810 Invoice in Electronic Data Interchange
810 Invoice is one of the basic and mostly used EDI transactions. Information can be transferred between different companies using 810 Invoice. This enables a vendor to transfer invoice information electronically instead of in the form of a printed paper invoice. 810 Invoice has the following advantages:
- Fast data transfer
- Prevention of input errors when manually entering invoices
The 810 Invoice contains a lot of the same data that is on the Purchase Order. It also contains the shipping quantities, prices, and date information. In order for the EDI 810 Invoice process to be really valuable, a system should exist that will help create a turn around Invoice from the Purchase Order.
810 Invoice example
The example below is a turn-around Invoice from the Purchase Order example from our previous post:
The invoice example above is a turn-around from the PO example above. It is easy to notice how exactly everything matches the originally sent PO. For example, the Purchase Order indicated in the ITD segment that the invoice terms are NET 60 Days. The same ITD segment was sent back on the invoice.
The EDI invoice is often considered the highest pay-off transaction of the EDI system. The costs alone associated with handling a manual paper transaction are significant. When a company receives a paper invoice via fax or traditional mail, the company goes through a long process of sorting out the faxes and distributing the invoices accordingly to the Accounts Payable departments. Once the AP clerk receives the Fax Invoice, that clerk must find the time to actually input the invoice into the system. With EDI invoicing being integrated into the Accounts Payable process there would be no human intervention at all and the invoice could be processed automatically and immediately (except maybe for exceptions arise). EDI reduces potential of errors on the invoices; it costs 4 times as much to process an erroneous invoice than it does a correct one.
The EDI 810 Invoice may sometimes be referred to as 811 – Consolidated Invoice (often found in the telecommunications industry) and 110 – Air Freight Invoice (used by companies like FedEx, DHL, UPS).