Step-by-Step EDI Transaction Flow in Retail Industry

The Retail Industry heavily relies on EDI transactions to manage the exchange of purchase orders, invoices, shipments, and inventory data efficiently. 

Below is the standard EDI transaction flow in retail, 

Comprehensive List of EDI Abbreviations & Their Meanings

Electronic Data Interchange (EDI) involves numerous standards, protocols, transaction sets, and technologies. 

Below is a categorized list of commonly used EDI abbreviations.

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EDI Standards & Frameworks

Abbreviation	Meaning
EDI	Electronic Data Interchange
ANSI X12	American National Standards Institute X12
EDIFACT	Electronic Data Interchange for Administration, Commerce, and Transport
VDA	Verband der Automobilindustrie (German Automotive EDI Standard)
TRADACOMS	Trading Data Communications (UK EDI Standard)
PEPPOL	Pan-European Public Procurement Online
GS1 EDI	Global Standards 1 for EDI (Retail & Supply Chain)
RosettaNet	B2B Standard for High-Tech & Electronics Industries
ebXML	Electronic Business using eXtensible Markup Language

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EDI Communication Protocols

Abbreviation	Meaning
AS1	Applicability Statement 1 (SMTP-based EDI)
AS2	Applicability Statement 2 (Secure HTTP-based EDI)
AS3	Applicability Statement 3 (FTP-based EDI)
AS4	Applicability Statement 4 (Web Services-based EDI)
OFTP	Odette File Transfer Protocol (Automotive Industry)
OFTP2	Secure Version of OFTP (Used in European Automotive)
FTP	File Transfer Protocol
FTPS	File Transfer Protocol Secure (FTP with SSL/TLS)
SFTP	Secure File Transfer Protocol (FTP over SSH)
HTTP	Hypertext Transfer Protocol
HTTPS	Secure HTTP (Used for API & Web-based EDI)
MQ	Message Queue (IBM WebSphere MQ)
VAN	Value-Added Network (Third-party EDI Network Provider)
SMTP	Simple Mail Transfer Protocol (Email-based EDI)
X.400	ITU-T Standard for Secure Email-based EDI

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EDI Transaction Types (ANSI X12 & EDIFACT)

Abbreviation	Meaning	Standard
850	Purchase Order	X12
810	Invoice	X12
856	Advance Ship Notice (ASN)	X12
997	Functional Acknowledgment	X12
846	Inventory Inquiry/Advice	X12
855	Purchase Order Acknowledgment	X12
820	Payment Order/Remittance Advice	X12
ORDERS	Purchase Order	EDIFACT
INVOIC	Invoice	EDIFACT
DESADV	Dispatch Advice (ASN)	EDIFACT
CONTRL	Functional Acknowledgment	EDIFACT
IFTMIN	Transport Instruction	EDIFACT

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Web & API-based EDI Technologies

Abbreviation	Meaning
API	Application Programming Interface
REST API	Representational State Transfer API
SOAP API	Simple Object Access Protocol API
JSON	JavaScript Object Notation (Modern Data Format)
XML	eXtensible Markup Language (Traditional Data Format)
OAuth2	Open Authorization 2.0 (Used for API Security)
MFT	Managed File Transfer (Secure File Exchange)

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EDI Implementation & Integration Terms

Abbreviation	Meaning
ERP	Enterprise Resource Planning
SAP IDoc	SAP Intermediate Document (SAP’s EDI Format)
TP	Trading Partner
TMS	Transportation Management System
WMS	Warehouse Management System
P2P	Procure-to-Pay
O2C	Order-to-Cash
B2B	Business-to-Business
B2C	Business-to-Consumer
SCM	Supply Chain Management

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EDI Security & Compliance

Abbreviation	Meaning
PGP	Pretty Good Privacy (Encryption for EDI)
SSL/TLS	Secure Sockets Layer / Transport Layer Security
HIPAA	Health Insurance Portability and Accountability Act (Healthcare EDI)
GDPR	General Data Protection Regulation
DUNS	Data Universal Numbering System (EDI Partner Identification)

 

ERP Systems Used Globally

Enterprise Resource Planning (ERP) systems help businesses manage finance, supply chain, procurement, HR, sales, and EDI transactions within a single integrated platform.

