EDI fundamentals
EDI (Electronic Data Interchange)
The computer-to-computer exchange of business documents (orders, invoices, shipping notices, etc.) in a standardised, machine-readable format between trading partners.
EDI Network
An EDI network is a network of trading partners and service providers that exchange EDI messages. An EDI network typically includes communication protocols, translation software, and other tools to facilitate EDI exchanges.
Direct Connection
A direct electronic connection between two systems or trading partners for exchanging EDI documents without the need for intermediaries.
Direct EDI Mapping
The transformation rules are specifically designed and customised for the individual systems and requirements of the trading partners involved. It involves direct mapping between data elements and source and target systems structures.
Batch processing
A batch refers to a group of EDI messages that are processed together as a single unit so they can be validated and transmitted in one go. Batching EDI messages can help improve efficiency and reduce processing time by reducing network overhead and ERP load.
Segment/Segment Name
A segment is a logical grouping of related data elements within a message. Segments typically have a unique identifier and can include multiple data elements. Segment names are the unique identifiers used to identify each segment within an EDI message. Examples of segment names from the X12 standard include ISA, GS, ST, SE, UHN and IEA.
EDI standards & mapping
EDI Message Standards
A message standard is a specific set of rules and guidelines that define the structure and content of an EDI message. Examples of EDI message standards include X12, EDIFACT, and TRADACOMS.
| Standard | Scope | Typical Industry Use | Key Point |
|---|---|---|---|
| X12 | North America | Retail, healthcare | Widely adopted by US supply chains. |
| EDIFACT | Global | Retail, logistics | A widely used international EDI standard developed by the United Nations (UN). Used by various countries, including the United Kingdom, Germany, France, and many others. It provides a standardised format for exchanging business documents across different industries and countries. |
| TRADACOMS | UK | Grocery & DIY | Legacy, but still common for British high-street multiples. |
| ODETTE | Europe | Automotive | Supports scheduling & transport docs typically between automotive manufacturers, suppliers, and other stakeholders. It promotes standardisation, efficiency, and collaboration within the automotive supply chain. |
| PEPPOL BIS 3.0 | Europe & UK | Public sector e-invoicing | Becoming mandatory for UK VAT-registered firms from April 2029.* |
EDI mapping
Transforming one data structure into another so that heterogeneous ERPs can “speak” to one another. The process of transforming data structure from one format to another during the exchange of documents. This ensures compatibility between different systems (heterogeneous ERPs can “speak” to one another) and allows seamless data integration.
Pre-configured mapping
A type of EDI mapping where the transformation rules are predefined and built into the EDI solution or software. These mappings are typically based on industry standards and require minimal customisation as they are out-of-the-box templates based on specific standards.
Canonical mapping
Involves mapping data from various formats into a common or canonical format before re-mapping it to each partner’s preference. This allows for easier integration and data consistency across different systems, helping large enterprises scale.
Common EDI documents (message types)
Specific types of EDI documents used for exchanging business information.
Purchase Order (PO) / ORDERS / 850
A document issued by a buyer to a supplier, indicating the intent to purchase goods or services.
Order Change / ORDCHG / 860
A document used to communicate changes or modifications to a previously transmitted purchase order (PO).
Advanced shipping notice (ASN) / DESADV / 856
A document sent by a supplier to a buyer, providing detailed information about the details of an imminent shipment so warehouses can plan inbound deliveries.
Invoice / INVOIC / 810
A document sent by a supplier to a buyer, requesting payment for goods or services provided.
REMADV
Remittance advice confirming which invoices have been paid.
SSCC label
Labels that contain a serial shipping container code that uniquely identifies each pallet or parcel; often encoded as a GS1-128 barcode. Used to track and manage the movement of containers throughout the supply chain, enabling efficient logistics operations and accurate inventory management.
Credit Note
A document issued by a supplier to a buyer, indicating a reduction in the amount owed due to returned goods or other adjustments.
Debit Note
A document issued by a supplier to a buyer, indicating an increase in the amount owed due to additional charges or adjustments.
Proof of Delivery (PoD)
A document or record providing evidence that goods have been received by the buyer or their representative.
Shipping Note
A document that provides details about the contents, packaging, and handling instructions for a shipment.
Connectivity options
Direct connection (point-to-point)
Secure VPN or AS2 link between two parties; fastest route, but each new partner adds technical debt.
Value-Added Network (VAN)
A third-party service provider that facilitates the exchange of EDI documents between trading partners. A business would use a VAN network because it offers a secure and dependable way to exchange EDI documents with trading partners. It ensures that sensitive business information is protected during transmission through advanced encryption and data security measures. VAN is frequently used within the automotive, car manufacturing, and government sectors.
AS2 (Applicability Statement 2)
HTTPS + digital signatures for real-time, non-repudiable transfers. A popular communication protocol used for secure and reliable EDI transmission over the internet. An AS2 connection provides businesses with a secure transmission of EDI documents over the internet. A reliable and real-time method of exchanging information with trading partners. It’s commonly used in retail, FMCG, and manufacturing sectors.
FTP/SFTP(File Transfer Protocol)
File-based transport; simple but lacks built-in security unless wrapped in SSH. It is a standard network protocol used for transferring files between a client and a server.
REST/JSON APIs
A modern, lightweight alternative that pairs well with ERP extensions and marketplaces.
Emerging compliance frameworks (PEPPOL)
PEPPOL (Pan-European Public Procurement Online) is an interoperable network and specification that standardises e-invoicing across Europe and, increasingly, the UK public sector. The UK government confirmed that PEPPOL e-invoicing will become mandatory for all VAT-registered businesses from 1 April 2029, accelerating supplier adoption.
How Netix accelerates adoption
Netix One – User-friendly web EDI portal for long-tail suppliers; includes PEPPOL support and built-in validation to slash invoice rejections.
Netix Flow – API-ready integration layer that maps any standard to any ERP and inserts enrichment rules (tax, UOM conversions, duplicate checks) before data lands in finance.
Netix Hub – End-to-end supplier onboarding, performance dashboards and change management that give finance and procurement teams the visibility they need, without adding IT backlog.
Updated May 2026