EDI Glossary

This glossary covers the essential terms and concepts used in Electronic Data Interchange. Whether you are new to EDI or an experienced practitioner, this reference provides clear, concise definitions to help you navigate the terminology of B2B electronic document exchange.

A

ACK (Acknowledgment)

A response message sent to confirm that an EDI transmission has been received. Acknowledgments can be functional (confirming syntactic correctness) or application-level (confirming business acceptance). In ANSI X12, the 997 Functional Acknowledgment and the 999 Implementation Acknowledgment are the primary ACK transaction sets.

ANSI (American National Standards Institute)

The organization that oversees the development of voluntary consensus standards in the United States, including the ANSI X12 EDI standard. ANSI accredits the Accredited Standards Committee X12, which develops and maintains the X12 EDI standards used widely in North America.

API (Application Programming Interface)

A set of protocols and tools that allow software applications to communicate with each other. In the EDI context, APIs are increasingly used as an alternative or complement to traditional EDI for real-time B2B data exchange. REST and SOAP APIs can handle many of the same business transactions as EDI but with different architectural approaches.

AS2 (Applicability Statement 2)

A widely used protocol for transmitting EDI data securely over the internet using HTTP/S. AS2 provides message encryption, digital signatures, and Message Disposition Notifications (MDNs) to ensure secure, reliable, and non-repudiable delivery. It was popularized by Walmart's mandate for supplier EDI communication and remains one of the most common EDI transport protocols.

ASN (Advanced Shipping Notice)

An electronic document sent by a supplier to a buyer before a shipment arrives, detailing the contents and logistics of the delivery. In ANSI X12, this is the 856 transaction set. In EDIFACT, the equivalent is the DESADV (Despatch Advice) message. ASNs enable receiving organizations to plan for incoming shipments and streamline warehouse operations.

B

B2B (Business-to-Business)

The exchange of products, services, or information between businesses rather than between a business and a consumer. EDI is the foundational technology for B2B electronic communication, enabling automated exchange of purchase orders, invoices, shipping notices, and other business documents between trading partners.

Batch Processing

A method of processing EDI transactions in which multiple documents are collected over a period of time and then transmitted or processed together as a group. This contrasts with real-time processing, where each transaction is handled immediately. Batch processing remains common in EDI due to the volume of transactions many organizations handle daily.

Business Document

A structured electronic message that represents a standard business transaction, such as a purchase order, invoice, or shipping notice. In EDI, business documents are encoded in standardized formats like X12 or EDIFACT and exchanged between trading partners through agreed-upon communication channels.

C

Clearinghouse

A third-party intermediary that receives EDI transactions from a sender, performs validation and translation if needed, and routes them to the intended recipient. Clearinghouses are especially prevalent in healthcare EDI, where they serve as intermediaries between healthcare providers and insurance payers, ensuring that claims and other transactions conform to required standards.

Compliance

The adherence to rules, standards, and regulations governing how EDI transactions are formatted, transmitted, and processed. Compliance can refer to conformance with EDI standards (such as X12 or EDIFACT specifications), industry-specific requirements (such as HIPAA for healthcare), or trading partner-specific guidelines that define accepted document formats and communication protocols.

Control Number

A unique sequential identifier assigned to EDI interchanges, functional groups, and transaction sets. Control numbers ensure that each transmission can be uniquely identified and tracked, enabling detection of duplicate or missing transactions. In X12, control numbers appear in the ISA (interchange), GS (functional group), and ST (transaction set) segments.

D

Data Element

The smallest unit of information in an EDI message. Data elements represent individual fields such as a date, quantity, price, or identifier. Each data element has a defined type, length, and set of valid values as specified by the relevant EDI standard. Data elements are grouped into segments to form meaningful business information.

Document Standard

A formal specification that defines the structure, content, and rules for a particular type of EDI business document. Examples include the X12 850 (Purchase Order) specification or the EDIFACT ORDERS message specification. Document standards ensure that trading partners interpret exchanged data consistently.

E

EDI (Electronic Data Interchange)

The computer-to-computer exchange of business documents in a standardized electronic format between trading partners. EDI replaces paper-based document exchange with automated electronic transmission, reducing processing time, errors, and costs. The major EDI standards include ANSI X12, UN/EDIFACT, and TRADACOMS.

EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport)

An international EDI standard developed under the United Nations Economic Commission for Europe (UN/ECE). EDIFACT is the dominant EDI standard outside North America and is used extensively in Europe, Asia, and for international trade. It defines a comprehensive set of message types covering procurement, transport, customs, finance, and many other business domains.

Envelope

The outer wrapper of an EDI transmission that contains routing and control information. In X12, the envelope consists of ISA/IEA (interchange), GS/GE (functional group), and ST/SE (transaction set) segment pairs. In EDIFACT, the equivalent envelope segments are UNB/UNZ (interchange), UNG/UNE (functional group), and UNH/UNT (message). Envelopes enable receivers to identify the sender, validate completeness, and route messages appropriately.

F

FTP (File Transfer Protocol)

A standard network protocol used to transfer files between computers over a TCP/IP network. While FTP was historically used for EDI file exchange, it lacks built-in encryption and is considered insecure for transmitting sensitive business data. Most organizations have migrated to SFTP or AS2 for EDI transmission.

Functional Acknowledgment

An EDI transaction that confirms the receipt and syntactic correctness of a received interchange. In X12, the 997 transaction set serves as the functional acknowledgment, reporting acceptance or rejection of each transaction set within a received functional group. The 999 Implementation Acknowledgment provides more detailed error reporting. In EDIFACT, the CONTRL message serves a similar purpose.

Functional Group

A collection of one or more transaction sets of the same type within an EDI interchange. Functional groups are bounded by GS (Group Start) and GE (Group End) segments in X12, or UNG and UNE segments in EDIFACT. They allow multiple documents of the same type to be bundled together in a single transmission.

G

GS1

A global organization that develops and maintains standards for business communication, including barcodes (GTINs), electronic product codes (EPCs), and EDI standards for retail and supply chain. GS1 standards such as GTIN, GLN, and SSCC are frequently referenced within EDI transactions to identify products, locations, and logistics units.

H

HIPAA (Health Insurance Portability and Accountability Act)

A United States federal law that, among other provisions, mandates specific EDI transaction sets and code sets for electronic healthcare transactions. HIPAA requires covered entities to use designated X12 transaction sets (such as 837, 835, 270/271) for claims, remittance, eligibility, and other healthcare operations, and imposes strict security and privacy requirements on the handling of protected health information.

Hub

In a hub-and-spoke EDI network, the hub is the central organization (typically a large buyer or retailer) that establishes EDI requirements and connects with multiple smaller trading partners (spokes). The hub defines the document formats, communication protocols, and compliance rules that spokes must follow to participate in the network.

I

Interchange

The outermost envelope of an EDI transmission, containing one or more functional groups. An interchange is bounded by ISA/IEA segments in X12 or UNB/UNZ segments in EDIFACT. It identifies the sender and receiver, contains a unique control number, and specifies the standards and delimiters used within the transmission.

ISA (Interchange Control Header)

The first segment in an ANSI X12 EDI interchange. The ISA segment is exactly 106 characters long and contains fixed-length fields identifying the sender, receiver, interchange date and time, control number, and the delimiters used throughout the interchange. Every X12 interchange begins with an ISA segment and ends with a corresponding IEA segment.

M

Mapping

The process of defining how data fields in an internal business system correspond to data elements in an EDI standard format. EDI mapping translates between a company's proprietary data structures (such as ERP fields) and the standardized EDI format required by trading partners. Mapping is one of the most critical and time-consuming aspects of EDI implementation.

MDN (Message Disposition Notification)

A receipt message used in the AS2 protocol to confirm that an EDI transmission was successfully received and decrypted by the recipient. MDNs can be synchronous (returned immediately) or asynchronous (returned separately). They provide non-repudiation, proving that the recipient received and processed the message.

Message Type

A specific category of EDI document defined by an EDI standard. In EDIFACT, message types are identified by six-letter codes such as ORDERS (purchase order), INVOIC (invoice), and DESADV (despatch advice). In X12, the equivalent concept is called a transaction set, identified by a three-digit number such as 850, 810, or 856.

O

OFTP (Odette File Transfer Protocol)

A communication protocol developed by the Odette organization for the automotive industry in Europe. OFTP2, the current version, provides secure file transfer over the internet with built-in encryption, compression, and signed delivery receipts. It is widely used for EDI exchange in the European automotive sector and related industries.

P

Partner Profile

A configuration record in an EDI system that defines the technical and business parameters for exchanging documents with a specific trading partner. A partner profile typically includes the partner's identifiers, supported transaction types, communication protocol settings, mapping specifications, and validation rules.

