different from direct-to-store shipments. The organization of data, fulfillment process and timelines of EDI response documents are more stringent. Commport EDI experts can help you integrate the right EDI solution that will allow you to easily fulfill dropshipping orders. Commport EDI solutions will allow you easily add new trading partners/suppliers and improve your overall operational efficiency, business relationships, and customer satisfaction.

What type of Dropshipping EDI are you doing?

(No matter what you do. Commport got a solution to streamline it.)

Retail & eCommerce

Start dropshipping with your suppliers/vendors

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Suppliers, Vendors & Distributors

You are tasked up to do direct to consumer fulfillment

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3PL Logistics Providers

Partnering with Retailer/Suppliers to ship orders directly to consumer

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Frequently Asked Questions

What is Dropshipping?

How EDI is Used in Dropshipping?

Benefits of Using EDI for Your Dropshipping Business?

Common EDI X12 Documents Used in Dropshipping Business

How EDI Helps 3PL Providers (Third-Party Logistics Companies)?

What is 3PL

A 3PL provider is a third-party logistics company serving as links in outsourced distribution and fulfillment stages of the supply chain. 3PL companies provide full-scale logistics services such as transportation, warehousing, customs clearance, and other logistics-related activities. Basically, 3PL helps outsource a part of or a full logistics operation to a logistics service provider.

A recent New York Times article shared some insights on how the pandemic is forcing consumers to shop online during black Friday deals and US consumers have spent a whopping $9 billion on black Friday shopping, a 21% increase from 2019 and according to a 3PL central logistics provider, they saw an order volume increase by 42% year over year for holidays, which magnifies the impact increased volumes had on 3PL service providers.

Why EDI is important for 3PL Companies?

3PL companies exchange thousands of documents every day and this number can be significantly higher during the holiday season. It’s impossible to handle this level of document processing using manual paper-based processing or relying on faxes, mailing, or emails can cause significant delays in order processing and affect the entire supply chain operations.

EDI helps 3PL providers to send and receive high volumes of data in a standardized EDI document and helps share information fast and securely. EDI helps 3PL companies to automate order processing and warehouse inventory management. Improves trading partner relationships and enhances supply chain predictability.

EDI provides 3PL companies with valuable information about the date of shipments, the number of goods, where they should be delivered, information on packaging, their sizes, and more. This information ensures that there are minimal/no delays in processing the package/order.

To automate this entire process of data exchange, 3PL providers and product suppliers integrate EDI solutions into the existing internal business systems and this eliminates the manual data entry into ERP or accounting, or other business systems.

How 3PL service provider helps retailers and brand manufacturers in the order fulfillment process

Let’s take an example of a real-time scenario,

Say you are the brand manufacturer and taking orders from retailers. Here are the steps that take place during the order fulfillment,

EDI 850 - Purchase Order

Step 1 – The transaction begins when a retailer sends you a purchase order (EDI 850)

EDI 940 - Warehouse Shipping Order

Step 2 – You now need to fulfill this order from your warehouse or from a 3PL. If you are using 3PL, you will send EDI 940 (warehouse shipping order) to your 3PL asking for the order to be fulfilled.

EDI 856 - Ship Notice Manifest

Step 3 – Once 3PL fulfills the order, they send EDI 856 (ship notice manifest) on your behalf to the retailer indicating that the shipment has left the warehouse

EDI 945 - Warehouse Shipping Advice

Step 4 – Then 3PL providers will inform you (brand manufacturer) that the shipment has left the warehouse by sending you EDI 945 (warehouse shipping advice)

EDI 810 - Invoice

Step 5 – Once you receive the EDI 945 from the 3PL provider, you can invoice the retailer with EDI 810 because now you have confirmation that the product has been shipped

EDI also helps brand manufacturers and 3PL providers with stock transfer transactions

It’s important that the 3PL provider is stocked with products to meet the customer demands

EDI 943 - warehouse stock transfer inventory advice

Step 1 – Brand manufacturers can send EDI 943 (warehouse stock transfer inventory advice) to their 3PL provider informing them about the upcoming inventory and when it will be delivered

EDI 944 warehouse stock transfer receipt advice

Step 2 – Then similarly 3PL provider can send EDI 944 (warehouse stock transfer receipt advice) to notify the brand manufacturers that the inventory has been received and can include any adjustments to the original EDI 943 due to potential damaged or missing products.

Benefits of using EDI for 3PL companies

EDI helps scale your 3PL business

Adding new brand manufacturers is easy and can help build strong business relationships.

