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.
Electronic Data Interchange (EDI) is widely employed by commercial firms to initiate transactions with their financial services counterparties. EDI facilitates financial supply chain transactions like the direct deposit of payroll checks by employers, the direct debit of consumer accounts, and also the electronic payment of government taxes by businesses. With the increasing emphasis on security, the financial services industry has added variety of secure communication protocols together with the more common ones used for other industries.
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.
Benefits of EDI in 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
What is Electronic Data Interchange?
Electronic Data Interchange is the transfer of large amounts of information in a specified format between business partners. Here are the following ways EDI benefits your business:
Common EDI Transaction Codes for Financial Series (FIN)
|
EDI X12 Transaction Number |
EDI Transaction Name / Document Type |
|
EDI 248 |
Account Assignment/Inquiry and Service/Status |
|
Invoice |
|
|
EDI 811 |
Consolidated Service Invoice/Statement |
|
EDI 812 |
Credit/Debit Adjustment |
|
EDI 818 |
Commission Sales Report |
|
EDI 819 |
Operating Expense Statement |
|
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 |
Commport EDI Statistics
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