When dealing with data, and all related terminology, you may feel like you’re trying to speak a foreign language. In the interest of keeping things clear and simple, we will introduce commonly-used terms in our IDEA Dictionary series to help you navigate the data shorthand and learn the lingo. This week, we bring you: EDI transaction sets.
Let’s start from the beginning. What is EDI?
EDI stands for Electronic Data Interchange, which is the computer-to-computer communication method that allows companies to electronically exchange business documents in a standard format. Essentially, EDI is a fast, paperless way to send and receive various documents.
What are EDI transaction sets?
In the EDI language, a single business document, such as an invoice or a purchase order, is called a “transaction set”. To clarify, each paper document used for a specific organizational function has its EDI equivalent – its corresponding EDI transaction set. Every existing transaction set is assigned a three-digit number that helps identify what that EDI document is. For example, in EDI vocabulary, a simple invoice is known as EDI 810, a warehouse shipping order is EDI 940, and EDI 820 indicates a payment order. In total, there are close to 900 different EDI transaction sets.
What are the most commonly used EDI transaction sets?
EDI encompasses many fields from construction to engineering to medicine to transportation, etc. While some EDI transaction sets are unique to a particular industry (e.g., EDI 275 – patient information, used by healthcare facilities and medical insurance companies), many EDI transaction sets are used across multiple industries.
For EDI newbies, which transaction sets should you focus on first?
If you are new to EDI in the electrical industry, the most productive first step would be to use EDI to address those areas of business that are most time-consuming and labor-intensive – which is usually the quote-to-cash process (order entry, invoicing, etc.). The typical first transaction sets – or document types – that EDI newbies use include the EDI purchase order, the EDI purchase order acknowledgement, the EDI advanced shipment notification, and the EDI invoice. If you are just starting to integrate EDI in your business processes, these four basic transaction sets will give you the biggest bang for your buck while also providing a great exposure to how EDI can improve your company’s operations.