Saves Time

Using EDI your document processing time is faster and now you can exchange data in minutes and thus saving you lots of time

Improve cash flow

EDI eliminates manual processing and automates your entire order and invoice processing thus reducing invoice delays and improving your overall cash flow

Automation

EDI automates your data processing and can directly transfer and convert data into various formats/standards directly to and from your internal business systems and eliminating the manual work

Smart Inventory Management

Manage inventory and margins more effectively

Shipment notices are on time and accurate, reducing chargebacks

Most chargebacks are due to late or incorrect advance ship notices (ASNs) using 3PL suppliers can ship inventory faster and ensure accuracy and thus avoid chargebacks.

How Commport EDI solutions can help your 3PL business

Trust our Commport experts for your EDI needs,

Nestled within the niche EDI industry, Commport Communications has provided valuable and exceptional service to its customers for over three decades. We operate not only as an EDI Translation company but also as a VAN (Value Added Network). Using specialized translation software, Commport can translate any file type to EDI X12 standard, as well as EDIFACT, and due to our global reach, Commport has interconnected with VANs worldwide.

With a 99.99% uptime and full redundancy, Commport’s network infrastructure makes it one of the most reliable EDI companies in the industry. Our commitment to network security and stability has led to major investments in security enhancements to ensure the privacy of our customers’ data. Unlike many of the big-box EDI providers, we at Commport are proud to remain family owned and continue to own and operate our data center in-house.

With our fast and seamless onboarding process, you can rest assured that we will schedule the required trading relationships, with the mandatory EDI transactions, in a short period of time. Our comprehensive EDI solution is also capable of generating UCC-128/MH10 labels, as well as reports such as packing slips and pick lists. Our focus is to deliver the data you require to move your goods in a quick and efficient way.

For over thirty years, Commport’s philosophy has been centered around making our customer’s business more efficient through the products, services, and support. Commport continues to scale the peaks of the EDI industry in terms of Customer Service, offering dedicated 24/7 service in multiple languages. And as a bonus, we offer some of the most competitive rates in the industry.

Let Commport take your business to the next level because making your business more efficient is our business.

See how Commport for 3Pls can transform your business operations

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Commport EDI Solutions

Frequently Asked Questions

What is EDI, and how does it benefit 3PL providers?

Electronic Data Interchange (EDI) is the automated exchange of business documents between trading partners in a standardized electronic format. For 3PL providers, EDI offers streamlined communication with clients, suppliers, and carriers. It facilitates real-time sharing of shipment details, order information, inventory levels, and invoices, leading to faster and more accurate logistics operations.

How does EDI improve collaboration between 3PL providers and their clients?

Can EDI help 3PL providers optimize inventory management?

How does EDI benefit the transportation and shipping aspects of 3PL operations?

EDI streamlines transportation and shipping processes by automating communication with carriers and freight forwarders. It facilitates electronic booking, tracking, and scheduling of shipments, reducing manual paperwork and phone calls. EDI also enables real-time monitoring of transit times, delivery confirmations, and potential delays, allowing 3PL providers to proactively address issues.

Can EDI help 3PL providers comply with industry regulations and standards?

How EDI is used in the Retail Industry?

Introduction to EDI in the retail industry

For over 40+ years the retail industry has been using EDI to replace its paper-based system and started exchanging documents like purchase orders, invoices, and ship notices with their suppliers/business partners using EDI. Retail businesses usually exchange high volumes of order data and EDI solutions can help in exchanging this large volume of data in a standardized format to improve operational efficiency and reduce the turnaround time to process orders. It also helps them to keep track of inventory management and provide more visibility into the supply chain and provide better customer support.

The retail industry uses EDI in 3 stages,

Procurement
Shipping
Invoicing

1. Procurement

Procurement is the method of purchasing goods or services, typically for business purposes. During the procurement process, the retail industry uses EDI to exchange purchase orders (EDI 850) and purchase order acknowledgments (EDI 855). The buyer/retailer sends a purchase order to the supplier and the supplier then sends the purchase order acknowledgment back to the buyer/retailer.

2. Shipping

Logistics/shipping plays a big part in the retail supply chain. In this stage, the supplier sends the advance ship notice (EDI 856) to the buyer/retailer. The advance ship notice (ASN) provides the buyer with information like what is being sent in each package when it’ll be sent, by whom, and more. ASN plays a very important role can help retailers relieve stock congestion and reduce check-in times.

“According to the research from the Grocery Manufacturers of America, ASNs slash receiving times by up to 60% if just one part of deliveries uses automated ASNs, a 250-store company can save 65,000 receiving hours each year.”

