EDI validation is the process of making sure two companies can successfully trade EDI documents following specific guidelines they have both agreed upon. It’s typically a tedious, time-consuming process, but it doesn’t have to be. With the right approach and technology, it’s possible to streamline virtually every aspect of EDI validation and get to market faster.
We will use a simple example to walk through the typical EDI validation process and then explore how you can streamline the process and automate EDI tasks to save time and money.
Let’s imagine a shoe manufacturer just got the green light to sell its new shoes to a big-box retailer, and the big-box retailer requires the shoe manufacturer to set up an EDI connection in order to do business. In this example, the retailer has the power in the relationship, we will call them the “Leader”. The Leader will set the EDI rules and dictate how they want to trade data. The manufacturer will be required to follow these rules so we will call them the “Follower”. The leader gives the follower their EDI guideline, which outlines which documents are needed, the format, how to communicate the documents, and any other details specific to that leader. For example, the guidelines may indicate how the manufacturer should submit its invoices (EDI 810). These requirements may stipulate how the manufacturer should format such details as dates, billing addresses, and product descriptions. They may also require specific payment terms and carrier details. If the manufacturer deviates from any of these requirements, the invoice will be rejected and the manufacturer may not get paid. It’s very important for both parties to work together to validate or practice sending EDI transactions prior to going live. Once alive, transactions must be monitored to ensure they are flowing smoothly.
This sounds simple enough, so why has it been taking companies over 8 weeks to validate and test transactions before going live? Let’s take a look at the current process.