EDI 810: Electronic invoices streamline transactions and more

by | Nov 28, 2017

EDI 810 sounds like the name of a graduate level college course, but it’s one of the most basic standard business documents used in the retail supply chain industry. It’s the electronic invoice a business (seller) sends to a trading partner (buyer) to request payment for the products delivered (following a purchase order, the second most basic document). With an automated EDI invoice, you free up a lot of staff hours from manual data entry among many other benefits.

Information included on EDI 810

With EDI, all invoice information is standardized between trading partners for each organization’s specific needs. The key data elements that are included in an 810 include:

  • Invoice number
  • Invoice date
  • Vendor number
  • Purchase order number
  • Shipping information
  • Item price
  • Additional item identifiers such as buyer item number and vendor part number
  • Product/service identifiers such as UPC/EAN/GTIN with their respective quantities

Invoices may also include such information as invoice terms, carrier and service levels, charges and/or allowances, taxes and more.

Additionally, it’s worth nothing that there are multiple EDI documents that support the invoice.

  • EDI 810is more broadly used in general merchandise/services.
  • EDI 894is utilized for vendor managed inventory (VMI) models.
  • EDI 880is used specifically with invoices for food and grocery products.

Invoice automation reduces data entry, human errors

An EDI 810 reduces the volume of paper flow in and out of your back office, and can help you gain other operational efficiencies by reducing the time to complete transactions. EDI 810s also greatly reduce the chance for data entry errors common to manual entry. How many delays in payment have you waited through because there was a human error or other mistakes? Conversely, a quicker reconciliation may eliminate those delays in payment, and get you paid on time.

No longer do you have to generate and print invoices to be faxed over, or email PDFs of invoices to your retailers. With an EDI 810, you can electronically transmit your invoice in seconds and know it arrived safely, rather than getting lost in the shuffle.

If your retailer also uses an EDI solution, it will automatically populate into their own EDI system and alert the buyer that it has arrived. It can then trigger an automatic reconciliation and comparison with what the retailer ordered and what they received.

Benefits of the three-way match

The EDI 810 is a vital document for three-way matching to work. The buyer (retailer) places a purchase order, the seller (vendor, supplier, distributor) fills the order and sends a packing list that is eventually received in the buyer’s warehouse or distribution center. After the order has been filled, the supplier sends the invoice (EDI 810).

Once all three documents are received, the buyer’s EDI system automatically compares the PO, packing list and invoice to make sure all values match. If they do, the invoice can be automatically paid via electronic direct deposit. If not, the system kicks it out for a person to review the documents and find the discrepancy. With automated three-way match, mismatches are the only instances when human eyes ever need to review and reconcile invoices.

This automatic reconciliation via three-way match and EDI provides more benefits than simple accuracy. It can save time and costs associated with worker hours spent processing invoices and tracking down documents. It can eliminate payments for fraudulent invoices. Importantly, it can help buyers take advantage of promotional and on-time billing discounts by tracking accurate pricing and enabling faster payments.

More often than not, in the case of a discrepancy, large retailers will levy fines against the suppliers for failing to comply with the retailer’s rules. But you can avoid these if you have an automated EDI system that’s accepted by nearly all large retailers in the market. And that starts with implementing the EDI 810 and EDI 850, the standard purchase order.

For more deep-dives into common EDI documents and transactions, take a look at our previous posts about purchase order acknowledgements, purchase order changes and advanced shipping notices. To learn more about EDI systems to automate transactions, visit the SPS Commerce website. You can also request to speak to one of our representatives about how the SPS EDI solution can help your business.

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Scott Bolduc

Scott Bolduc

Director of Supply Chain Strategy at SPS Commerce
Scott Bolduc is a multi-time winner of the Supply & Demand Chain Executive Pros to Know. He has worked with e-commerce retailers on their growth strategies and helped retailers transform their freight spending strategies to maximize efficiencies.
Scott Bolduc

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