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---

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[Home](/)[Resources](/resources) What Is EDI? 

Integration Guide 

# What Is EDI?

A plain-language guide for operations and supply chain teams.

If a retail partner just told you that you need to "set up EDI" before you can start selling to them, you're not alone — and you're in the right place. This guide explains what EDI is, how it works, what documents are involved, why **EDI compliance** matters, and what your options are for getting it done. No engineering background required.

15 min read Last updated: April 2026 By the APIWORX Integration Team 

## What EDI Is (and Isn't)

Not an email with a PDF 

Not a supplier portal 

Not an API 

**EDI is a structured data format** governed by a published standard. Every field, every value, every segment follows rules. When a retailer sends you a purchase order via EDI, their system and your system are speaking exactly the same language — no interpretation required.

**EDI** stands for **Electronic Data Interchange**. It is the standardized method businesses use to exchange documents — purchase orders, invoices, shipping notices — electronically, in a format that any computer system can read and process automatically.

EDI was developed in the 1960s to coordinate logistics during the Berlin Airlift, and became the dominant standard for B2B document exchange by the 1980s. It is still the primary way large retailers, grocery chains, automotive manufacturers, healthcare networks, and logistics providers exchange documents today.

If you want to sell to [Walmart](/edi/walmart), [Target](/edi/target), [Home Depot](/edi/home-depot), [Kroger](/edi/kroger), [ACE Hardware](/edi/ace-hardware), [Amazon Vendor Central](/edi/amazon), or virtually any major 3PL or distributor — you need EDI. It is not optional.

#### ANSI X12

North American standard. Used by virtually all U.S. and Canadian retailers, distributors, and logistics providers. (Covered in this guide.)

#### EDIFACT

International standard used in Europe and much of the rest of the world.

## Every Business Document Has an EDI Number

The X12 standard assigns a number to every type of business document. These are called **transaction set identifiers**. A few you'll see constantly:

850

Purchase Order

810

Invoice

856

Advance Ship Notice (ASN)

997

Functional Acknowledgment

855

Purchase Order Acknowledgment

When someone says "we need you to send an 856," they mean: send us a structured, standard-format Advance Ship Notice before your shipment arrives.

Before two companies start exchanging EDI documents, they agree on which document types they'll exchange, what fields are required, and what formats and values those fields must contain. This is called a **trading partner agreement**. Most large retailers formalize this in an **implementation guide** — a detailed document that specifies every requirement.

Implementation guides vary by retailer. Walmart's requirements are different from Target's, which are different from Home Depot's. **Compliance with each retailer's specific guide is mandatory.**

See the [trading partner directory](/edi) for retailer-specific EDI requirements.

## How EDI Is Transmitted

The EDI document itself (the structured data) is separate from the method used to transmit it. Three transmission methods are in common use:

#### AS2

Most Common 

Encrypted, certificate-based protocol over HTTP. Real-time with delivery receipts (MDNs). Required by Walmart, Target, Home Depot, Lowe's.

#### SFTP

Secure file-based transfer. Files placed in a designated folder on a schedule. Common with 3PLs and distributors.

#### VAN

Legacy 

Third-party EDI network routes documents between partners. Like an EDI post office. Per-transaction fees. Still widely supported.

Modern integration [platforms like APIWORX](/platform) abstract all of this. You connect your systems to APIWORX; APIWORX handles AS2 certificates, SFTP connections, VAN routing, and everything else at the transmission layer. You never deal with it directly.

## The Supplier Flow — You Are Selling to a Retailer

This is the most common scenario for mid-market companies new to EDI. Here's how the complete order cycle works, document by document.

Step 1 

### EDI 850  — Purchase Order 

Retailer → You

-   • Contains: PO number, item numbers, quantities, prices, ship-to, requested ship date 
-   • You must respond within 24–48 hours (varies by retailer) 

Step 2 Automated 

### EDI 997  — Functional Acknowledgment 

You → Retailer

-   • Confirms receipt and structural validity only — NOT fulfillment ability 
-   • Sent automatically within seconds in a well-configured system 

Step 3 

### EDI 855  — Purchase Order Acknowledgment 

You → Retailer

-   • Your business response: accept, partially accept, or reject 
-   • Can include line-level substitutions, quantity adjustments, backorder dates 
-   • Most retailers require within 24 hours of the 850 

Late 855 = chargeback at many retailers 

Step 4 Conditional 

### EDI 860 / 865  — Purchase Order Change (If Needed) 

Retailer → You (860) / You → Retailer (865)

-   • Retailer sends 860 to modify the order 
-   • You respond with 865 to accept or reject changes 

Step 5 

### EDI 856  — Advance Ship Notice (ASN) 

You → Retailer

-   • Must be sent BEFORE shipment arrives — often within 30 minutes of carrier pickup 
-   • Contains: carrier, tracking, item-level detail, carton config, GS1-128 label data 
-   • Must match the physical shipment exactly 

Most chargebacks originate here — late, missing, or mismatched ASNs 

Step 6 

### EDI 810  — Invoice 

You → Retailer

-   • Must match the 850 exactly — same items, quantities, prices 
-   • Any discrepancy = invoice rejection or chargeback 
-   • Retailer sends 997 back to confirm receipt 

Step 7 Optional 

### EDI 820  — Payment Remittance (If Used) 

Retailer → You

-   • Retailer's payment notification — which invoices, what amounts, any deductions 
-   • Enables automated cash application in your ERP 

\+ Inventory & Replenishment Documents

EDI 846 

Inventory Inquiry/Advice

Current stock levels. Required by Amazon Vendor Central and most drop-ship retailers.

