EDI Invoicing

EDI Invoicing: Basic Description and Terms

EDI Invoicing is one of the basic electronic operations in everyday business communication. EDI Invoicing is simply the process by which the vendor gets paid for the goods delivered using EDI facilities. Typically, the information sent in an Invoice is similar to the information passed in a Purchase Order. The Invoice additionally will send:

  • Invoice Identification information
  • Carrier Details
  • Invoice Shipment Summary
  • Invoice Monetary Amount

In retailing, the inbound Invoice may be used as a batch Invoice entry process where the Invoice will be moved into the Invoice application and then a retail Invoice clerk will manually check the Invoice against the original Purchase Order. The second use of the Invoice is to have the Invoice received and checked for differences against the original Purchase Order by the use of a program. The Invoice clerk would only be involved if there was a problem.

Typically, retailers who receive Invoices electronically will benefit from automating as many of the order processes as possible. The normal electronic process is to send Inventory Data via the EDI 852 Product Activity Data document. The Purchase Order is sent via an EDI 850 Purchase Order. The vendor acknowledges the Purchase Order by sending an EDI 855 Purchase Order Acknowledgment. Finally an EDI 810 Invoice is sent from the vendor to the retailer.

Some of the other EDI documents that can be used in the order/replenishment cycle are:

  • Price Sales Catalog (EDI 832) (vendor to retailer to specify changes to their Price Sales Catalog).
  • Planning Schedule (EDI 830) (retailer to vendor to specify forecast future merchandise requirements).
  • Purchase Order Change (EDI 860) (retailer response to a PO Acknowledgment with a change).
  • Purchase Order Change Acknowledgment (EDI 865) (vendor response to a PO Change).
  • Advanced Ship Notice (EDI 856) (from vendor to retailer to specify what is being delivered).
  • Payment Order/Remittance Advice (EDI 820) (from retailer to bank and vendor to specify payment of an Invoice).

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