Automate Your Customers’ Bills with an EDI Invoice System


The system through which companies process customers’ invoices via electronic data interchange is called EDI invoicing. Electronic data interchange is the exchange of commercial documents between two companies in an electronic format.  It is denoted by the transaction code 810 when they use the ANSI X12 standard. Companies prepare and dispatch an EDI 810 invoice after receiving EDI 850 purchase orders from their B2B customers.

What information does the EDI invoice contain?

The EDI 810 invoice which companies prepare after receiving purchase orders contain the following information:

  • Name of the customer,
  • An invoice number and date,
  • A brief description of the products and the quantity of the customer orders,
  • Per unit price of the product,
  • Total sales value,
  • Taxes applicable,
  • Discounts the companies offer,
  • The net amount payable by the customers,
  • Shipping details, and
  • Terms and conditions regarding payments.

How do companies prepare and dispatch an EDI 810 invoice?

The process of preparing and sending EDI 810 invoice by companies involves the following steps:

  • They receive a purchase order from the customers in the EDI 850 format,
  • Their EDI software application enters the transaction,
  • The EDI software simultaneously transmits details of the purchase order to the ERP system,
  • The ERP software system verifies the availability of the products in the inventory,
  • The ERP platform then generates a dispatch order to ship the products,
  • The ERP system then prepares a customer invoice and sends it to EDI software,
  •  The EDI software converts the ERP invoice to equivalent 810 formats, and
  • The EDI invoice is then sent to the customer.

Objectives of EDI Invoicing

A Company generally prefers to change from a manual system to EDI to achieve the following objectives:

  • Boost the speed of generating customer invoices,
  • Minimize or eliminate avoidable clerical errors prevalent in the manual system,
  • Obtain instant confirmation from customers on the receipt of their invoices, and
  • Ensure cost savings by getting rid of printing and postage expenditure.

What do companies need to consider before adopting EDI invoicing?

Companies need to consider the following factors when converting from manual to EDI invoicing, they should-

  • Adopt an EDI standard identical to what their trading partners are using,
  • Ascertain the costs of installing the EDI software application,
  • Check whether their employees have the technical skills to operate the EDI system.
  • See whether they need to recruit more staff,
  • Check whether the EDI system is scalable enough to meet their growth requirements.
  • Check whether the EDI software allows them to generate customer invoices from any computer, and
  • Know from where they get technical help instantly in cases of glitches

The EDI invoice system allows companies of all sizes to automate their customers’ billing. It allows them to generate invoices at a faster rate than manual processing. They even get rid of avoidable clerical errors common in operating costs. Companies can get instant confirmation from their B2B customers on receipt of these invoices. However, they need to consider certain aspects before installing the EDI system. These include the cost of the software application and the skills their employees need to operate it. It should be scalable enough to meet their growth needs and generate invoices from any computer with success.