PEPPOL (Pan-European Public Procurement Online)

A framework of standards and network infrastructure that enables cross-border electronic procurement and invoicing, primarily used for public sector transactions in Europe and increasingly in the Asia-Pacific region. PEPPOL uses a four-corner model with certified Access Points to route documents between participants.

Q

Qualifier

A code that provides additional context for a data element in an EDI message. For example, in the ISA segment, the Interchange ID Qualifier identifies what type of identifier follows (such as DUNS number, GLN, or mutually defined code). Qualifiers ensure that data elements are interpreted correctly by both sender and receiver.

R

Receiver

The trading partner designated to receive an EDI transmission. The receiver is identified in the interchange envelope (ISA segment in X12, UNB segment in EDIFACT) and is responsible for processing the received documents according to the agreed-upon trading partner agreement.

S

Segment

A logical grouping of related data elements within an EDI message. Each segment begins with a segment identifier (such as N1 for name information or DTM for date/time) followed by its data elements separated by delimiters. Segments are the building blocks of EDI transaction sets and messages, organized in a defined sequence according to the standard.

SFTP (SSH File Transfer Protocol)

A secure file transfer protocol that provides encrypted file access, transfer, and management over an SSH (Secure Shell) connection. SFTP is widely used for EDI file exchange as a secure alternative to plain FTP, offering authentication, encryption, and data integrity verification.

Spoke

In a hub-and-spoke EDI network, a spoke is a smaller trading partner that connects to the central hub organization. Spokes typically adopt the EDI standards and communication requirements set by the hub. Many small and medium-sized businesses participate in EDI as spokes, often using web-based EDI portals or third-party service providers to meet the hub's requirements.

Standard

A published specification that defines the format, structure, and rules for EDI document exchange. The major EDI standards include ANSI X12 (predominant in North America), UN/EDIFACT (used internationally), TRADACOMS (used in UK retail), and various XML-based standards. Standards ensure interoperability between different organizations' systems.

T

Trading Partner

Any organization with which a company exchanges EDI documents. Trading partners agree on the specific EDI standards, transaction types, communication protocols, and business rules that will govern their electronic relationship. This agreement is typically formalized in a Trading Partner Agreement (TPA).

Transaction Set

The X12 term for a complete EDI business document, such as a purchase order (850), invoice (810), or advance ship notice (856). A transaction set is bounded by ST (Transaction Set Header) and SE (Transaction Set Trailer) segments and contains all the segments and data elements needed to convey a specific business message. The EDIFACT equivalent is a message.

Translation

The process of converting data between an organization's internal format and a standardized EDI format. Inbound translation converts received EDI documents into a format that the organization's business systems can process. Outbound translation converts internal data into the EDI format required by trading partners. Translation software uses predefined maps to perform these conversions.

U

UNB (Interchange Header)

The opening segment of a UN/EDIFACT interchange, equivalent to the ISA segment in X12. The UNB segment identifies the syntax version, sender, recipient, date and time of preparation, and interchange control reference. It establishes the context for all messages contained within the interchange.

UNH (Message Header)

The segment that marks the beginning of an individual message within a UN/EDIFACT interchange, equivalent to the ST segment in X12. The UNH segment contains a unique message reference number and identifies the message type, version, and release number, telling the receiver how to interpret the segments that follow.

V

VAN (Value Added Network)

A third-party network service that acts as an intermediary for EDI transmissions between trading partners. VANs provide mailbox services, protocol translation, message tracking, and compliance checking. While direct connections via AS2 and SFTP have become common, many organizations still use VANs for their reliability, audit capabilities, and ability to connect with partners using different communication protocols.

X

X12

The EDI standard developed and maintained by the Accredited Standards Committee X12, chartered by ANSI. X12 is the predominant EDI standard in North America, used across industries including retail, healthcare, transportation, finance, and government. The standard defines hundreds of transaction sets covering virtually every type of business document, from purchase orders (850) to healthcare claims (837).

XML (Extensible Markup Language)

A flexible markup language used to define structured data formats. While not a traditional EDI standard, XML-based formats such as UBL (Universal Business Language), cXML, and RosettaNet are increasingly used for B2B document exchange alongside or as alternatives to classic EDI formats. XML offers human readability and easier integration with web-based systems, though it produces larger file sizes than traditional EDI formats.