EDI 810 is an essential component of modern trading operations. Thanks to EDI 810 documents, the payment process for shipping orders can be fulfilled simply and intuitively, allowing trading partners to do business faster and more comfortably.
What is EDI 810?
An EDI 810 is an electronic data interchange (EDI) transaction code. The purpose of an EDI 810 document is to allow a seller to request payment from a buyer. An EDI solution enables businesses to exchange electronic supply chain data without paper, email, or PDF invoices.
The American National Standards Institute (ANSI) regulates the EDI 810 format standard alongside other EDI documentation. The regulations placed by the ANSI state that EDI 810 documents must follow the X12 format. The EDI X12 810 standards manual comprises a set of rules that dictate the specific syntax for structuring EDI documentation and the methods trading partners can use to transfer EDI documents. Outside of North America, the EDIFACT format is used instead.
An 810 EDI document type can be used when processing various orders. In contrast, other EDI documents, such as EDI 210, EDI 880, and EDI 894 invoices, are only helpful for specific transactions.
What are the essential components of EDI 810?
An EDI 810 invoice contains the same information one can expect in a paper-based invoice document. It is required for an EDI invoice to include specific details about every order.
Invoice details that may be found on an EDI 810 document include the following:
- The invoice number and date;
- The identification details of the buyer, seller, and remittance;
- The order details. These must incorporate product quantities and prices;
- Additional charges, discounts, and allowances;
- The total amount due;
- The acceptable payment methods;
- The payment terms;
- Tax details (where applicable).
What are the benefits of EDI 810?
The main benefit of EDI-type documents like EDI 810 is that they offer a more secure and reliable communication method than email, fax, or paper documents. Additionally, EDI documents substantially speed up business transactions.
Shortening the supply chain
The implementation of EDI allows trading partners to send and receive documents at high levels of accuracy and speed. This will enable organizations to considerably streamline their document management processes, as the software handles automated EDI documents in the blink of an eye.
Additionally, through EDI, companies obtain real-time information that can be used for better business planning, such as what merchandise they are yet to receive and how much merchandise they should buy. EDI information can be implemented into decision-making to make more accurate assessments.
Increasing transaction accuracy
By using the EDI 810 electronic invoice process, payment procedures can be handled considerably faster and more accurately, allowing for quick reconciliation. Moreover, the invoice discrepancies caused by human error in paper invoices are avoided thanks to automation.
EDI documentation automates the data exchange between the business systems of different organizations. This makes it easier and cheaper to do business. Automated invoices provide a fast avenue for scalability and can significantly drive business growth.
Expanding a company’s market reach
Instead of manually handling every invoice message, companies can do business without worrying about any physical paperwork. Businesses that use EDI documents can increase their productivity without increasing their staff.
Because EDI is an industry-standard format, companies implementing it can start working with partners internationally without connecting business systems for communication. Companies can thus increase the size of their operations without worrying about the time, effort, and overhead costs related to linking systems.
By removing paper from the equation, paper-related business expenses such as printing, storage, postage, and the sort are also eliminated. As almost no real work is put into the invoice transaction process, it will be more cost-effective to do business with more trading partners.
Improving communication with trading partners
EDI can help a company maintain stable customer and supplier relationships by providing smooth transaction experiences. The standard facilitates the collaboration between trading partners and eliminates any friction caused by carelessness when handling documents traditionally.
All EDI documentation is encrypted, making it more reliable than other options, such as emails, which can be easily altered. Moreover, EDI can be used to keep an accurate invoice record, permitting the documents to serve a second purpose as a verification tool against fraud and evasion.
How to send and receive an EDI 810?
An EDI 810 invoice transaction can only be performed digitally. EDI documents are strictly formatted digital messages that can only be read after being decrypted by specialized computer software.
The exchange of EDI 810 documents is handled using private, agreed-on communication channels. In-house documents are translated into standard formats by computers without the need for any human intervention.
Conventional, paper-based invoice documents require that trading partners confirm the integrity of invoice details by hand. Document types may also differ depending on the company that issues them. On the other hand, EDI documents are delivered, verified, and stored automatically by the software. A document that carries information in an EDI format is known as a transaction set (T-Set) or a message.
Typically, an EDI software solution consists of translation software, mapping software, and integration with communication software. The purpose of EDI mapping software is to configure how files will be translated and delivered. Electronic invoice information like shipping details and invoice payment terms must be fully configured only once, as the mapping software will automatically use the provided information to perform the process on future orders.
While EDI was initially designed to transfer information without communication technologies, modern organizations prefer a communication method such as a value-added network (VAN). A VAN is a secure private network that transmits messages like an email solution. VAN providers will manage the support and maintenance of the application while also providing users with additional perks such as data backups and mapping.
How is the EDI 810 invoice used?
An EDI 810 invoice is sent by a seller to a buyer after the shipment of an order. The purpose of an EDI 810 document is to confirm the delivery of the order and request payment from the buyer. Typically, EDI 810 documents are sent by manufacturers or distributors to retailers. Upon receipt of an EDI 810 invoice, the buying party must confirm its successful delivery with an EDI 997 Functional Acknowledgement.
Buyers must confirm that the invoice details are correct and then transfer the invoice to their accounting/receivables department to issue payment. Once all the information has been verified as accurate, the buyer can issue an EDI 820 Payment Order or Remittance Advice Document to the seller. These documents will provide the seller with the payment details.
EDI 810 specification
EDI 810 invoices issued in North America are predominantly formatted using the ANSI Accredited Standards Committee (ASC) X12 standard. This is an industry-standard specified format to provide EDI billing transactions.
Outside of North America, the UN/EDIFACT standard is the most common EDI standard for EDI 810 documents. The United Nations/Electronic Data Interchange for Administration, Commerce, and Transport (UN/EDIFACT) is an international EDI standard developed for the United Nations. The ASC X12 standard can also contribute to UN/EDIFACT messages.
EDI format example
A typical EDI 810 invoice transaction includes the following information:
- ISA – Interchange Control Header: Here, one can find the Sender1 and Receiver1 IDs, the authorization and security information, and the ANSI x12 version used to format the document.
- GS – Functional Group Header: This part contains the Sender1 and Receiver1 codes, as well as the date and time of the exchange.
- ST – Transaction Set Header: The type of EDI document is specified here. If the EDI is an EDI 810, this area will display that information.
- BIG Segment: The values here represent the creation date, the purchase order, and the invoice number.
- N1 Segment: The name and address information is found here.
- IT Segment: This section contains information about the item. This includes information like the quantity invoiced and the unit price and other relevant data such as the unit of measurement.
- DTM Qualifier: This is the date and time the shipment leaves the supplier.
- SAC: Information about the service, promotion, allowance, and relevant charges can be found here.
- TDS Segment: This is the total invoice amount.
- CTT Segment: This value represents the transaction totals.
- SE Segment: This area is used to identify the number of segments between ST and SE.
- GE Segment: This space is related to the functional group trailer. The number of transaction sets included is specified here.
- IEA Segment: Here is the number of functional groups in the transmission. It is known as an interchange control header.
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