EDI 852 

Product Activity Data

POS/sales velocity data sent by retailer for forecasting.

EDI 830 

Planning Schedule

Forward demand forecast for production planning.

## The Buyer/Purchaser Flow — You Are Buying from Suppliers

Same documents, opposite direction. You're a distributor, retailer, or large company purchasing from suppliers.

1.  1. 
    
    EDI 850 You send to your supplier — initiating the purchase order 
    
2.  2. 
    
    EDI 997 Supplier sends back — you know they received it 
    
3.  3. 
    
    EDI 855 Supplier sends — you know whether they can fulfill and on what timeline 
    
4.  4. 
    
    EDI 860 / 865 You send 860 if changes needed; supplier responds with 865 
    
5.  5. 
    
    EDI 856 Supplier sends — you know what's coming; warehouse prepares receiving 
    
6.  6. 
    
    EDI 810 Supplier sends — invoice flows into AP system automatically 
    
7.  7. 
    
    EDI 820 You send — payment remittance closes the loop 
    

\+ If You Use a 3PL for Fulfillment

EDI 940  **Warehouse Shipping Order** — You → 3PL (authorize a shipment)

EDI 945  **Warehouse Shipping Advice** — 3PL → You (confirms shipment went out; triggers your outbound 856)

\+ If You're Managing Freight

EDI 204  **Motor Carrier Load Tender** — You/3PL → Carrier (request pickup)

EDI 214  **Shipment Status Message** — Carrier → You (in-transit and delivery status)

## EDI Document Reference Table

All 23 common transaction sets, organized by category.

AllOrderShippingFinancialPlanningAcknowledgment3PLLogistics

EDI Document Types Reference Table

EDI #

Name

Direction

Used By

Description

850

Purchase Order

Buyer → Supplier 

Retail, B2B, 3PL

Initiates the order cycle.

855

PO Acknowledgment

Supplier → Buyer 

Retail, B2B

Confirms acceptance, partial acceptance, or rejection.

860

PO Change Request

Buyer → Supplier 

Retail, B2B

Buyer requests changes to an existing PO.

865

PO Change Acknowledgment

Supplier → Buyer 

Retail, B2B

Supplier responds to a PO change request.

856

Advance Ship Notice (ASN)

Supplier → Buyer 

Retail, 3PL

Detailed shipment manifest sent before delivery.

753

Request for Routing Instructions

Supplier → Buyer 

Retail

Supplier asks retailer how to ship the order.

754

Routing Instructions

Buyer → Supplier 

Retail

Retailer specifies carrier and routing requirements.

810

Invoice

Supplier → Buyer 

All industries

Electronic invoice requesting payment.

820

Payment Remittance

Buyer → Supplier 

All industries

Payment notification, enables automated cash application.

812

Credit/Debit Adjustment

Both 

Retail, B2B

Chargeback notices, credits, and allowances.

846

Inventory Inquiry/Advice

Supplier → Buyer 

Retail, Drop-ship

Current inventory levels shared with retailer.

852

Product Activity Data

Buyer → Supplier 

Retail

POS and sales velocity data from retailer.

830

Planning Schedule

Buyer → Supplier 

Retail, Manufacturing

Forward demand forecast and release schedule.

862

Shipping Schedule

Buyer → Supplier 

Manufacturing, Retail

JIT shipping schedule with specific release dates.

997

Functional Acknowledgment

Both 

All industries

Confirms receipt and structural validity.

999

Implementation Acknowledgment

Both 

Healthcare, some retail

More detailed acknowledgment than 997.

940

Warehouse Shipping Order

Buyer → 3PL 

3PL/Fulfillment

Instructs 3PL to ship an order.

945

Warehouse Shipping Advice

3PL → Buyer 

3PL/Fulfillment

3PL confirms shipment was sent.

943

Warehouse Stock Transfer

Buyer → 3PL 

3PL

Notifies 3PL of incoming inventory transfer.

944

Warehouse Stock Transfer Receipt

3PL → Buyer 

3PL

3PL confirms receipt of inventory transfer.

204

Motor Carrier Load Tender

Shipper → Carrier 

Logistics/TMS

Requests carrier to pick up a shipment.

210

Motor Carrier Freight Invoice

Carrier → Shipper 

Logistics

Carrier's invoice for freight services.

