Electronic Data Interchange (EDI) Wholesale Transactions Guide
Wholesale companies wear many hats. Whether it’s managing processes for order to cash, procure to pay, and load tender to invoice, or ensuring they’ve got the right amount of trucks within the company fleet, there are endless responsibilities. But those responsibilities don’t have to be problems. With the right kind of modernized EDI technology in place, wholesalers are able to thrive rather than struggle.
What is EDI?
Electronic data interchange (EDI) is a technology that has been around for quite some time now. It is the foundation that many businesses rely on in order to better serve their customers, trading partners, and other members of a digital ecosystem. Companies use EDI to exchange business documents digitally through a standardized format. EDI connects directly from one business to another through e-commerce platforms or ERP systems.
The most common type of digitally transmitted documents are purchase orders, invoices, and advanced shipping notices. EDI is so widely used because it provides reliable communications that all companies, no matter the industry, require.
History of EDI in Wholesale
Wholesalers need technology that allows them to onboard trading partners and applications quicker, as well as reduce TCO and resolve any potential issues instantly. When wholesalers are connecting with customers (B2B or even B2C) they must be able to send and receive invoices electronically, provide order and shipping confirmations, as well as manage all of their products in standard formats that are transparent.
As you can see, that is a lot for wholesalers to manage, simply to conduct everyday business. That’s what makes EDI such a useful and powerful tool, because it remains the de-facto standard for B2B companies. But savvy wholesalers are going one step further than that, and embracing a modern EDI integration platform because it helps them become that much more agile and responsive than they’ve ever been before.
Advantages to Using EDI in Wholesale
Utilizing modern EDI technology allows wholesalers to optimize their digital value chain by turning innovative integration into a true competitive advantage. By instrumenting leaner and more-efficient inventory purchasing, storage, and distribution built on integration control and actionable insight to manage and deliver value to customers across the supply chain.
Being able to design and build EDI and API-based integrations to all the members of a digital ecosystem on a single platform allows wholesalers to refine their supply chain and enable distribution channels and improve customer expectations through choice, control, and credibility.
Frequently Used EDI Transactions for Wholesale
There are many recurring EDI transactions that wholesalers are managing on a daily basis. Those transactions include:
EDI 810 - Invoice
- Sent by a wholesaler to the customer in order to bill for goods ordered and services provided
EDI 830 – Planning Schedule/Material Release
- Sent by a wholesaler to communicate with suppliers. EDI 830 provides forecast data for upcoming orders that helps a supplier manage materials and labor to fulfill orders automatically based on the wholesaler’s inventory levels
EDI 840 – Request for Quotation
- Sent by a wholesaler to request information regarding price, delivery schedule, and any other items from sellers of goods and/or services
EDI 850 – Purchase Order
- Sent by a wholesaler to purchase materials and/or services from a supplier. An EDI 850 is generally designed to provide information on the item, price, and quantities ordered, shipping details, payment terms, and discounts
EDI 855 – Purchase Order Acknowledgment
- Sent by a wholesaler to confirm the successful reception of an EDI 850. The EDI 855 communicates whether the EDI 850 was accepted or rejected, or what changes may have been made to accept the order by the supplier or seller
EDI 856 – Advanced Ship Notice
- Sent or received by wholesalers as a notice of an impending physical receipt of material or goods from a supplier. EDI 856 can also be sent by a wholesaler in response to an EDI 850, EDI 830, or EDI 862 transaction
EDI 860 – Purchase Order Change
- Sent or received by a wholesaler to request a change to a purchase order. The EDI 860 is also utilized by buyers to confirm their acceptance of changes to a purchase order made by the original seller
EDI 861 – Receiving Advice/Acceptance Certificate File Format
- Sent by a wholesaler to report the receipt of shipments or as a formal acceptance of returned defective items
EDI 940 – Warehouse Shipping Schedule
- Sent to instruct remote warehouses to authorize a shipment to a buyer, such as a retailer. The EDI 940 can also be used to confirm a shipment
EDI 943 – Warehouse Stock Transfer Shipment Advice
- Sent by a manufacturer to a remote warehouse as an advanced shipping notice of a transfer shipment that has been made from the manufacturer
EDI 944 – Warehouse Receipt Advice
- Sent by a wholesaler to acknowledge a receipt of a shipment at the warehouse. The EDI 944 is typically sent following an EDI 943
EDI 945 – Warehouse Shipping Advice
- Sent by a wholesaler to provide confirmation of a shipment. Wholesalers utilize EDI 945 to notify a trading partner that a shipment was made
EDI 997 – Functional Acknowledgment
- Sent in response to an EDI 850, an EDI 997 notifies the sender that the document has arrived and was processed by the recipient
So while yes, wholesalers do have all kinds of different business processes and daily tasks they must stay on top of in order to remain ahead of competitors, modernized EDI technology makes that process much more efficient.