Some of the ERP Systems Used Globally:

1 - SAP S/4HANA

• Founded by SAP
• SAP is best for large enterprises with complex processes
• SAP does Enterprise-wide automation (Finance, SCM, Manufacturing, HR, CRM, EDI)

2 - Oracle NetSuite

• Founded by Oracle
• Oracle is best for Mid-sized & growing businesses
• Oracle does Cloud-based ERP for financials, inventory, e-commerce, and supply chain

3 - Microsoft Dynamics 365

• Founded by Microsoft
• Microsoft is best for SMEs & large enterprises
• Microsoft does Unified ERP & CRM for finance, sales, supply chain, and operations

4 - Infor CloudSuite

• Founded by Infor
• Infor is best for Manufacturing, Healthcare, Automotive
• Infor does Industry-specific ERP with AI-driven automation

5 - Epicor ERP

• Founded by Epicor
• Epicor is best for SMEs in manufacturing & retail
• Epicor does Manufacturing & distribution process management

 

E-Invoicing (Electronic Invoicing) - An Overview

E-Invoicing (Electronic Invoicing):

E-Invoicing (Electronic Invoicing) is the digital exchange of invoices between businesses, government agencies, and customers in a standardized electronic format. 

Unlike traditional paper or PDF invoices, e-invoices are structured data files (e.g., XML, JSON, or EDI formats) that can be automatically processed by accounting and ERP systems without manual intervention.

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How Does E-Invoicing Work?

1. Invoice Creation → The seller generates an electronic invoice (XML, EDI, JSON, etc.).
2. Validation & Compliance → The invoice is checked against government tax regulations (e.g., GST, VAT).
3. Secure Transmission → The invoice is sent via EDI, API, or a government e-invoicing portal.
4. Invoice Processing → The buyer's system receives and automatically records the invoice.
5. Payment & Reporting → The invoice is matched with a purchase order and sent for payment & compliance reporting.

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Benefits of E-Invoicing

• Faster Processing – Reduces manual data entry and processing time.
• Lower Costs – Eliminates paper, printing, and mailing costs.
• Error Reduction – Minimizes human errors in invoicing.
• Regulatory Compliance – Ensures tax and audit compliance (e.g., PEPPOL, GST, VAT e-invoicing).
• Improved Cash Flow – Faster invoice approval and payment cycles.

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E-Invoicing Standards & Formats

Standard	Description	Used In
PEPPOL	EU-compliant e-invoicing standard.	Europe, Singapore, Australia.
FatturaPA	Government-mandated e-invoicing format.	Italy.
GST E-Invoice	Standardized electronic invoice for tax compliance.	India.
X12 810	ANSI X12 e-invoice format.	North America.
EDIFACT INVOIC	Global EDI invoice standard.	Europe, Asia.
UBL (Universal Business Language)	XML-based e-invoicing format.	Global (ERP, e-commerce).

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E-Invoicing vs. Traditional Invoicing

Feature	Traditional Invoicing	E-Invoicing
Format	Paper, PDF, Email	Structured Digital Format (XML, JSON, EDI)
Processing Speed	Slow (Manual)	Fast (Automated)
Error Rate	High (Manual Entry)	Low (Automated Validation)
Compliance	Difficult to track	Auto-validated for tax & audit

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Where is E-Invoicing Used?

✔ Retail & E-Commerce – Automated invoicing for Amazon, Walmart, B2B marketplaces.
✔ Government & Tax Compliance – Mandated by India (GST), EU (PEPPOL), Italy (FatturaPA).
✔ Manufacturing & Logistics – Automated invoicing for supply chains.
✔ Healthcare & Insurance – E-Invoicing in medical claims & hospital billing.