10 Common EDI Terms Every Business Should Know

Electronic Data Interchange (EDI) is a powerful tool that enables the digital exchange of business documents between companies. But for many small and mid-sized businesses, the jargon can be overwhelming. Let’s break it down. Here are 10 of the most common EDI terms every business should understand.

1. EDI (Electronic Data Interchange)

EDI is the computer-to-computer exchange of business documents in a standardized electronic format between trading partners.

2. Trading Partner

A trading partner is any business entity involved in EDI communications. This can include suppliers, retailers, manufacturers, or logistics providers.

3. ANSI X12

ANSI X12 is a standard developed by the American National Standards Institute for EDI in North America. It defines document structure, data elements, and communication protocols.

4. EDIFACT

EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) is an international EDI standard developed by the United Nations.

5. Purchase Order (PO)

An EDI 850 transaction. It is the electronic version of a buyer’s request to a supplier for products or services.

6. Invoice (EDI 810)

An EDI 810 is the electronic version of a traditional invoice. It’s sent by the supplier to request payment for goods or services.

7. Advance Ship Notice (ASN)

Known as EDI 856, this document notifies the buyer that a shipment is on its way. It often includes tracking numbers, packaging information, and delivery timelines.

8. UCC-128 / GS1-128 Label

This is a standardized barcode label used for shipping cartons. It includes a unique SSCC (Serial Shipping Container Code) that enables accurate shipment tracking.

9. VAN (Value-Added Network)

A VAN is a third-party network provider that facilitates the secure exchange of EDI documents between trading partners.

10. Integration

Integration refers to the process of connecting your EDI system with your internal business systems (ERP, WMS, or accounting software) to automate data exchange.

Final Thoughts

Understanding these key EDI terms lays the foundation for streamlined digital transactions and supply chain automation. Whether you’re new to EDI or upgrading from outdated systems, clarity on the basics empowers better decisions.

Need a simpler way to manage EDI? Try ActionEDI — a modern, cloud-based EDI platform designed for SMEs.