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EDI Information provided by Maingate
Corporation
Jack Key Auto Transport now has the capability to send and recieve EDI (Electronic Data Interchange) documents with it's trading partners.
EDI is the direct, standardized computer-to-computer exchange of routine business documents (such as invoices and purchase orders) between a company and it's suppliers, customers, and the government.
EDI Frequently Asked Questions Q: What is EDI?
A: EDI (Electronic Data Interchange) is the computer-to-computer sending of routine business documents such as invoices or purchase orders over phone lines. With EDI you can send your trading partners documents straight from your computer application directly to theirs.Q: How is EDI different from Email?
A: EDI is the transfer of business documents from your computer in one format directly to the computer application of your trading partner. Email and bulletin board messages are the free-form transfer of text or images.Q: Our office uses PCs and one of my trading partners has a mainframe. In short, our systems are in no way compatible to each other, how is it I can send a document from my accounting application to theirs?
A: That's the key with EDI. It has its own standard.Translation software (which both partners must have) takes information in the format your computer is configured to and translates it into a standard EDI format before sending the document to your trading partner. Your trading partner's software translates the information from the EDI standard into a format that his computer system requires.Q: What are the benefits of EDI?
A: The benefits are many, but a primary reason to become EDI capable is to expand your business relationships.Most large companies have EDI systems in place. They are more apt to do business with you if they know they can send and receive documents from you electronically. The government demands that their trading partners have EDI capability. Large companies appreciate the reduced order-to-payment cycles intrinsic to EDI. Errors are reduced because there's less data entry and re-entry. There are reduced postage costs as well as printing costs associated with pre-printed business forms. Storing business forms electronically on your computer means you reduce paper waste and no longer need to fill up filing cabinets.Q: Is EDI safe?
A: EDI has gained such widespread approval from large companies because the transfer of documents is, indeed, secure as well as fast. Companies, who transfer sensitive information, insist on the use of EDI because of the security.Q: Can EDI save my company money?
A: Indeed, it can. In one study RJR Nabisco estimated that once they took into consideration the cost of pre-printed business forms and the accounting time, postage and delivery time, a purchase order cost the company $70 to produce. With EDI, processing the same purchase order costs around .90 cents.Q: One of my trading partners wants me to use EDI, and says I must first sign a Trading Partner Agreement. What is that?
A: A Trading Partner Agreement establishes that you and your trading partnerare going to transfer documents between yourselves electronically instead of the paper/mail based method.Q: What is a VAN?
A: A VAN, or Value Added Network receives documents you send electronically, and forwards them to your trading partners. For their services, they charge for transferring and receiving documents.Q: What is X12?
A: Email and faxes both have their own standards of transmission, so too, does EDI. X12 is the name given to the standard assigned to EDI transactions by a national standards committee.Q: How does the software or VAN know whether I'm sending an invoice or a purchase order?
A: The X12 standard assigns parameters and a designation number to each transaction set, i.e. invoice or purchase order. In EDI, you’ll hear the term, "Just EDI me an eight-ten". In EDI standard, the transaction set to define an invoice is called an 810 invoice. Purchase orders are assigned 850, and Functional Acknowledgements are a 997 transaction set.Q: What is a Functional Acknowledgement?
A: Once you've sent a document to your trading partner, you can request a 997 Functional Acknowledgement, which is just a message sent back to you from the VAN letting you know that the transmission was successful and no information was garbled or lost. Because EDI is so secure, many companies do not require an acknowledgement telling them their documents were successfully sent.
If you would like to become a trading partner of Jack Key Auto Transport, E-Mail us.
If you would like more information on EDI, contact Laura Mildon at Maingate Corporation.
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