If you’re reading this blog, odds are high that you’re already using EDI in key areas of your organization. So you know how EDI can save money by avoiding fines, re-work, and time lost to manual processes.
But did you know there are 300 ANSI X12 EDI transaction sets for industry, government, and education? This means odds are also good that you can increase those savings by expanding the EDI transaction sets your organization uses.
The first step is to understand the range of transaction sets available.
From there, you would review the ones you’re currently using. Then you can look at the transaction sets you’re not using and think about where you may be able to implement some of them.
Keep in mind your EDI software vendor may offer access to libraries of different EDI standards and transaction sets if you can’t locate a particular standard or transaction set in your software (the same applies to transactions complying with EDIFACT, ODETTE, TRADACOMS, etc.).
Key Takeaways:
- Overview of EDI Transaction Sets
- Most Frequently Used Transaction Sets
- Examples of Overlooked Transaction Sets
- Why it Makes Sense to Review Your Inventory of EDI Transaction Sets
What Are EDI Transaction Sets?
Getting investments approved to expand EDI can be tricky. It means explaining how EDI works to stakeholders who may or may not have any idea of what EDI is.
We advise customers to keep it simple. Focus on how EDI delivers value.
Up through the late 20th century (and beyond in some places) humans filled out, read, and exchanged forms the same way for thousands of years. Slowly and manually.
EDI changed all that. EDI allows computers to exchange documents automatically. This saves time. It prevents mistakes. It keeps businesses from automotive manufacturers to sneaker chains to hospitals running smoothly.
As you’ll see in the example below, transaction sets work together in back-and-forth business dialogue. This dialogue is how EDI delivers efficiencies and value—for example the 810 (Invoice) and the 820 (Payment Order/Remittance advice.
In addition to the universal transaction sets, certain industries use document types that apply to their unique business needs. For example, the grocery industry uses the 875 (Grocery Products Purchase Order) and the 880 (Grocery Products Invoice). Logistics uses the 940 (Warehouse Shipping Order) and the 945 (Warehouse Shipping Advice).
What Are the Most Commonly Used EDI Transaction Sets?
810 Invoice In modern supply chains, the 810’s superpower is the ability to accelerate payment cycles. This improves cash flows. By sending automatically, it avoids the delays of sending invoices attached to an email, by fax, or snail mail (which some companies still do).
850 Purchase OrderThe 850 streamlines procurement processes by eliminating paper-based orders and reduces errors and miscommunications. Also creates an audit trail for orders.
853 Routing and Carrier Instruction Reduces delivery delays and errors by standardizing transportation details and helps manage compliance with retailer-specific shipping requirements.
855 Purchase Order Acknowledgement Reduces costly errors by catching discrepancies early while providing transparency and building trust between trading partners.
856 Advance Shipping Notice (ASN) Allows receiving teams to prepare for incoming shipments, speeding up unloading and inventory updates. ASNs also improve visibility into supply chain events and can help avoid errors and delays.
940 Warehouse Shipping Order Automates communication with third-party warehouses which reduces manual processes and minimizes shipping errors by clearly specifying fulfillment requirements.
943 Warehouse Stock Transfer Shipment Advice Notifies the receiving warehouse that inventory is on its way during a transfer between locations. Ensures accurate inventory reconciliation by tracking stock transfers and supports multi-location inventory strategies for scalability and distribution.
944 Warehouse Stock Transfer Receipt Advice The 944 validates inventory accuracy post-transfer, which prevents discrepancies and enhances inventory control by resolving shortage or overage issues immediately.
945 Warehouse Shipping Advice Confirms the warehouse has shipped the requested goods while providing critical shipment details such as quantities, tracking numbers, and carriers. The 944 also helps reconcile shipments with ASNs (856) and invoices (810) and can reduce disputes by serving as proof of shipment.
What Are the Most Overlooked Transaction Sets?
The following document types don’t receive as much attention as those in the previous section. But they’re built to streamline and automate supply chain communications between trading partners. As well as reduce the potential for errors and downstream delays in shipping and payment delays.
If you’re not already using these maps, you might want to consider implementing them to keep pace with those that are:
816 Organization Relationships This document type communicates organizational relationships between headquarters, branches, and warehouses. It lets trading partners share location information including addresses and site codes. It's valuable because keeping trading partners updated about location changes (e.g., new warehouses and closed stores), helps ensure accurate routing and billing.
820 Payment Order/Remittance Advice The 820 contains key details for payments to suppliers and vendors such as amount and invoice number, and explains to what invoices or accounts they want the payment applied. It replaces paper checks and manual reconciliation which shrinks processing time, and potentially, payment cycles.
824 Application Advice This document type provides feedback about errors or acceptance of an EDI transaction by identifying specific issues or confirmations. It impacts the bottom line by pinpointing issues quickly and reducing processing delays.
864 Text Message Not a text message in the mobile phone sense, but unstructured text rather than the pre-defined fields of other document types. It communicates freeform messages like explanations, warnings, or special instructions. Users can receive it via email or dashboard alerts within the EDI system.
Let’s look at an example of these transaction sets working together to keep supply chains flowing seamlessly.
Let’s say MassiveMart (MM) opens a new distribution center (DC). How do they inform partners and suppliers about the new location in the most efficient way?
Step 1. MM sends an 816 to communicate the new DC location, with the new address and site code.
Orders start flowing into suppliers.
Step 2. Supply Co. processes an 810 for the order, but MM rejects it due to a mismatch in location codes.
Step 3. MM sends Supply Co. an 824 that explains why they rejected the invoice. MM also sends an 864 with instructions on how to fix the problem, "New DC location code ABC123 was added on 01/01/2024. Update your system and resend the invoice."
Step 4. After receiving these automatic updates, Supply Co. updates its mater data.
Step 5. Supply Co. resends the 810, and MM accepts the invoice and processes it for payment, sending an 820 to Supply Co. and/or their bank, alerting them that payment will be coming via ACH.
In this example, these document types worked together to resolve the payment issue before it became a problem—without having to claim the time and attention of anyone from sales, shipping, or accounting.
Why Should You Review the Transaction Sets You Currently Use?
Even the most EDI-invested organizations probably have departments or functions that still rely on manual processes. They may not feel that lower volume/infrequent instance types of transactions might not warrant the ROI to implement EDI.
Still other organizations may only implement the minimal number of EDI transaction sets as required by trading partners.
That said, we have entered the era of hyper-competition along with increased pricing visibility and pressure on margins. Enterprises that continue to rely on manual processes increase their costs and become less competitive.
For growth-minded organizations, expanding EDI transaction sets can boost productivity and reduce back-office expenses associated with purchasing and production.
