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EIDX Financial Scenarios - Supporting Documentation

General Information and Considerations

Special Notes:   

Financial Models:  General Information and Considerations


Definitions

Additional Charges - Buyers may incur changes for items that will not physically be received at the buyer’s receiving dock. Examples include freight, tax, tooling, programming, and other miscellaneous charges.

Bank - An EDI capable financial service provider without VAN capabilities.

Bar Code Serial Number - A bar code serial number is a number contained on a label in a shipment that is used to identify the received product. This number is often transferred within a Advance Ship Notice / Manifest transaction set.

Bundled Payment/Remittance - The process where payment is accompanied by its associated detail.

Credit - The deduction of a payment made by a debtor from an amount due. In an accounting ledger, an entry on the right side of an account.

Debit - An item of debt as recorded on an account.  In an accounting ledger, an entry on the left side of an account; the process where the payee retrieves payment in a mutually agreed upon process.

EIA Bar Code Standard 556-A - The Electronics Industry Association (EIA) bar code standard is EIA 556-A. The intent of this standard is to facilitate automation within shipping, distribution, transportation and receiving operations using bar code technology. This label should be affixed to outer shipping containers, boxes, cartons, pallets, cases, barrels, etc. This standard is primarily intended for use by trading partners in manufacturing, distribution, industrial and other non-retail commercial applications. Complete description and usage of this Standard is included in the EIA-556A Standard.

E
valuated Receipts Settlement (ERS) - A process for authorizing payment for goods based on actual receipts with purchase order data, when price has already been negotiated. The basic premise behind ERS is that all of the information in the invoice is already transmitted in the shipping documentation. Therefore, the invoice is eliminated and the shipping documentation is used to pay the vendor.

Non-Recurring Engineering (NRE) - Non-reoccurring engineering charges are charges associated with tooling and design of product.

Pay-On-Use - Pay-on-Use is a process where payment is initiated by product consumption, i.e., consignment stock based on withdrawal of product from inventory. This process is popular with many European companies.

Payee - The party that receives payment.

Payer - The party that initiates payment.

Payment Obligation Identifier (POID) - A unique identifier associated with the product delivery is the Payment Obligation Identifier (POID). This unique identifier is used throughout the process, particularly on the remittance advice. POID is normally generated by the seller and is associated with the shipment information. In some cases the POID is generated by the buyer or a third party, but this practice is not an electronic industry standard. The POID must be available at the time of shipment, be associated with the shipping documents, and take precedence over all other unique identifiers associated with the shipment. The buyer and seller must understand the importance of the POID in maintaining order management, accounts payable, and accounts receivable systems. There must be a one-for-one relationship between the POID and the accounts receivable entry. This facilitates the account reconciliation process when the payment occurs. However, there can be multiple POIDs referenced in one payment. The details must be identified in the remittance advice. The POID becomes the payment reference number and must be maintained in both buyer and sellers’ systems to ensure proper payment reconciliation.

  • Air Waybill
  • Bar Code Serial Number
  • Bill of Lading
  • Invoice Number
  • Packing List
  • Shipment Identification Designator (SID)

Other industries may use different identifiers.

Shipment Identification Number - The Shipment Identification Number (SID) identifies a specific Shipment Notice/Manifest transaction set and is identified in Beginning Shipment Notice/Manifest segment in the data element BSN02. The Ship Notice Number and the SID Number are often used interchangeably.

Third-Party Service Provider - A party other than the principals that takes on one or more of the obligations of the principals in a transaction.

  • Example:  In financial business processes, a trusted partner, but not a financial institution, contracted to manipulate financial data.  Examples: outsourced payables/receivables company, accounting firms, or VANs.

Unbundled Payment/Remittance - The process where payment is delivered separately from its associated detail.

Value Added Bank (VAB) - An EDI-capable financial service provider with VAN capabilities.

 


 

Last updated 03 January 2003