EDI (electronic data interchange) is how many large buyers exchange business documents with their suppliers: purchase orders, ship notices and invoices, sent computer to computer in a standard format instead of by email or fax. If a large retail chain or a national foodservice account wants to buy from you, EDI may be written into their supplier requirements. This is what to expect, and what to check, before you commit.
The documents you will see
In the United States, most trading partners use the ANSI X12 standard, where each document type has a number. The core ones for a distributor:
| Number | Document | Sent by | What it does |
|---|---|---|---|
| 850 | Purchase order | The buyer | The order: items, quantities, prices, ship-to and dates |
| 855 | Purchase order acknowledgment | You | Confirms the order, or changes or rejects lines |
| 856 | Advance ship notice (ASN) | You | What is actually on the truck, often pallet by pallet |
| 810 | Invoice | You | The bill, which the buyer checks against the order and the receipt |
| 997 | Functional acknowledgment | Both sides | Confirms a document arrived and could be read |
Some partners also use others, such as the 832 (price and item catalogue), 846 (inventory advice) and 820 (payment and remittance advice). Each partner's EDI guide lists exactly which documents they require and which fields they expect in each one.
Why the ship notice is the hard part
The 850 and the 810 are mostly about mapping the data correctly once. The 856 is different. It has to describe exactly what left your dock, and it usually has to arrive before the truck does. Many buyers receive against it by scanning pallet labels, so the ship notice and the labels must agree. That often means GS1-128 shipping labels carrying a serial shipping container code (SSCC) on each pallet.
An accurate ship notice depends on an accurate pick. If shorts and substitutions are not recorded at the time of picking, the notice will promise goods that are not on the truck. Many retailers charge suppliers back for late or inaccurate ship notices, so read the compliance section of each partner's guide closely.
The invoice has to match
The buyer's accounts payable team, or their software, checks your 810 against their 850 and what they received, much like a three-way match. A price that differs from the PO, units that do not line up (case versus each), or a catch-weight line invoiced at the wrong weight can get the invoice held or short-paid. Agree in advance how variable-weight items will be ordered and invoiced.
Three ways to connect
| Approach | How it works | Suits | Watch for |
|---|---|---|---|
| Web EDI portal | You key orders and invoices into a provider's website, which sends the EDI for you | One partner, low volume | Double entry and typing errors grow with volume |
| EDI provider connected to your ERP | A translator or managed service turns EDI into files or API calls your ERP can read, and back again | Several partners, steady volume | Another vendor, mapping for each partner, and two systems to keep in step |
| EDI built into the ERP | The ERP reads and writes the documents itself, often still using a network provider for delivery | Many partners, high volume | Often a higher tier; check which partners and documents are actually supported |
Documents travel between companies either through a value-added network (VAN), which works like a post office for EDI, or directly over the internet using a protocol such as AS2. Your trading partner usually decides which.
What good EDI support looks like
- Partner mapping you can see. Each partner's item numbers, units and required fields mapped to yours, with a clear list of what is set up.
- An exception queue. A failed or rejected document lands in front of a person with a clear error. It is never silently dropped.
- Acknowledgments tracked. You can see which documents were acknowledged and which are still waiting.
- A full history. Every document sent and received, with times and control numbers, so a dispute can be settled from the record.
- Testing. A way to exchange test documents with a new partner before going live.
Questions to ask before you commit
- Which of our partners and which document types are already supported, and which need new mapping?
- Who builds and maintains each partner's mapping, and what does adding a partner cost?
- How does an 850 become an order in our system, and what happens to a line with an item number we do not recognise?
- Where does the 856 get its contents: from the pick record, or from someone typing it in?
- How are variable-weight items and case-versus-each units handled on the 810?
- What is charged per partner, per document or per month, and what is included?
- Who do we call when a document fails at night?
Count the full cost
EDI pricing varies a lot by provider and model. Compare the whole picture, not the monthly fee: setup for each partner, document or volume charges, network fees, the time to map each new partner, the staff time to work the exception queue, and the chargebacks you may pay while you learn. A large account can be worth all of it. Just know the number before you sign the supplier agreement. If EDI is one of several systems you are connecting, see building a tech stack.