As businesses adopt new ERP systems to improve supply chain efficiency, some growing pains are
inevitable. One example we’ve witnessed involves Helzberg’s new ERP system and clients submitting EDI
invoices to them for consignment or memo merchandise—items for which Helzberg doesn’t expect
invoices.
Here’s what’s happening, and how we can fix it.
The Issue
Helzberg recently upgraded their ERP platform, which now gives them deeper visibility into all
merchandise data. As a result, they’ve flagged a key discrepancy: they’re receiving invoices for
consignment/memo merchandise. However, Helzberg does not generate invoices for these items upon
receipt—only when the items are sold.
That distinction is crucial. Invoicing at the wrong time creates reconciliation headaches, delays payment
processing, and introduces unnecessary friction in a workflow that should be seamless.
Why This Matters
In a traditional sales model, invoices are generated upon shipment or delivery. But with consignment or
memo merchandise, ownership remains with the supplier until a sale occurs. Because Helzberg only bills
for sold items, receiving advance invoices throws off their system—and wastes time for everyone
involved.
The technical term here? Misaligned EDI document types. Helzberg still needs to receive 856 (Advance
Ship Notice) files to confirm delivery logistics, but they do not want to receive 810 (Invoice) files for
items that haven’t been sold yet.
The Solution
The path forward is clear: stop sending EDI 810 transactions for consignment or memo inventory.
That may require a simple rule change in our client’s ERP-to-EDI process. Or it could involve a filter that
distinguishes product types before mapping outbound documents. Either way, it’s a solvable issue—and
now is the time to fix it.
What’s Next?
We’ve provided Helzberg with a sample of the problematic invoice records. They’ve invited us to
strategize collaboratively—either via a quick call or email—to come up with a long-term solution.
If your systems are sending invoices for items still technically “on loan,” it’s worth revisiting your logic,
too. Your partners (and your AP team) will thank you.
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Need help adjusting your EDI workflows for consignment models? Let’s talk. We’ve seen this before, and
we know how to fix it—cleanly and efficiently.
