T-Set | EDIFACT INVOIC
Electronic data interchange (EDI) has been critical to standardising supplier transactions, leading to more efficient ways of working between businesses. One of the first steps to seeing that success in your own business is by having an in-depth understanding of the different EDI standards available.
We’ve previously done a deep dive on EDIFACT (Electronic Data Interchange For Administration, Commerce and Transport), one of the most commonly used EDI standards. Here, we will be going further in-depth by covering the EDIFACT INVOIC message.
Keep reading to find out more about what this code involves, its benefits, and practical guidance on how it factors into communications with your supply chain partners.
Suggested reading: Get a refresher on what the EDIFACT standard involves by reading our article: EDIFACT Explained: Message Standards and Transaction Sets.
What is EDIFACT INVOIC?
EDIFACT INVOIC is a standardised electronic document used in international trade and represents a commercial invoice.
The INVOIC message includes detailed information about:
- Products or services provided
- Their quantities
- Agreed prices
- Discounts or rebates (if applicable)
- Overall invoice amounts
It may also carry tax, transport, and packaging details. It’s a crucial component for enabling international transactions between trading partners by reducing manual errors, increasing speed and improving overall efficiency.
What are the benefits (and drawbacks) of EDIFACT INVOIC?
The EDIFACT INVOIC offers several significant benefits. These namely stem from how it reduces the need for manual interventions and increases transparency for all parties, leading to more effective operations. Here’s a breakdown of its specific advantages:
- Streamlines operations: By reducing manual data entry and associated errors, EDIFACT INVOIC streamlines business processes and significantly decreases human errors that might occur during manual data entry. The accuracy and quick delivery of this information also helps in inventory management and better-informed decision-making.
- Increases speed: Because of its automation capabilities, document exchanges can happen instantly, enabling faster processing of invoices.
- Compliant to international standards: EDIFACT INVOIC complies with international standards, ensuring global compatibility and acceptance of your invoice documents.
- Cost efficiency: Over time, the reduction in errors and increased efficiency enabled by EDIFACT INVOIC can lead to substantial cost savings for your business.
While the above outcomes are clearly positive, there can be potential drawbacks to the INVOIC message. Setup and maintenance can be costly and often requires expert knowledge.
Besides, each trading partner might use a different subset of the standard, which can cause a mismatch and require a custom mapping tool. Finally, a single error in a t-set can lead to the entire set being rejected.
What does an EDIFACT DESADV message include?
The structure of the INVOIC T-set is relatively straightforward and practical, consisting of a header, detail, and summary section.
The header section holds general invoice information like invoice numbers and dates, while the detail section is reserved for item descriptions, quantities, and prices. The summary section wraps everything up with invoice totals.
Each of these sections contains distinct segments. For example, the header segment includes the BGM (beginning of message) and DTM (date/time/period) segments. In the detail section, you find LIN (line item) and PIA (additional item identification) segments. The summary segment then includes the MOA (monetary amount) and UNT (message trailer) segments.
Here are more specific details on the segments in an INVOIC message, along with placeholder examples, and their purpose:
|UNH||UNH+1+INVOIC:D:96A:UN:EAN007′||Message Header. It is used to start, identify and specify an interchange.|
|BGM||BGM+380+342459+9′||Beginning of Message. It is used to indicate the type and function of the document and to transmit the identifying number.|
|DTM||DTM+137:20050705:102′||Date/Time/Period. It is used for specifying certain date, time or period details related to the invoice.|
|FTX||FTX+ZZZ++:::Free text description of the invoice’||Free Text. It is used for specifying free-form or coded text information.|
|NAD||NAD+BY+5412345000176::9′||Name and Address. It is used to specify parties involved in the transaction.|
|LIN||LIN+1++157870:IN’||Line Item. It is used to give details about the items being invoiced.|
|MOA||MOA+203:1202.58′||Monetary Amount. It is used to specify the invoice total or other amounts related to the invoice.|
|TAX||TAX+7+VAT+++:::15′||Duty/Tax/Fee details. It is used to indicate the tax details related to the line items or total invoice.|
|UNS||`UNS+S’||Section control. It is used to divide the message into sections.|
|CNT||CNT+2:1′||Control total. It is used as a check to ensure the correct number of line items or other elements.|
|UNT||UNT+23+1′||Message Trailer. It is used to end, check the integrity and confirm the receipt of a message.|
An actual INVOIC message (using the above placeholder examples) would look something like this:
|UNH+1+INVOIC:D:96A:UN:EAN007’BGM+380+342459+9’DTM+137:20050705:102’FTX+ZZZ++:::Free text description of the invoice’NAD+BY+5412345000176::9’NAD+SU+4012345000094::9’LIN+1++157870:IN’MOA+203:1202.58’TAX+7+VAT+++:::15’UNS+S’CNT+2:1’UNT+23+1′|
Pro tip: Remember that not all INVOIC messages include the same segments every time. Yours will depend on the specific requirements of the invoice, the type of goods or services being exchanged, and the business requirements of both trading partners.
The equivalents of EDIFACT INVOIC in other EDI formats
As with other T-sets (such as the EDIFACT DESADV T-set), there will be different equivalents of the EDIFACT INVOIC in other EDI standards. Let’s take a look at the most commonly used standards:
|EDI Standard||Equivalent of EDIFACT INVOIC|
|ANSI ASC X12 (American National Standards Institute)||810 Invoice|
|TRADACOMS (UK retail standard)||INVFIL Invoice File|
|UN/CEFACT XML (United Nations Centre for Trade Facilitation and Electronic Business)||Cross Industry Invoice|
|VDA (German automotive industry)||4913 Invoice|
|RosettaNet||PIP3A4 Invoice Request|
|ODETTE (European automotive industry)||ODETTE INVOIC|
|SAP IDoc||INVOIC02 Invoice Document|
|GS1 XML||Invoice 3.1|
|PEPPOL BIS (Pan-European Public Procurement Online)||Billing 3.0|
How EDIFACT INVOIC t-sets are processed
Now, let’s delve into how an EDIFACT INVOIC t-set is processed to ensure accurate, efficient, and rapid communication between businesses. We explore each step, from compiling the message to receiving the final acknowledgment:
- Compilation: The sender starts by gathering all relevant data and creating an INVOIC message. This includes invoice details like item descriptions, quantities, prices, etc.
- Transmission: The created INVOIC message is then sent electronically to the recipient via EDI.
- Reception and Validation: Upon receiving the message, the recipient’s system interprets and validates the data. Any errors flagged during this validation stage are brought to immediate attention.
- Integration into Invoice Processing System: If the data is error-free, it gets integrated into the recipient’s invoice processing system. Any discrepancies are promptly addressed.
- Acknowledgement of Receipt: Once the invoice is verified, the recipient sends a CONTRL (Control) message back to the original sender. This message confirms that the invoice has been received and accepted.
See greater efficiencies with the help of an EDI partner
Understanding and navigating the array of different EDI standards available to your business can be complicated. Especially when you consider that the standards used can vary between industries (let alone businesses.)
At Data Interchange, we use our over 30 years of expertise in EDI to help organisations see fully synced operations and streamlined communications with their partners. Our EDI solutions can help you manage a variety of EDI use cases, from multiple connections to digital integration with your suppliers.
Discover how our solutions can help your business see success today by talking to one of our experts!