How does SAP EDI work for SAP S/4HANA?

The EDI module is a link that exists to connect SAP S/4HANA and the standard Edicom, in order to have correct reception of orders, sending of invoices, and other documents.

What is EDI?

When we talk about EDI (Electronic Data Interchange), we are referring to a specific format for electronic data exchange, which allows the effective transmission of documentation between different ERPs or between computer platforms.

It is a format that is used for communication without obstacles, with suppliers in companies that handle a large volume of data and information, normally referring to distribution companies, which need to streamline and order all documentation effectively in their ERP.

It allows sharing electronic documentation with suppliers

Let's remember that, unfortunately, not all companies use SAP to have their electronic documentation, but this should not be an impediment for them to have any type of information consistently in SAP for S/4HANA, so that they do not have to resort to obsolete technologies, such as fax, telephone or email.

How does EDI work?

The EDI module works by connecting your ERP SAP S/4HANA with the Edicom exchange format transparently. In this way, documents, invoices, etc., are generated in the conventional way.

The EDI module will take care of delivering the document to your supplier or customers in the correct format according to the ERP being used.

It also works with a reverse route; that means that the EDI module is responsible for receiving the documentation that will be arriving from another ERP and converts it into an order solution in SAP S/4HANA, having the possibility of performing customized validations beforehand and in a controlled manner.

SAP ABAP IDoc

When we talk about EDI, we cannot fail to explain what an IDoc is. This is an information container, which is transmitted between systems that are capable of interpreting the data.

IDoc (Intermediate Document) has the main purpose of exchanging and handling messages. Generally, when this exchange is made from a SAP system to a legacy system, it is carried out with SAP EDI.

What EDI formats exist?

There are different EDI message formats available to send documents. For example: EDIFACT, ODETTE, ZUGFeRD, SWIFT, ANSI X.12, etc. The most well-known message format internationally is EDIFACT, which is used for the exchange of electronic data between industries.

To transmit EDI messages, you need transport protocols such as AS2, AS4, OFTP, HTTPS or FTP.

What are the advantages of EDI technology?

With EDI, you can achieve significant cost savings for your business partners, and each document transferred through Electronic Data Interchange increases savings.

Therefore, EDI offers many advantages, especially from a financial point of view. With this type of system, you can save up to 80% of costs simply by eliminating printing and shipping costs.

We also have:

• Increased business efficiency thanks to proper integration between processes.
• Speed and reduction of errors in business processes.
• A more efficient supply chain thanks to more accurate data: delivery times up to 30% faster for the customer
• Improved cash flow thanks to shorter delivery times between order and payment

What is an EDI document?

An EDI document is one that replaces the paper document with an electronic document. When an EDI is sent, it has a standard format used by the sender and the recipient.

This document can be read by the sender's and recipient's ERP systems, and the information can be exchanged with complete security.

An EDI document can be an order, an invoice, a purchase request, etc. The international inter-industry standard for the transfer of EDI documents is EDIFACT, although there are several formats as we mentioned previously.

What is EDIFACT?

EDIFACT is the standard for international and cross-industry information exchange. It is also responsible for mapping and transferring various business processes, such as orders, invoices, customs declarations, and much more. Each EDIFACT message is named with a uniform and unique six-character abbreviation, which remains the same internationally.

If you have any questions or doubts about SAP EDI or are experiencing any problems with the digital sending of your invoices to suppliers, you can write to us and at Xamai we will provide advice to your questions.