Thursday, September 19, 2024

EDI in Banking with X12 Transaction

 In the banking sector, ANSI X12 EDI transactions facilitate various financial operations, such as payments, account statements, and remittance advice. Below is a list of key ANSI X12 EDI transactions used in banking, along with a step-by-step outline of their usage:


### Key ANSI X12 EDI Transactions in Banking:


1. 820 - Payment Order/Remittance Advice

2. 821 - Financial Information Reporting

3. 822 - Account Analysis

4. 823 - Lockbox

5. 824 - Application Advice

6. 828 - Debit Authorization

7. 829 - Payment Cancellation Request

8. 830 - Payment Cancellation Response

9. 835 - Health Care Claim Payment/Advice

10. 836 - Payment Cancellation Advice

11. 837 - Health Care Claim

12. 838 - Trading Partner Profile

13. 841 - Specifications/Technical Information

14. 842 - Nonconformance Report

15. 844 - Product Transfer Account Adjustment

16. 849 - Response to Product Transfer Account Adjustment

17. 850 - Purchase Order

18. 860 - Purchase Order Change Request - Buyer Initiated

19. 865 - Purchase Order Change Acknowledgment/Request - Seller Initiated


### Step-by-Step Outline of Their Usage:


#### 1. 820 - Payment Order/Remittance Advice

   - Step 1: A company initiates a payment to a supplier or vendor.

   - Step 2: The company's EDI system generates the 820 transaction, which includes payment details and remittance information.

   - Step 3: The 820 transaction is sent to the bank.

   - Step 4: The bank processes the payment and transfers the funds to the supplier's account.

   - Step 5: The supplier receives the remittance advice, detailing the payment information.


#### 2. 821 - Financial Information Reporting

   - Step 1: The bank collects financial information, such as account balances and transaction details.

   - Step 2: The bank's EDI system generates the 821 transaction, summarizing the financial information.

   - Step 3: The 821 transaction is sent to the company's EDI system.

   - Step 4: The company processes the financial information for reconciliation and reporting purposes.


#### 3. 822 - Account Analysis

   - Step 1: The bank analyzes the company's account activities, including service charges and fees.

   - Step 2: The bank's EDI system generates the 822 transaction, detailing the account analysis results.

   - Step 3: The 822 transaction is sent to the company's EDI system.

   - Step 4: The company reviews the account analysis and verifies the charges.


#### 4. 823 - Lockbox

   - Step 1: The company receives payments from customers and directs them to a lockbox service.

   - Step 2: The bank processes the lockbox payments and deposits them into the company's account.

   - Step 3: The bank's EDI system generates the 823 transaction, summarizing the lockbox deposits.

   - Step 4: The 823 transaction is sent to the company's EDI system.

   - Step 5: The company reconciles the lockbox deposits with its accounts receivable.


#### 5. 824 - Application Advice

   - Step 1: The bank receives a transaction that requires acknowledgment or further action.

   - Step 2: The bank's EDI system generates the 824 transaction, providing status or error information about the received transaction.

   - Step 3: The 824 transaction is sent to the originating company.

   - Step 4: The company reviews the application advice and takes necessary action based on the feedback.


#### 6. 828 - Debit Authorization

   - Step 1: The company requests authorization to debit a customer's account.

   - Step 2: The company's EDI system generates the 828 transaction, detailing the debit request.

   - Step 3: The 828 transaction is sent to the bank.

   - Step 4: The bank processes the debit request and either authorizes or denies it.

   - Step 5: The bank's response is sent back to the company, confirming the authorization status.


#### 7. 829 - Payment Cancellation Request

   - Step 1: The company requests to cancel a previously initiated payment.

   - Step 2: The company's EDI system generates the 829 transaction, detailing the payment cancellation request.

   - Step 3: The 829 transaction is sent to the bank.

   - Step 4: The bank processes the cancellation request and halts the payment if possible.


#### 8. 830 - Payment Cancellation Response

   - Step 1: The bank responds to a payment cancellation request.

   - Step 2: The bank's EDI system generates the 830 transaction, detailing the response to the payment cancellation request.

   - Step 3: The 830 transaction is sent to the company.

   - Step 4: The company reviews the response and updates its records accordingly.


#### 9. 835 - Health Care Claim Payment/Advice

   - Step 1: The insurance provider processes a health care claim.

   - Step 2: The provider's EDI system generates the 835 transaction, detailing the payment and remittance advice.

   - Step 3: The 835 transaction is sent to the health care provider.

   - Step 4: The health care provider reconciles the payment with the submitted claims.


#### 10. 836 - Payment Cancellation Advice

   - Step 1: The bank issues advice on a payment cancellation.

   - Step 2: The bank's EDI system generates the 836 transaction, providing details of the cancellation.

   - Step 3: The 836 transaction is sent to the company.

   - Step 4: The company updates its records based on the cancellation advice.


#### 11. 837 - Health Care Claim

   - Step 1: The health care provider submits a claim for services rendered.

   - Step 2: The provider's EDI system generates the 837 transaction, detailing the claim information.

   - Step 3: The 837 transaction is sent to the insurance provider.

   - Step 4: The insurance provider processes the claim and issues payment.


#### 12. 838 - Trading Partner Profile

   - Step 1: A company sets up or updates information about its trading partners.

   - Step 2: The company's EDI system generates the 838 transaction, detailing the trading partner profile.

   - Step 3: The 838 transaction is sent to the trading partner or third party.

   - Step 4: The trading partner updates its records based on the profile information.


#### 13. 841 - Specifications/Technical Information

   - Step 1: The company shares technical specifications or documentation with a partner.

   - Step 2: The company's EDI system generates the 841 transaction, detailing the specifications.

   - Step 3: The 841 transaction is sent to the partner.

   - Step 4: The partner reviews and utilizes the technical information.


#### 14. 842 - Nonconformance Report

   - Step 1: The company identifies a nonconformance issue.

   - Step 2: The company's EDI system generates the 842 transaction, detailing the nonconformance.

   - Step 3: The 842 transaction is sent to the relevant party.

   - Step 4: The party addresses the nonconformance and takes corrective action.


#### 15. 844 - Product Transfer Account Adjustment

   - Step 1: The company requests an adjustment for a product transfer.

   - Step 2: The company's EDI system generates the 844 transaction, detailing the adjustment request.

   - Step 3: The 844 transaction is sent to the partner.

   - Step 4: The partner processes the adjustment and responds accordingly.


#### 16. 849 - Response to Product Transfer Account Adjustment

   - Step 1: The partner responds to a product transfer adjustment request.

   - Step 2: The partner's EDI system generates the 849 transaction, detailing the response.

   - Step 3: The 849 transaction is sent to the company.

   - Step 4: The company updates its records based on the response.


#### 17. 850 - Purchase Order

   - Step 1: The company places an order for goods or services.

   - Step 2: The company's EDI system generates the 850 transaction, detailing the purchase order.

   - Step 3: The 850 transaction is sent to the supplier.

   - Step 4: The supplier processes the order and prepares for fulfillment.


#### 18. 860 - Purchase Order Change Request - Buyer Initiated

   - Step 1: The company requests changes to a previously submitted purchase order.

   - Step 2: The company's EDI system generates the 860 transaction, detailing the change request.

   - Step 3: The 860 transaction is sent to the supplier.

   - Step 4: The supplier reviews and processes the change request.

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