How EDI Works
This article explains the workflow of receiving and processing orders by EDI. Step-by-step instructions will give you a quick understanding of how the whole process works in real life.
Step 1 & 2:
EDI connector is installed on one of your company's computers. When the computer is switched on, the connector will make connections to the VAN Gateway to check for new messages/orders.
EDI software automatically sends a Functional Acknowledgement to the business partner to tell them that the order has been received successfully.
When an order is just received, it is a purchase order. At this stage, it will be then converted to a sales order automatically.
The sales order is checked against all the business rule such as minimum order quantity for each product type and minimum order amount.
The accountant again checks the sales order before reporting the order to the accounting software such as MYOB.
Optionally, a purchase order acknowledgement can be sent to the business partner to confirm you have enough stock on hand. Besides that, if any adjustment is requested by them for the order, a purchase order change message can be sent to confirm the changes.
Step 8, 9 and 10
Now the order is physically processed by the warehouse. Every shipping units is barcoded with a Serial Shipping Container Code. A Consignment Note is printed for each order.
After the order is completely processed, an Advance Shipping Notice is sent to the business partner telling the order number, how many shipping units are sent, what is contained in each shipping unit.
A Recipient Created Tax Invoice can be sent by the other business partner to the company telling that the order has arrived to their office. However, it's not mandatory.
An Electronic Invoice is sent to the other business partner.
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