EDI Academy – Despatch Advice

EDI Academy – Despatch Advice

The use of electronic data interchange in business transactions has led to the creation of a plethora of different messages over the years. From all of them, today we dedicate this issue of EDI Academy to one of the most relevant, for both suppliers and distributors: the Despatch Advice.

 

What is 856 ASN?

The 856 ASN designation is the name given to the EDI shipping note message in X12 standard, the language most widely used in the US market. The letters ASN stand for Advance Ship Notice. However, this is not the only terminology used to define waybills or shipping notes. In the EDIFACT standard, widely used in Europe, it is known as DESADV or Despatch Advice.

In any case, all these designations refer to the same concept. The EDI despatch advice message serves to verify that the goods received by the customer match the purchase order. 856 ASN displays the contents of the package and some added shipping information. This includes the order data, item description, product features, packaging type, markings, freight operator information and the layout of the goods within the transport equipment.

One peculiarity of the despatch advice is that it can be as simple or as explicit as required by the business transaction being carried out. For example, a brief version includes reports on the sender of the package, the receiver, delivery time, products shipped broken down line by line and identified with a code (usually EAN, GTIN or SKU) and the quantity of each item.

However, it is also possible to issue a more complete ASN or DESADV, including additional information such as a list of all the products on the pallet with the batch codes, corresponding expiry dates and packaging numbers, among other details. This option is increasingly popular among businesses nowadays, as the traceability is better.

 

How does the Despatch Advice work?

For a better understanding of how 856 ASN or DESADV work, we’ll explain step by step the communication flow followed by this EDI message:

  • The supplier issues the customer (distributor) a despatch advice when the goods are ready for shipping.
  • The EDI solution from EDICOM integrates this message into the distributor’s ERP automatically so they can access it easily.
  • At a glance, the client compares the despatch advice with the initial purchase order, as both documents are traced and any differences will be obvious. In fact, this confirmation can be performed automatically by the platform.
  • If everything is correct, issues a confirmation note to the supplier.
  • The warehouses receive the information on the new items due to arrive, so they can plan the loading and storage in advance.

 

What benefits do we get from the despatch advice?

The use of 856 ASN provides considerable advantages for both suppliers and distributors. On one hand, suppliers improve the goods delivery management process. With this message they are able to announce the shipment to their customers beforehand, but they also have a document endorsing the goods being delivered.

On the other hand, distributors can make their stock controls and incoming order processing more efficient. This is due to total traceability throughout the process, which lets us know when the goods will be sent, when they will arrive and all the details of the shipment.

To these advantages are added the benefits obtained in general from using EDI, ranging from automation to economic cost savings.

One step closer to e-invoicing in Costa Rica

One step closer to e-invoicing in Costa Rica

On February 14, Costa Rica is starting up its e-invoicing pilot project, which will include six large taxpayers and plans to spread this system throughout the country. The announcement of the breakthrough comes after the issuing on 7 October of Resolution DGT-R-48 on Authorization for use of e-invoicing and associated electronic documents. In addition, on November 3 the selection criteria for taxpayers required to issue e-invoicing once the pilot plan starts up were also published in the official state gazette.

The Directorate General of Taxation (DGT) has now defined the mandatory features for e-documents. The formats and technical specifications are detailed in the annexes and XML structures listed in the DGT web portal. In addition, the method for delivery, validation and preservation of electronic receipts is also stipulated (mandatory for a 4-year period).

Who will be required to issue e-invoicing in Costa Rica?

For the moment, the DGP has not revealed how migration to e-invoicing will take place, although it is foreseeable that it will be done gradually, in stages, as occurred in practically all the Latin American countries where e-invoicing use is now compulsory. Nevertheless, there is still no definite timeframe. What will be announced on December 15 will be the list of taxpayers required to start issuing e-invoicing from the start of the pilot scheme in February 2017.

In this regard, the DGT selection process will take into account the criteria published in the Gazette on November 3. Among them, the income level and activity sector of the taxpayers. These taxpayers will receive notification by email in the case of large companies, or through the Gazette for smaller taxpayers.

However, taxpayers who are prepared to face this technological leap can apply to join the pilot scheme voluntarily. To do so, they must send an e-mail to fe@hacienda.go.cr.

A system with great benefits

The spread of e-invoicing in Costa Rica will bring benefits, both for the public sector and private companies. With this technology, the DGT will be able to improve control and reduce tax evasion, as all the business transactions will be declared in real time. In addition, taxpayers will simplify tax compliance and automate part of their administrative procedures, which will increase productivity and cut economic costs. In fact, the savings from e-invoicing may reach 90% compared to the traditional process on paper.

Use of the e-Invoice in Latin America poses a double challenge for multinational companies

einvoicing_latam

By the end of 2016, approximately 30 billion electronic invoices will have been exchanged around the world. Billentis reports that this is a 10% to 20% increase from last year. Nevertheless, every region does not use the electronic invoice with the same frequency. Eleven billion of these invoices are processed in Latin America alone where tax authorities require mandatory e-invoicing as a method to reduce tax evasion. For this reason, e-invoicing has become one of the most relevant issues at the CIAT Technology Meeting held from October 10th through 12th in Miami.

 

A Unique Model

Multinational companies that want to do business in Latin America must install the proper technology to utilize the mandatory e-invoice. Mexico and Brazil lead the mandatory e-invoice initiative because practically 100% of taxpayers use it. This technology is also well established in Chile, Ecuador, Argentina, Peru and Nicaragua. In other countries like Colombia, Uruguay and Guatemala, the use of the e-invoice is growing little by little. Meanwhile, other countries like Costa Rica, El Salvador and Panama are still in the investigative stage.

Companies that sell services or products in the Latin American market must face a double challenge when dealing with the electronic invoice. One challenge is that in this region, technology is a system of fiscal control. This means that trade relations involve not only the seller and the buyer but the tax administration as well. Invoices are declared in real time, so it’s necessary to ensure connectivity with the systems of these public entities.

On the other hand, multinational companies also face the challenge of adapting to the different technical and legal requirements of each country.  This can reduce efficiency in many countries because it forces companies to use different technical solutions in every market and decentralizes administrative management consuming more resources as a result.

 

A Global Solution

That’s why EDICOM, which has been a global leader in electronic invoicing for more than two decades, has designed a solution to address these challenges. This solution is the Global E-Invoicing Platform that allows e-invoices to be issued in accordance with the regulations of more than 60 countries around the world while guaranteeing connectivity with their tax authorities. It is a comprehensive software designed to  adapt to other regions so multinational companies can centralize fiscal compliance activities in and beyond Latin America.

The way the Global E-Invoicing Platform functions is simple. It integrates with a business’ management system with the goal of automating the issuance, declaration, storage and receipt of invoices. It also provides an opportunity for companies to increase productivity, enhances safety and reduces costs. When compared to traditional e-invoice management, it has been estimated that this solution can increase a company’s savings by 90%.

 

If you want to know more about this solution, please contact EDICOM to request a live demonstration. Also, we recommend that you download our white paper titled, “EDICOM’s Expert Analysis: The Electronic Invoice in Latin America” to learn more about where the e-invoice is mandatory in Latin America as well as details about the Global E-Invoicing Platform and how it can affect your business.

 

EDI Academy – Web EDI

In this latest edition of EDI Academy, we explain what Web EDI is and how small or medium-sized businesses exchanging small document volumes can benefit from it Continue reading