The point of Electronic Data Interchange (EDI) is to provide a standard “language” or format for exchanging business documents digitally instead of on paper. In this language, each business document corresponds to a single transaction set, which is referred to by a three-digit number.
For example, in the ANSI X12 EDI standard, the EDI 850 transaction set defines an electronic Purchase Order document, EDI 810 defines an electronic Invoice, EDI 856 is an Advance Ship notice (ASN) and EDI 820 is a Payment Order/Remittance Advice document. Each document is called a transaction set because it includes a set of data components in a very specific order and format. Keeping the order and format of the data consistent is what enables the receiving computer system to correctly interpret which component corresponds to the sender’s company name, which represents the invoice number, and so on.
Figure 1 below shows how a paper purchase order compares to an EDI 850 Purchase Order document.
Transaction set components
Digging a little deeper, each transaction set includes three types of components:
- Data elements are the individual items of data, such as company name, item number, item quantity and item price. Each EDI standard includes a definition for each data element within each transaction set, which specifies its data type (numeric, alphanumeric, date, time), its minimum and maximum allowable length, and any associated “code values” (e.g., a currency code element for prices).
- Segments are groups of data elements that logically relate to one another, like the item number, quantity, units and price associated with an item in an EDI 850 Purchase Order. A segment always begins with a segment ID, which specifies the type of data elements that make up the segment. Data elements within the segment are separated by a data element separator (an asterisk ‘*’ by default in the ANSI X12 EDI standard). Some segments are mandatory to include, while others are optional or conditional upon the inclusion of another segment or element. The EDI standard in use (most commonly ANSI in North America or EDIFACT elsewhere) defines all these specifics, as well as the sequence for segments and elements and whether a segment can be repeated. The right segments in the right order make up a transaction set.
- Envelopes enclose transaction sets for transmission purposes. Each transaction set goes in an individual message envelope, while a group of transaction sets (such as a group of invoices) go in a group envelope. All the group envelopes being transmitted go in an interchange envelope. Pairs of segments define the beginning and end of each envelope.
EDI 810 Invoice
The EDI 810 Invoice transaction set is an electronic version of the traditional paper invoice. Usually an EDI 810 document is sent in response to an EDI 850 Purchase Order document, to request payment once the goods specified in the PO are shipped. An EDI 810 often includes data like an invoice number and date, shipping information, item prices/quantities, any applicable discounts, terms of payment, etc.
EDI 820 Payment Order/Remittance Advice
The EDI 820 Payment Order/Remittance Advice transaction set is used to specify details on payment of an invoice. It enables suppliers to reconcile payments received against invoices issued. Often an EDI 820 accompanies the electronic transfer of funds, and may be incorporated into an ACH banking transaction. Businesses can use the EDI 820 to instruct a bank on transferring money to a payee, or to tell a supplier about an upcoming payment, especially if it includes changes or adjustments. An EDI 820 includes payer/payee information, invoice numbers, account IDs, billed and paid amounts and adjustments to a corresponding invoice.
EDI 850 Purchase Order
The EDI 850 Purchase Order transaction set is used to order goods and/or services. It corresponds to the traditional paper purchase order document, and provides information like items ordered and their quantities and prices, payment terms and shipping details. When a supplier who is EDI capable accepts an EDI 850 document, they usually send back a corresponding EDI 810 Invoice, and often also an EDI 856 Advance Ship Notice.
EDI 856 Advance Ship Notice
The EDI 856 Advance Ship Notice or ASN, also sometimes called a Ship Notice/Manifest, is increasingly important among EDI trading partners. It corresponds to the traditional printed packing slip. The EDI 856 provides advance details on the actual contents of a shipment from a supplier to its customer. Often an EDI 856 is sent in response to an EDI 850 document. It generally includes order information, destination data, a delivery schedule, PO numbers, item descriptions and quantities, packaging descriptions, carrier details and tracking numbers.
Different trading partners can specify different requirements for the EDI 856, making it one of the most complex transaction sets for suppliers to implement. Sometimes suppliers must provide data in ASNs that they weren’t collecting before, like the barcodes on cartons. Trading partners that require ASNs generally also require GS1-128 barcode labels, which work alongside the ASN and provide the supplier’s vendor number, ASN number and more. A top-tier vendor like TrueCommerce can work with you to ensure you meet each trading partner’s unique requirements for ASNs and all other electronic data interchange documents, as well as barcode labels.
Complying with trading partner requirements
Retailers and other trading partners that require suppliers to be EDI-capable will provide mapping specifications that spell out all the transaction sets they want suppliers to use, plus all the data elements and valid values, segments and any applicable business rules that suppliers must follow. These highly detailed and extensive specifications can be over 100 pages long.
Following is a sample of the ANSI X12 transaction sets required by a major retailer.
- 204 Motor Carrier Load Tender
- 214 Transportation Carrier Shipment Status Message
- 810 Invoice
- 846 Inventory Inquiry/Advice
- 850 Purchase Order
- 856 Ship Notice/Manifest - Pick and Pack
Different trading partners may require other transaction sets in addition to these. But no one trading partner will mandate that suppliers be able to send and receive all of the dozens of transaction sets that either the ANSI or EDIFACT EDI standard defines.
When you need to exchange documents electronically with a new trading partner, your EDI vendor should be able to provide you with the required mapping, so that compliance is quick and straightforward. Further, when your trading partners change their mapping requirements (which happens regularly), your vendor should provide an update automatically.
TrueCommerce supports whatever transaction codes you need, including all the codes defined by the ANSI ASC X12 EDI standard. We make it painless to send and receive whatever transaction sets your trading partners require. Our web-based solution automates backups, eliminates the hassle of updates, and integrates with your accounting software.