EDI2XML

15
Jun 2020
edi 850
(Last Updated On: July 2, 2020)

 

What does EDI stand for?

Electronic Data Interchange (EDI) is one of the fundamental protocols of business documents exchange, for companies collaborating in today’s business world.

Electronic Data Interchange (EDI) is an electronic exchange of business information between companies in a standardized format. This technology is used by businesses around the world as their main method to exchange business documents. Thus, EDI is a modern and effective document exchange standard and sometimes the only way to exchange documents between trading partners.

What is an EDI Purchase Order?

ANSI X12 EDI 850 Purchase Order Transaction Set simply named as EDI 850 or EDI X12 850 or just PO is a fundamental document in EDI. EDI 850 is a formal request sent by the buyer (purchasing company) to the supplier (seller) for demand of delivery of goods and/or services at an agreed price.

What information an EDI Purchase Order contains?

A typical EDI 850 Purchase Order includes the following information:

  • Purchase order date
  • Purchase order number
  • Item description
  • Item price and quantities
  • Payment terms
  • Discounts
  • Shipping details
  • Requested delivery date
  • Location(s) where the goods should be delivered to

How does an EDI service provider manage the EDI 850?

Typically, the buyer creates a Purchase Order in his internal ERP system (i.e. SAP, Microsoft Dynamics, JD Edwards, etc.). The Purchase Order can be created in the ERP system automatically or manually, depending on the business process of the company. Then, the generated Purchase Order is transferred to the EDI provider, or the provider will pick it up directly from the ERP system of the company. The EDI service provider than converts the PO document to the ANSI X12 EDI 850 transaction set. After conversion, the EDI 850 is sent to the supplier (or the destination).


Useful information:

If you are looking for an EDI Service provider or you are not satisfied with your current provider and want to get the best EDI services, find out here how to choose the right EDI Service Provider.


EDI Communication Protocols to transfer EDI 850

For the exchange of EDI documents, including EDI 850, there are various communication Protocols:

Moreover, one company may use different protocols to exchange EDI documents with its various trading partners. This usually happens because suppliers have to meet the requirements of their trading partners.

A typical set of EDI documents involved in EDI X12 850 workflow

For a trading relationship between business partners, a single EDI 850 transaction is not enough. Although a purchase order is a basic document, business partners generally would exchange the additional following documents:

  • EDI 997 Functional Acknowledgement – sent by the receiver of the transaction as a response to confirm receipt of EDI 850 or any other EDI document
  • EDI 855 Purchase Order Acknowledgment used by sellers to accept, reject, or modify a Purchase Order.
  • EDI 860 Purchase Order Change Request – used by buyer if necessary to make changes to a previously submitted Purchase Order; or to accept change initiated by the seller.
  • EDI 856 Advance Ship Notice –send by a seller to a buyer to describe the shipped items and type of packaging. ASN is sent immediately after the goods left the seller’s location.
  • EDI 810 Invoice –request for payment of goods or services

EDI X12 850 Transaction Set Structure

An EDI X12 850 (Purchase Order), as well as all other EDI X12 documents, consists of different segments where the initial segments are called Header, and the final segment is called Trailer:

Interchange Control Header (ISA) /Trailer (IEA)

 

Functional Group Header (GS) / Trailer (GE)

 

Transaction Set Header (ST) / Trailer (SE)

 

 

edi and EDIFACT structure


For more information about EDI structure, data elements and terminology learn our article:

EDI ANSI ASC X12 Standards – Technical Overview – 2020


EDI X12 850 Purchase Order Sample

The ISA, GS, ST elements contain Functional ID code, the sender’s and receiver’s ID code, date, time etc.

The transaction set envelope contains transaction detail, with information about a product, weight, size, color, volume etc.

ISA*00*          *00*          *ZZ*A1STORES    *12*5142645505     *190510*0728*|*00403*100000013*0*P*}

 

GS*PO*A1STORES*5142645505*20200510*0728*1013*X*004030

 

ST*850*1013

 

BEG*00*SA*2332233**20200510

REF*IA*66910

PER*BD*Contact Name*TE*123-455-7880

FOB*DF

DTM*010*20200517

DTM*001*20200525

TD5*****Carrier Routing*******CG

N1*ST*Towner Square Schooms*92*006

N3*Williston Towner Square*2100 11th St SW

N4*Williston*ND*58701

PO1*1*4*EA*4.15**UP*066810348563*IT*WACT750SP16-BLK

CTP**RTL*7.99

PID*F*08***Nike Boy Short Black sz M

PO1*2*6*EA*5.00**UP*066810349983*IT*WACT170SP16-AMP

CTP**RTL*7.99

PID*F*08*** Reebok Boy Short Abstract Print sz M

PO1*3*4*EA*5.25**UP*066810349747*IT*WACT790SP16-BLK

CTP**RTL*9.99

PID*F*08*** Puma Boy Short Red sz M

CTT*3

SE*22*1013

 

GE*1*1013

 

IEA*1*100000013

 

Although EDI 850 must comply with ANSI ASC X12 standard, a Purchase Order can vary greatly depending on industry and trading partners. Even in the same industry, EDI 850 may vary, as it is customized to the specific needs of the company.

EDI 850 Benefits and Opportunities

Profitability

  • speeds up the supply chain
  • saves on printing and document delivery
  • increases the speed of payment
  • saves resources for duplication, sorting and storage of documents

Efficiency

  • instantly notifies partners of new orders
  • eliminates manual input errors
  • reduces the number of adjustments
  • allows rational use of human resources

Integration

  • Integrates with any business system (ERP, CRM, Warehouse Management, accounting, etc.)
  • allows companies to build analytical reports
  • connects business partners from anywhere in the world

Security

  • electronic documents in encrypted and unchanged form
  • eliminates the risk of losing orders

About EDI2XML

Our knowledge, expertise and experience in EDI integration allow us to provide our customers with solutions that take business to a new level.

We cooperate with leading technology companies to develop cutting-edge solutions that can change your business. We use innovative solutions for various industries and help our customers solve the most complex EDI integration issues.

edi 850


 

RELATED POSTS: