November 17th, 2021
If your customer asks you to send them an INVOIC, it’s (most likely) not a spelling error. But even though an INVOIC and an invoice are one in the same, you’ll want to avoid mixing them up. That’s because INVOIC refers to a specific type of invoice in line with the EDIFACT standard for EDI.
Why Use the EDIFACT INVOIC Message?
As a supplier, if you’re not sending paper invoices to your customers or relying on email communication, you’re probably working with EDI. Maybe your customer requires you to log in to their supplier portal to submit your invoices, or maybe you have a direct connection that enables you to send your invoices automatically. Either way, when you’re dealing with EDI, you’re dealing with data in a structured format.
There are, of course, many ways in which data can be structured. But for EDI exchanges to work, the data contained within your invoices has to be formatted in a way that your customers’ systems can understand. That’s why EDI standards have been developed; the most common in Europe just so happens to be EDIFACT. Hence, the EDIFACT INVOIC message (also referred to as an EDI INVOIC) is often the preferred format for electronic invoicing.
EDIFACT INVOIC Specification
According to EDIFACT, an EDI INVOIC is a message claiming payment for goods or services supplied under conditions agreed between the seller and the buyer. This specification provides the definition of the Invoice message (INVOIC) to be used in Electronic Data Interchange (EDI) between trading partners involved in administration, commerce and transport.
That’s basically a complicated way of saying that an INVOIC contains the same information as an old-school paper invoice. That includes, but is not limited to, the following details:
- Business information (address, phone number, etc.) for both you and your customer
- Line items that clearly list the goods and/or services charged
- Date of issue
- Payment terms (e.g., must be paid within 30 days)
- Total amount owed
- VAT (if applicable)
What Comes Before & After the EDI INVOIC?
If you’re new to the EDI scene, you’re probably used to talking about your business transactions in a literal sense. Meaning, you receive purchase orders, you confirm receipt, you send shipment details, you send invoices, your customers confirm receipt of your invoices, and you get paid.
Although the language is something to get used to, your larger customers refer to the same exact business processes when they talk about sending ORDERS, receiving an ORDRSP, a DESADV, and an INVOIC, and sending a CONTROL message and REMADV. This might seem confusing now, but it doesn’t take long to catch on.
Here’s a little cheat sheet that will have you speaking EDIFACT in no time:
- A customer sends you a purchase order (ORDERS).
- You confirm receipt of your customer’s PO (ORDRSP).
- Your customer’s order is out the door, and you share the shipment details (DESADV).
- You send an invoice for the order (INVOIC).
- Your customer confirms receipt of your invoice (CONTROL).
- Your customer provides you with payment details (REMADV).
Check out our glossary for more helpful definitions.