The ASN can ensure that every step of the supply chain is fully informed of the status of the goods.

3. Invoicing

In the final stage, the supplier issues an EDI invoice (EDI 810) to request payments for products delivered. EDI 810 document consists of invoice details like invoice number, date, shipping details, payment terms, and item information like information including prices and quantities, discounts, and more. To this, the retailer will respond back with EDI remittance advice (EDI 820) and sends it to the supplier to confirm payment

Benefits of EDI in the Retail Industry

Reduce transaction times

In contrast to the manual paper-based system, EDI messages can be exchanged in seconds, which leads to faster invoice processing and improved cash flows. By using EDI solutions buyers/retailers can receive EDI invoices directly into their accounting software so they can process them quickly and efficiently.

Reduce costly errors, avoid delays, and saves costs

Manual processing is prone to Invoicing errors and can be costly leading to charge backs from retailers. Also, errors in documents can cause delays in shipments and goods receivable disrupting the supply chain. However, by using an effective EDI solution you can reduce all these costly errors, improve operational efficiency, and save thousands of dollars.

Expand your fulfillment Models

Support eCommerce growth and create a seamless consumer experience across channels using standardized EDI transactions.

Simply order management and improve warehouse efficiency

Get EDI order information from suppliers and gain visibility into whether suppliers can fulfill orders in full and on time. By receiving automated ASNs from suppliers you can move your inventory efficiently through your supply chain and plan better warehouse management, which in turn improves warehouse operational efficiency.

Automation

With EDI you can automate your entire supply chain cycle. From procurement, shipping, and order management. On boarding your suppliers to EDI will enable a consistent order fulfillment process.

Improve supplier efficiency

EDI can help retailers gain visibility into order management which means which suppliers are delivering orders on time, correctly, and quickly and which are not. With this type of data, retailers can make changes if certain suppliers just aren’t cutting it. This type of insight would take months to discover without an EDI system.

Effective product management and bust trends

Gain visibility into product performance. EDI can help retailers help identify trending products i.e., which products are selling like hotcakes, and which are not. This will help retailers adjust inventory supplies accordingly.

Increase sales with drop shipping

Drop shipping is a process of providing goods directly from manufacturers to retailers or customers. If a retailer provides an option to its customers to order products online via its eCommerce store, instead of storing the inventory in the retailer warehouse, with the help of EDI it can send the same order information to its supplier and ask the supplier to fulfill the order directly to its customer from their warehouse. In this way, retailers can save time and save storage space by not storing the inventory and processing orders faster for its customers. All this can happen with an effective EDI system.

Common EDI X12 Transaction Codes Used in Retail Industry

EDI X12 Transaction Number	EDI Transaction Name / Document Type
EDI 180	Return Merchandise Authorization and Notification	Read More
EDI 290	Cooperative Advertising Agreements	Read More
EDI 810	Invoice	Read More
EDI 816	Organizational Relationships	Read More
EDI 832	Price/Sales Catalog	Read More
EDI 846	Inventory Inquiry/Advice	Read More
EDI 850	Purchase Order	Read More
EDI 855	Purchase Order Acknowledgment	Read More
EDI 856	Ship Notice/Manifest	Read More
EDI 857	Shipment and Billing Notice	Read More
EDI 860	Purchase Order Change Request - Buyer Initiated	Read More
EDI 865	Purchase Order Change Acknowledgement/Request – Seller Initiated	Read More
EDI 869	Order Status Inquiry	Read More
EDI 870	Order Status Report	Read More
EDI 875	Grocery Product Purchase Order	Read More
EDI 876	Grocery Products Purchase Order Change	Read More
EDI 877	Manufacturer Coupon Family Code Structure	Read More
EDI 880	Grocery Products Invoice	Read More
EDI 881	Manufacturer Coupon Redemption Detail	Read More
EDI 885	Retail Account Characteristics	Read More
EDI 887	Coupon Notification	Read More
EDI 888	Item Maintenance	Read More

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Frequently Asked Questions

What is EDI, and how is it utilized in the retail industry?

How does EDI facilitate order processing in the retail sector?

Can EDI help retailers improve inventory management?

Yes, EDI enhances inventory management by providing real-time visibility into stock levels, reorder points, and demand forecasts. Retailers can share accurate inventory data with suppliers, allowing for just-in-time restocking and minimizing stockouts. EDI also supports advanced shipping notices (ASNs), notifying retailers about incoming shipments and aiding in efficient inventory planning.

How is EDI used in managing product information and catalog updates?

What are the benefits of EDI for retail partners and the overall supply chain?