The EDI 812 format
The EDI 812 is essential for maintaining accurate financial records and helps ensure that both the buyer and seller agree on the adjustments made to the accounts. It replaces traditional paper-based notification and is crucial for ensuring both parties agree with the adjusted financial obligations.
Here is a summary of the typical segments you would find in an EDI 812 transaction set:
BGN: Beginning segment
CUR: Currency
REF: Reference identification
PER: Administrative communications contact
ITD: Terms of sale/deferred terms of sale
DTM: Date/time reference
N1-N4: Name and address
ACK: Line item acknowledgment
IT1: Baseline item data (invoice)
SAC: Service, promotion, allowance, or charge information
TAX: Tax reference
CAD: Carrier detail
ISS: Invoice shipment summary
CTT: Transaction totals
How is the EDI 812 used?
Communication of adjustments:
The EDI 812 is primarily used to communicate adjustments to financial accounts due to credits or debits arising from transactions.
Clarification of discrepancies:
The EDI 812 allows sellers to detail discrepancies such as over-shipments, under-shipments, returns or price changes, which need to be rectified in the accounting records.
Documentation of changes:
The document provides a record of adjustments, serving as a formal request to the buyer to update their financial records accordingly.
Error correction:
The EDI 812 is used to correct errors in billing, shipping or agreements, ensuring both parties are aware of and agree on the corrections made.
Integration with other transactions:
The EDI 812 can be used in conjunction with other EDI transactions, like the EDI 810 (Invoice) or EDI 850 (Purchase Order), to align the financial accounts with the physical flow of goods and services.
Benefits of using the EDI 812
The EDI 812 is utilized for the specific function of communicating credit or debit adjustments between trading partners, but it’s beneficial to a supply chain in other ways. These benefits include improved financial management, operational efficiency and enhanced partner relations, all of which contribute to a more resilient and responsive supply chain network.
Increased efficiency:
Automating the adjustment notification process with the EDI 812 reduces manual processing, leading to faster resolution of financial discrepancies.
Improved accuracy:
Standardized electronic communication minimizes the risk of errors associated with manual data entry and interpretation.
Cost reduction:
Using the EDI 812 eliminates costs associated with paper-based processes, such as printing, mailing and document storage.
Faster dispute resolution:
Clear and immediate communication of adjustments speeds up the resolution of disputes and reduces the time to settle accounts.
Enhanced relationships:
Prompt and accurate adjustments help maintain trust and transparency between trading partners, contributing to better business relationships.
Streamlined reconciliation:
The EDI 812 facilitates quicker reconciliation of accounts payable and receivable, improving cash flow management.
Data analytics and reporting:
Electronic records enable better tracking and analysis of financial adjustments, aiding in financial reporting and decision-making.
Common issues with EDI 812
Issues with the EDI 812 can occur when the Credit/Debit Adjustment does not reference an existing document, such as an EDI invoice or a purchase order. In addition, the EDI Credit/Debit Adjustment may include free-form information that inhibits complete automation.
Automate 812 Credit/Debit Adjustment with SPS Commerce
Managing ongoing EDI tasks can be complex and time-consuming. Full-service EDI providers like SPS Commerce deliver EDI technology and associated staffing resources responsible for customizing, optimizing and operating your EDI solution.
A full-service provider, like SPS Commerce, has an expert team that handles ongoing management of your EDI solution. The SPS team actively manages 9,000 changes from retailers each year.
SPS communicates directly with your trading partners to manage connectivity, setup, requirements, updates and support efforts. SPS also takes ownership of understanding your trading partner requirements and making map changes.
SPS Fulfillment proactively monitors and optimizes your solution to prevent errors and minimize data entry.
Interested in learning more about our EDI solution?
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