For a long time, the establishment of many successful business partnerships stems from the establishment of strong relationships. Fast forward to our digital modern society. In this era, many business relationships have been established or destroyed through digital technology. Although this centuries-old truth still exists, it has become more and more complicated.
This is most obvious in the world of EDI (Electronic Data Interchange). In particular, EDI deductions, that is, some companies impose financial penalties on suppliers who fail to maintain EDI in compliance with the agreed SLA (service level agreement), which in turn causes damage to the trading partnership.
What is the meaning of EDI compliance?
EDI compliance refers to the ability of an enterprise to exchange EDI transactions based on the order data requirements of its EDI trading partners. Each document sent or receive must adhere to set of specific EDI format to ensure successful exchange of data. Cogential IT EDI Services and solutions quickly realized the B2B connection between buyers and sellers.
Many companies insist that their trading partners use EDI software for communication, which provide a reliable and secure medium to exchange their data. Top names include retail giants such as Walmart, Target and Amazon.
EDI compliance requirements
Many large companies have requirements for the setup and maintenance of EDI trading partners, both of which are important to maintain compliance.
Take Daimler EDI AG as an example.
To communicate with Daimler AG one should comply with delivery notes and transport notification developed by German Association. This is done with the help of EDI, we provide you a reliable EDI solution to smoothly become an EDI compliant trading partners. So that meanwhile you can focus on growing your business.
First of all, the basic EDI documents required by Dailmer EDI are:
- 204 – Motor Carrier Load Tender
- 990 – Response to a Load Tender
- 214 – Transportation Carrier Shipment Status Message
- 210 – Motor Carrier Freight Details and Invoice
- 850 – Purchase Order
- 855 – Purchase Order Acknowledgment
- 856 – Ship Notice/Manifest
- 810 – Invoice
- 820 – Payment Order/Remittance Advice
- 997 – Functional Acknowledgment
With Daimler AG to setup a standard EDI from your own EDP system, a procedural and data test is required. This can be accessed by the standard EDI from VDA 4914 or the transport standard EDI from VDA 4921.
Other than that, there is another example of Southern States
To be compliant with Southern States EDI the trading partners will be required to send the following documents.
- EDI 810 Invoices
- EDI 997 Acknowledgements
- EDI 856 Shipping Notices
- EDI 855 Purchase Order Acknowledgements
On response the company need to send the following EDI documents
- EDI 850 Purchase Order
- EDI 997 Functional Acknowledgement
Why is EDI compliance important?
Almost all major trading partners expect companies with which they trade to comply with EDI regulations. Therefore, the importance of establishing and maintaining EDI regulations cannot be underestimated, especially considering that it can benefit your bottom line.
At the most basic level, EDI compliance means that your business can use EDI to receive your purchase orders and send invoices.
A solid, trust-based relationship based on EDI capabilities can promote confidence and business growth. The problem of incorrect implementation of EDI is not only frustrating, but can also cause losses.
The cost of non-compliance-EDI refund
EDI refunds due to non-compliance caused by your mistakes will cause you losses. These mistakes disrupt your business operations and cause monetary losses. If you are late for delivery, the package is mislabelled, or the goods are damaged or incomplete, you may cause losses.
Any EDI transaction file must contain a certain amount of important data. Without these requirements, EDI documents will become useless. Following strict EDI feed formatting rules helps to define exactly where to find and use every important part of the data required in the document. Each file is assigned one of dozens of transaction numbers in the EDI common format.
Cogential IT helps you become EDI compliant with your trading partners without going through any hassle. Our cloud-based EDI solution offers you a reliable medium to get started with EDI so that you can focus on your business while our experts handle all your data exchange responsibilities. We are one of the best EDI Solution Provider.
Cogential IT EDI standardized solution meets the integration needs of all industries, ensuring efficient electronic data exchange and automatic processing of business documents. Contact us now and get your business ready for future.
Ref : https://cogentialit.blogspot.com/2021/10/edi-compliance-and-its-importance.html