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EDIFACT message guide · Finance

RECECO Credit risk cover

The UN/EDIFACT message used between factoring companies and their clients to request and grant credit protection on buyers.

Sent by
Seller (factoring client) or factoring company
Received by
Factoring company or seller
Standard
UN/EDIFACT · Batch message
X12 equivalent
No direct equivalent

What is the EDIFACT RECECO message?

RECECO is the UN/EDIFACT credit risk cover message. The directory explains that factoring companies provide their clients, the sellers, with protection against the risk of credit losses on sales to buyers, with cover granted for each approved buyer, and the message is used to request, grant, change or cancel that cover.

Sellers need to know how much they can sell to each buyer on protected credit. The factor answers cover requests with an approved limit, which the seller's credit management uses to release orders.

How the EDIFACT RECECO message worksDiagram of the UN/EDIFACT RECECO Credit risk cover message. Seller (factoring client) or factoring company sends it to factoring company or seller. It usually starts the exchange. Inside the UNB and UNH envelopes, the directory D.21A requires, in the start of message: BGM (Beginning of message). 2 conditional segment groups are listed by their trigger segment.How the EDIFACT RECECO message worksCredit risk cover: who sends it, where it fits and what the directory marks mandatory1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeRECECOSENDERSeller (factoringclient) or factoringcompanyRECEIVERFactoring company orsellerCONTRL syntax report back, if agreedUSUALLY FOLLOWED BYNo business reply expected2 WHAT DIRECTORY D.21A REQUIRESInterchange: sender and recipient IDsUNB … UNZMessage RECECOUNH … UNTSTART OF MESSAGEBGMBeginning of messageBODY AND SEGMENT GROUPS+ 2 conditional groups, starting with:NADDOCBlue box: mandatory segment group. Conditional groups are listed by the trigger segment that starts them; a group is sent only when its data applies.Conditional segments outside groups are not drawn.Structure: mandatory segments and groups in the UN/EDIFACT directory D.21A listing for RECECO. Your trading partner's implementation guide adds itsown requirements.
How the EDIFACT RECECO message worksDiagram of the UN/EDIFACT RECECO Credit risk cover message. Seller (factoring client) or factoring company sends it to factoring company or seller. It usually starts the exchange. Inside the UNB and UNH envelopes, the directory D.21A requires, in the start of message: BGM (Beginning of message). 2 conditional segment groups are listed by their trigger segment.How the EDIFACT RECECOmessage worksCredit risk cover: who sends it, where it fits andwhat the directory marks mandatory1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeRECECOSENDERSeller (factoringclient) orfactoringcompanyRECEIVERFactoringcompany orsellerCONTRL syntax report back, if agreedUSUALLY FOLLOWED BYNo business reply expected2 WHAT DIRECTORY D.21A REQUIRESInterchange: sender and recipient IDs(UNB … UNZ)Message RECECO (UNH … UNT)START OF MESSAGEBGMBeginning of messageBODY AND SEGMENT GROUPS+ 2 conditional groups, starting with:NADDOCBlue box: mandatory segment group. Conditionalgroups are listed by the trigger segment thatstarts them; a group is sent only when its dataapplies. Conditional segments outside groups arenot drawn.Structure: mandatory segments and groups in theUN/EDIFACT directory D.21A listing for RECECO.Your trading partner's implementation guide adds itsown requirements.

How to read this diagram: the top row shows who sends RECECO, to whom, and which messages usually come before and after it. The lower part shows what the directory D.21A itself requires: the envelopes around RECECO and the segments and segment groups it marks mandatory. Conditional groups are listed by their trigger segment rather than drawn in full. This is the directory's minimum, not a trading partner's requirement: a message implementation guide, such as an industry subset or a partner’s own guide, usually makes some conditional groups mandatory, restricts the codes and may use an older directory.

Expand diagram Download SVG

When it is used

  • Requesting credit cover on a new buyer
  • Requesting a higher limit for an existing buyer
  • Receiving approvals, reductions or cancellations of cover

Where it fits in the message flow

This message RECECO Credit risk cover

No other message routinely comes directly before or after RECECO; it is exchanged when the business event occurs. If the partners agree, the receiver confirms each interchange with a CONTRL syntax and service report.

Structure

Mandatory segments in RECECO (directory D.21A)

In UN/EDIFACT directory D.21A, the RECECO message has 18 segment positions arranged in 2 segment groups. These are the segments and segment groups marked mandatory at message level, in order; a mandatory group is shown with the segment that starts it. Segments inside conditional groups are needed only when the group is used. This is the directory’s requirement, not your trading partner’s: each partner’s message implementation guide names the directory it uses, often an older one such as D.96A or D.01B where the structure can differ, makes some conditional segments mandatory and restricts the codes.

  • UNH
  • BGM
  • UNT

Practical example

RECECO in practice

A textile wholesaler wins a new retail customer. It sends its factor a RECECO requesting credit cover of 200,000 euros on the buyer. The factor assesses the buyer and replies with approved cover of 150,000 euros, which the wholesaler sets as the customer's credit limit.

Implementation

Implementation considerations for RECECO

  • Identify buyers with the identifiers the factor uses.
  • Keep approved limits synchronized with credit management.
  • Act on reductions or cancellations of cover promptly.
  • Follow the factoring agreement's procedures.

How ECOM helps

Automate RECECO with ECOM

Industry

Financial Services

Secure file transfer and B2B integration for banks and financial institutions.

Solution

Order-to-Cash Automation

Automate the flow from purchase order to payment across every customer channel.

Solution

Financial Document Automation

Automate invoices, remittances, payment files and bank statements from capture to posting.

Compare X12 and EDIFACT, or see answers to general questions in the EDI FAQ.

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