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Tips for avoiding EDI Chargebacks and improving Vendor Compliancy

January 29th, 2010

EDI chargebacks are issued when an invoice or ASN 856 Advanced Shipping Notice does not contain the correct information, is late or does not match the 850 Purchase Order or shipment. Chargebacks are often referred to as expense-offsets, fines or penalties. Whatever you call them, they can be costly and detrimental to your business relationship. Here are some tips for reducing your chargebacks and increasing vendor compliancy.

Know your Trading Partner
Most Trading Partners will provide you with documentation that will outline how to do business with them and how to maintain vendor compliancy. These documents may include a vendor guide, routing guide and an EDI Implementation guide. Reviewing these documents and knowing your trading partner’s requirements can help you avoid costly chargebacks.

EDI requirements are constantly changing, it is important that you have a method to be alerted of these changes so you can stay on top of them. If you do get a chargeback, contact your trading partner immediately to see if anything can be done. You may be able to get the chargeback waived or be granted a grace period to correct the document and retransmit.

Be Proactive
Track your documents and put a system in place to notify you of potential problems.

  • Develop a process to reconcile the number of shipments that should have gone out versus the number of ASNs sent.
  • Ensure you receive 997 acknowledgements for you documents.  eBRIDGE ePortal clients have the ability to set up handy email notifications to let them know if their documents have not been acknowledged within 24 hours.
  • If you are an ePortal client, be sure you are logging in regularly to check for errors and non-compliant documents. Catching these mistakes early and contacting eBridge Support can help you avoid chargeback’s altogether.

Your eBRIDGE solution will provide a certain level of document validation and will check for EDI compliancy, but without accurate data and proper document structure, there is room for error, so document tracking is essential.

Determine of the root cause of the problem and address it
If you do get a chargeback, it’s essential you understand why you received it. Do a root cause analysis to determine the source of the problem and make sure preventative measures are put in place to address the cause of the problem. Reconciling chargebacks for shipments that are weeks old can be a challenging task. Be sure you have a good chargeback tracking system so you know you have received a chargeback as soon as it’s issued and it can be addressed in a timely manner. If you do not understand why you received a chargeback, contact your trading partner and ask for details.

We understand the impact chargebacks can have on your business. Engaging the services of the eBRIDGE Help Desk or Professional Services Group can help you understand the root cause of your chargeback or help prevent them in the first place. If you have any concerns or questions, just give us a call at 905-631-8057.

We are here to help!

Cheers
Nazma

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