Effective inventory management optimization can make or break a distribution or manufacturing company. Often times your customers dictate that you comply with their EDI best practices. Having the right EDI system integrated with your inventory management software saves your company countless hours and increases profits.
The EDI 997 document, known as the Functional Acknowledgment or FA, is sent as a response to other EDI transactions received. An EDI 997 Functional Acknowledgement is an electronic version of a receipt, acknowledging that an EDI document, or a group of EDI documents, was received.
Proof of Technical Accuracy
However, more than just a receipt, the EDI 997 Functional Acknowledgment is an extremely valuable document from a technical standpoint. EDI 997 is proof that the sender’s EDI documents were successfully validated by the recipient’s EDI system, and is, therefore, key to ensuring the integrity of the EDI process.
At the most basic level, the acknowledgement will only contain an acceptance or rejection notification. However, as mentioned before, your trading partner’s EDI translation software will perform some validation before sending an EDI 997. For this reason, some trading partners send more detailed EDI 997s that describe individual data elements containing syntax errors when rejections occur.
It is important to note that when you receive an EDI 997 in response to a transaction you sent previously, you only know that your document has arrived and has been processed by the recipient’s EDI translation software. The EDI 997 does not provide any indication that your trading partner agrees with the contents of your prior transaction, or that the transaction met all their business requirements. For example, an EDI 997 sent in response to an EDI 810 (invoice) transaction does not indicate that the pricing or terms in the invoice were accepted by the buyer, only that the invoice transaction was received and identified successfully.
Structure and Composition
Part of the EDI Functional Acknowledgment document contains envelope information. The envelope information specifies which company is sending the document and which company is receiving the document.
Each EDI 997 Functional Acknowledgment document has data organized into segments and data elements. Each segment contains at least one data element. Each data element is a data field. Examples of data elements on the Functional Acknowledgment include vendor number, item, quantity, price per item, street address, city, state and zip code, just like on a paper Functional Acknowledgment.