Types of EDI Documents and Their Uses in Business

October 25, 2024
Electronic Data Interchange (EDI) enables the standardised exchange of business documents between organisations. Each type of EDI document serves a specific purpose, from ordering goods to processing payments. Understanding these documents and their functions can help businesses use EDI more effectively.
Overview of Essential EDI Documents
Various EDI documents facilitate business transactions by automating data exchange. Below are some of the most commonly used EDI documents and their roles in business operations.
Purchase Order (PO)
A Purchase Order is one of the most widely used EDI documents. It allows buyers to place orders electronically, streamlining the purchasing process and reducing the likelihood of errors associated with manual orders.
Advanced Shipping Notice (ASN)
The ASN informs the buyer that a shipment is on its way. It includes details about the shipment, such as contents, packaging, and expected arrival times, allowing the recipient to prepare for the delivery.
Invoice
An Invoice is sent from the supplier to the buyer, detailing the amount owed for goods or services delivered. EDI invoices ensure accuracy and speed in the billing process, reducing payment delays and improving cash flow.
Key EDI Document Types and Their Functions
Document Type | Function |
Purchase Order (PO) | Initiates an order from the buyer to the supplier |
Advanced Shipping Notice (ASN) | Notifies the buyer of an incoming shipment |
Invoice | Requests payment from the buyer for delivered goods |
Order Acknowledgment | Confirms the details of the order |
Inventory Inquiry/Advice | Provides inventory status and availability |
Frequently Asked Questions
What are EDI document types?
EDI document types refer to standardized formats used to electronically exchange business documents such as orders, shipping notices, and invoices between companies.
How is a Purchase Order different from an Invoice in EDI?
A Purchase Order initiates the transaction by placing an order for goods or services, while an Invoice requests payment once the goods or services have been delivered.
Related Articles
To explore more about EDI’s role in business transactions, check out these related articles:
- What is EDI? A Beginner’s Guide to Electronic Data Interchange – An introduction to EDI and its applications.
- The Benefits of EDI for UK Businesses – Learn how EDI streamlines processes, reduces errors, and enhances business efficiency.
- EDI Integration with ERP Systems: What You Need to Know – Discover how integrating EDI with ERP systems enhances workflow automation.
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