What is ANSI X12?

 

What is ANSI X12?

ANSI X12, commonly referred to simply as X12, is a widely used Electronic Data Interchange (EDI) standard developed by the Accredited Standards Committee (ASC) X12, which operates under the American National Standards Institute (ANSI). It defines a standardized electronic format for business transactions, allowing organizations to exchange data in a structured and automated way.

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Purpose of ANSI X12

• Automate business-to-business (B2B) data exchange.

• Eliminate manual data entry and paper-based processes.

• Facilitate quick and accurate data transfer between trading partners (e.g., suppliers, retailers, logistics providers, banks).

• Ensure data consistency and interoperability between different systems and organizations.

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Key Characteristics of ANSI X12

Feature	Description
Format Type	Plain text, structured with delimiters.
Industry Focus	Originally for North America, now used globally in supply chain, finance, healthcare, etc.
Supported Transactions	Purchase Orders, Invoices, Ship Notices, Payment Remittance, Inventory Reports, etc.
Data Segments	Divided into segments, elements, and sub-elements.
Versions	Example: X12 4010, 5010, 6020, 7010 (each version has format/field differences).
Flexibility	Can be customized within certain limits to meet partner-specific needs.

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Example ANSI X12 Transaction Types

Transaction Set	Description
810	Invoice
850	Purchase Order
856	Advance Ship Notice (ASN)
820	Payment Order / Remittance Advice
997	Functional Acknowledgment
940	Warehouse Shipping Order
214	Transportation Carrier Shipment Status
834	Benefit Enrollment (Healthcare)

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High-Level Structure of an X12 Document

1. ISA (Interchange Control Header) – Begins the entire transmission.

2. GS (Functional Group Header) – Groups transaction sets of the same type.

3. ST (Transaction Set Header) – Begins a single business document (e.g., an invoice).

4. Transaction Body – Contains data segments like N1 (name), IT1 (item), etc.

5. SE (Transaction Set Trailer) – Ends a single business document.

6. GE (Functional Group Trailer) – Ends the functional group.

7. IEA (Interchange Control Trailer) – Ends the interchange transmission.

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Example (Simplified 850 - Purchase Order)

ISA*00*          *00*          *ZZ*SENDERID       *ZZ*RECEIVERID     *230711*1234*U*00401*000000001*0*T*:
GS*PO*SENDERID*RECEIVERID*20230711*1234*1*X*004010
ST*850*0001
BEG*00*SA*12345**20230711
REF*DP*123
N1*ST*John's Warehouse*92*56789
PO1*1*10*EA*15.00*PE*BP*ABC123
CTT*1
SE*7*0001
GE*1*1
IEA*1*000000001

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Common Industries Using X12

• Retail – Orders, invoices, inventory.

• Manufacturing – Material orders, shipping, product catalogs.

• Logistics/Transportation – Shipment status, delivery confirmations.

• Healthcare – Claims (837), enrollment (834), remittance (835).

• Finance – Payment instructions, remittance advices.

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Benefits of ANSI X12

• Streamlines operations.

• Reduces data entry errors.

• Accelerates transaction processing.

• Improves partner relationships.

• Supports compliance with trading partner requirements.

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Here’s a visual diagram of a typical ANSI X12 message flow between two trading partners:

┌─────────────────┐         ┌────────────────────┐         ┌─────────────────┐
│   Company A     │         │     EDI VAN /      │         │   Company B     │
│ (Sender System) │────►────│   Communication    │────►────│ (Receiver System)│
│ ERP / WMS / TMS │         │  Network / API /   │         │  ERP / WMS / TMS │
└─────────────────┘         │  Direct Connect    │         └─────────────────┘
        │                    └────────────────────┘                │
        │                                                          │
        ▼                                                          ▼
┌────────────────────────────────────────────────────────────────────────┐
│                        X12 Document Flow Example                       │
├────────────────────────────────────────────────────────────────────────┤
│ ISA - Interchange Control Header                                       │
│ GS  - Functional Group Header                                          │
│ ST  - Transaction Set Header (e.g., 850 Purchase Order)                │
│ ...  Business Data Segments (PO1, N1, etc.)                            │
│ SE  - Transaction Set Trailer                                          │
│ GE  - Functional Group Trailer                                         │
│ IEA - Interchange Control Trailer                                      │
└────────────────────────────────────────────────────────────────────────┘
        │                                                          │
        ▼                                                          ▼
   ┌──────────┐                                             ┌────────────┐
   │ Mapping  │                                             │   Mapping  │
   │ (Convert │                                             │  (Convert  │
   │ ERP Data │                                             │ to ERP Data│
   │ to X12)  │                                             │  from X12) │
   └──────────┘                                             └────────────┘

Explanation of the Flow:

Step	Process
1	Company A's ERP/WMS generates data (e.g., Purchase Order).
2	EDI translator maps the internal data format to X12 850 format.
3	X12 message wrapped in headers (ISA, GS, ST) is created.
4	Message is sent through an EDI VAN, AS2, FTP, API, or other secure channels.
5	Company B receives the X12 message.
6	EDI translator on Company B’s side converts the X12 850 into their internal format.
7	Company B’s ERP processes the Purchase Order.

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