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Understand EDI Compliance and Eliminate EDI Chargebacks!

Topics: Benefits of EDI, EDI, EDI basics, EDI compliance, EDI considerations, EDI Technology

Updated July 7, 2023

Photo appears courtesy of Brianna Lehman.

As a person who has worked in the EDI area for many years, I have learned that it is not an easy task to always stay current and on top of all of your customer’s EDI compliance requirements. Not only are your customers always enhancing their internal processes, but your organization may be doing the same—directly affecting how you and your trading partners communicate EDI transactions, ticketing ramifications, and shipping requirements.

For example, there are also customer GS1-128/UCC-128/Carton Label requirements to follow, down to the size of the font used for the printed information, the format of where to put certain information, and bar coding specifications.

As an EDI coordinator, it’s your responsibility to help your organization keep up with these changes—otherwise, you can expect compliance chargebacks that can potentially claw back the cost and efficiency savings you’ve gained from your EDI implementation.

The Costs of EDI Chargebacks

When you don’t do everything you can to eliminate EDI chargebacks, you put your business at risk of both obvious and hidden negative consequences, including:

  • Being forced to pay monetary penalties that cut into your profit margins and cash flow
  • Losing the trust of your trading partners
  • Placing a heavy burden on your administrative team and drawing them away from their core business activities
  • Experiencing damage to your reputation to customers, partners, or investors
  • Seeing increased operational costs

This doesn’t have to happen to your business. With the right EDI retailer compliance processes and methodologies in place, you can keep your cash, maintain your sterling reputation (or polish a tarnished one), and improve your business processes for greater efficiency and more opportunities for growth and profit.

How to Become EDI Compliant – and Stay Compliant

In a world of constantly shifting customer EDI requirements across your trading partner network, keeping up and avoiding potential chargebacks can feel daunting.

Implementing EDI compliance takes five steps:

  1. Understanding your customer’s EDI requirements
  2. Identifying the data you need to send and receive
  3. Choosing the right EDI solution to meet your needs and fit your business and budget
  4. Testing your EDI solution with trading partners to ensure compliance
  5. Going live and—and this is the especially important part here—maintaining compliance.

Becoming EDI compliant isn’t the end—maintaining compliance is an ongoing journey of constant change and optimization. As an EDI coordinator, keeping up to date with your trading partners is the key to minimizing and preventing chargebacks. Let’s walk through some of our tips for maintaining this compliance and keeping your organization’s EDI mechanisms running smoothly.

Maintaining Your EDI Retailer Compliance

For suppliers, maintaining EDI compliance with retailers and other partners is all about proactive communication. EDI coordinators should aim to reach out to their trading partner community about once a month to review their specifications and note any changes that need responses.

This is where many EDI coordinators end up to prevent compliance issues and eliminate EDI chargebacks, but it’s not perfect. We’ve found that just reviewing everyone’s requirements, let alone handling the everyday issues that might crop up, can become a full-time job on their own as your trading network grows.

Depending on the number of trading partners you do business with, it can get overwhelming, compounded by the fact that if one trading partner has an approaching deadline, there may be others with deadlines in the same timeframe or pretty close to it.

Lightening the EDI Coordinator’s Load

One way to make the EDI compliance process less overwhelming is to distribute the workload from the EDI coordinator’s plate and have this type of monitoring delegated to the customer service representatives that handle each customer account.

Regardless of whose responsibility it is, having these conversations with your trading partners shouldn’t just be a reactive process, but a proactive solution to EDI retailer compliance as well—not just for your organization but for your partners. As your own EDI requirements shift and change, you need to work to inform your partners and help them maintain compliance on their end as well.

Four More Tips for Keeping Up with Customer EDI Requirements

Ensure all of your trading partners have current company contact information to reach you in the event of changes. They may generate mass emails notifying their trading partners of changes in the future. We have seen many clients have a dedicated email address for all things EDI to keep all communications in one place and easily accessible for reference.

Mandate that your customers/vendors employ third parties to handle all of their testing and label compliance to offload the massive volume of onboarding to minimize the issues as trading partners work to become compliant. These third parties may handle the mass emails as well. Note that being required to pay testing fees and label review fees prior to implementing your customer’s compliance changes is becoming more and more common.

Do your research—there are EDI companies out there that will do the monitoring of retailers’ requirements and will give you a heads up of any changes as well. There will probably be subscription fees for these services, but they may be well worth it if you don’t have the staff to handle it.

Always know your EDI trading partner guidelines and shipping requirements—keeping abreast with the guidelines and requirements your trading partners set will end up saving your organization money and increasing your bottom line.

Keeping up with your EDI trading partner guidelines isn’t always easy—in fact, it can quickly become overwhelming, in which case we invite you to check out our blog on Prioritizing EDI Tasks, where we’ll show you how to manage your task load as an EDI coordinator and when to postpone, delegate, or outsource as needed.

Any further questions about how to keep up to date with EDI compliance requirements and eliminate EDI chargebacks? GraceBlood’s team of EDI specialists has the answers. Speak to an expert today and see what we can do for your business.

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