214

Shipment Status Message

Carrier → Shipper 

Logistics

In-transit and delivery status updates.

## Why EDI Compliance Is Hard — Chargebacks Explained

EDI isn't complicated in concept. The challenge is compliance — and the financial cost of getting it wrong.

Late or missing ASN (856) 

ASN / shipment mismatch 

Missing or incorrect GS1-128 labels 

Invoice (810) doesn't match PO (850) 

Late PO Acknowledgment (855) 

Routing non-compliance (wrong carrier) 

### What Chargebacks Cost

Flat fee violations

$50–$500 per incident

Percentage-based

2–3% of invoice value

A supplier with 3 retail partners, 200 orders per month, and a 5% chargeback rate loses **$500–$30,000/month**.

### The fix isn't vigilance. It's automation.

The vast majority of EDI chargebacks are caused by human error — someone forgot to send the ASN, entered the wrong quantity, missed a timing window. Automated EDI eliminates this entire category of error. You can't forget to send a document that your system sends automatically.

## What "Managed EDI" Means

#### In-House

**Pros:** Full control, deep customization.

**Cons:** Dedicated EDI team, significant upfront investment, months per new trading partner.

#### Self-Service Platform

**Pros:** Faster than in-house, lower cost.

**Cons:** You own trading partner compliance, exception management, and requirement changes.

What APIWORX does 

#### Managed EDI — APIWORX

APIWORX owns trading partner onboarding, mapping, compliance testing, transmission, and exception handling. You connect your ERP and APIWORX does the rest.

For mid-market companies whose core business is not EDI operations, **managed EDI** typically costs less than in-house staffing and goes live faster than building it yourself.

[Talk to an EDI Specialist](/free-assessment)

## EDI + ERP Integration — The Last Mile

Getting EDI working is only half the equation. Many companies set up EDI and still end up with manual work — because their EDI system isn't connected to their ERP or order management system.

Retailer                APIWORX                  Your Systems
   │                       │                         │
   │── EDI 850 (PO) ──────▶│── Order created ──────▶│ ERP/OMS
   │                       │                         │
   │                       │◀─ Fulfillment ─────────│ Warehouse
   │                       │                         │
   │◀── EDI 856 (ASN) ────│                         │
   │                       │                         │
   │◀── EDI 810 (Invoice)─│◀─ Invoice generated ───│ NetSuite/QuickBooks
   │                       │                         │
   │── EDI 820 (Payment) ─▶│── Cash application ───▶│ Accounting

Zero manual steps. Zero re-keying. Zero missed ASN windows because someone was out sick.

NetSuite QuickBooks Brightpearl Shopify Sage Intacct \+ 60 more 

## Where to Go From Here

If you've just been told you need EDI by a new retail partner, the first step is understanding what that partner specifically requires — which documents, which transmission method, and what their implementation guide says.

APIWORX works with mid-market suppliers, distributors, and brands who need to get EDI-compliant quickly, stay compliant as requirements change, and connect the whole flow to their existing systems — without building an EDI team.

[Talk to an EDI Specialist](/free-assessment)

### Related Resources

[

Trading Partner EDI Directory

EDI requirements for 45+ retailers and distributors.

](/edi)[

Walmart EDI Requirements

What Walmart suppliers need to comply.

](/edi/walmart)[

Connecting EDI to NetSuite

From EDI 850 to NetSuite sales order, automatically.

](/connectors/netsuite)

On This Page

[1. What EDI Is](#what-edi-is)[2. Document Numbers](#document-numbers)[3. Transmission Methods](#transmission)[4. Supplier Flow](#supplier-flow)[5. Buyer Flow](#buyer-flow)[6. Document Reference](#reference-table)[7. Chargebacks](#chargebacks)[8. Managed EDI](#managed-edi)[9. EDI + ERP Integration](#erp-integration)[10. Where to Go From Here](#conclusion)

Need EDI compliance fast?

APIWORX runs the full managed EDI flow.

[Get a Plan](/free-assessment)

Related

## Keep going — related integration topics

[ERP integration Connect NetSuite, SAP, Acumatica, Sage and Business Central. ](/erp-integration)[Ecommerce integration Storefronts, marketplaces, ERP, WMS and 3PL on one platform. ](/ecommerce-integration)[NetSuite ecommerce integration Shopify, Amazon, Walmart and 50+ channels into NetSuite. ](/netsuite-ecommerce-integration)[B2B integration Trading partners, suppliers and customers — EDI, API and AS2. ](/b2b-integration)[EDI integration Retailer and supplier EDI translated into clean ERP orders. ](/edi-integration)[EDI software Managed EDI you do not have to host, monitor or migrate. ](/edi-software)

## See the platform behind trustworthy operations

Tell us about your systems and challenges — our team will build a tailored automation plan within 24 hours.

[Let's Automate](/free-assessment) [Explore the Platform](/platform)

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APIWORX LLC  
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Austin, TX 78701

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