Understanding EDI Formatting

Businesses use electronic data interchange (EDI) systems to exchange essential digital documents, seamlessly relaying critical data to trading partners. This computer-to-computer document exchange accelerates the flow of information, decreases the likelihood of delays or miscommunications, and promotes optimal supply chain efficiency.

If you want to take advantage of EDI technology, you must first understand the different EDI formats. We’ll talk about what they are, why they’re important, and the benefits they provide.

What is the EDI file format?

EDI messages are sent as flat files, a simple form of database that stores info as plain text. Most EDI formats use delimited flat files, which separate records using a specified character — such as a comma in Comma-Separated Values (CSV) format.

Although uncommon, some EDI may use fixed-width flat files to interface with older systems. Records in fixed-width flat files always start and end in a consistent spot, meaning they must include padding spaces if they don’t meet the designated width.

What is EDI format capability?

EDI format capability refers to whether you can easily exchange electronic business documents. If you are EDI format capable, your system can exchange multiple EDI document types. Conversely, if you lack EDI format compatibility, your system can only process, send, and receive a single type of EDI file. 

EDI format vs. EDI standard

An EDI message’s file format shouldn’t be confused with its EDI standard, which provides specific guidelines regarding the structure, layout, and content included in business-to-business documents.

Think of it like this: If you write a paper in Microsoft Word, you are creating a .docx file. That’s the file format. If the paper is in MLA style, that is akin to its standard.

EDI standards ensure uniformity between trading partners by providing a common rule set for generating EDI documents. There are multiple standards, including:

1. EDI X12 format (also known as ANSI ASC X12)
2. UN/EDIFACT
3. Tradacoms
4. RosettaNet
5. ODETTE
6. VDA

A company’s preferred format depends on its region and industry. EDIFACT is most popular among European nations, VDA is used by German automakers, and ANSI ASC X12 is the format of choice for U.S. businesses. 

Although you and your trading partners do not necessarily have to use the same format, you will find it much easier to do so.

Note that formats and standards relate to the data being sent, not how it is transferred. If you want to learn more about the types of EDI exchange, we can help with that, too.

Why is it important to understand EDI formats?

You must understand the EDI formats and standards your primary trading partners use. If you wish to adopt different standards, you must tailor your EDI documents to their specifications when sending files. Likewise, they must adapt to your EDI preferences so all parties receive the necessary information. 

You should also verify your computer system can handle your preferred EDI file formats. If it can’t, consider a modern, API-powered solution. These are the most robust and straightforward options, letting you quickly bring your platform up to industry standards. 

Benefits of exchanging EDI files

Becoming an EDI-capable organization will unlock a wide range of benefits, including the following:

• Reduced office supply costs
• Improved data quality and reliability
• Accelerated turnaround times
• Greater efficiency
• Decreased environmental impact
• Less friction between trading partners

Transitioning to EDI communication benefits everyone, including your business, trading partners, customers, and the environment. 

How do EDI file formats look?

EDI formatting ensures the receiving system can interpret the data accurately and in the correct order. Each standard specifies what elements need to be included, how they should be labeled, and where they need to be positioned in the flow of information. 

All EDI standards include codes that identify common information like dates and country names. They also specify how each message is structured and what characters can be used.

Let’s look at an EDI 834 file format example. Insurers and employers use an EDI 834 (Benefit Enrollment and Maintenance) to manage employees’ healthcare plans. 

At first glance, the document looks like a string of random information. However, scanning it line by line reveals valuable data, such as the person’s name, email address, physical address, and plan data. The EDI file’s formatting ensures this data is presented correctly so the receiving device can translate it into digestible information.

Another must-know format is the EDI 810 format. Also known as the EDI invoice format, it’s a staple of trade partnerships. There are numerous other EDI documents, each serving a distinct purpose, such as placing an order or requesting payment. 

How to exchange different EDI file formats

To exchange different EDI file formats, you need a platform capable of translating documents to and from your preferred standard. Legacy applications rarely offer this functionality, but robust API-powered platforms (like Orderful’s) do. 

The history of EDI document standards

The Transportation Data Coordinating Committee published the first format standard for transportation documents in 1975.

Soon after, the American National Standards Institute chartered the Accredited Standards Committee X12 in 1979. ASC X12’s standard became the first multi-industry national standard. EDIFACT, the UN’s global standard, was published in 1985. These EDI formats have been refined over the years, and several others have emerged. 

Master EDI formats with Orderful

Are you looking for a way to instantly exchange vital information with your business partners? Orderful’s EDI logistics experts have the knowledge and tools to help your organization master any EDI format. 

Working with an expert partner like Orderful simplifies EDI file format translation so you can achieve synergy with your trading partners. Connect with an EDI expert at Orderful to learn more about our EDI platform.