EDI 850 Explained
EDI 850 (Purchase Order)
Purchase orders (POs) are the foundation of business interactions. Learn about the EDI 850 by reading the guide below.
What is an EDI 850?
An EDI 850 (or Electronic Purchase Order), is a type of electronic data interchange transaction set that organizations use to request a purchase from a trading partner or vendor. When an EDI 850 is sent to a vendor, this is typically the first step in the ordering process, as it contains vital details about the requested purchase.
EDI 850 documents follow the x12 format established by the American National Standards Institute (ANSI), a non-profit organization that oversees EDI formats in the United States.
What is an EDI 850 Made Up of?
On a given order, the EDI 850 document contains all the necessary details required by the vendor, so they can properly receive, process, and fulfill the order. This includes:
- Purchase order number
- Purchase order date
- Seller and buyer information (names, addresses, contact information)
- Item details (item numbers, descriptions, quantities, prices)
- Delivery information (ship to address, delivery date, carrier information)
- Payment terms
- Discounts and/or taxes
- Total order amount
- Additional comments or delivery instructions
The American National Standards Institute (ANSI), a non-profit organization that oversees U.S. EDI formats, established the x12 format, which is used in every EDI 850 document. There are over 300 x12 standards in use today. These x12 standards determine the data required in every EDI 850 transaction to ensure data accuracy and security.
Want to learn about other EDI transactions? Continue reading...
EDI 850 Key Segments
EDI 850s can be displayed in two formats: a translated (human-readable) version, and a raw data format.
The raw EDI data, which is displayed in the example below, must be translated by your business system (ERP) to initiate the fulfillment process.
ST*850*0596~ BEG*00*NE*LCS209752**20191217~ N1*ST*CLARENDALE OF ADDISON*92*2032~ N3*1651 WEST LAKETREET~ N4*ADDISON*IL*60101~ PER*OC*JOE PECONIO*TE*6307495699~ PO1*1*1*CA*27.55**VN*231217~ CTT*1~ AMT*TT*27.55~ SE*10*0596~
How to Use an EDI 850
The 850 EDI document is one of the many digital EDI documents sent from business to business throughout the supply chain. Used by businesses that communicate via EDI.
The primary use of the EDI 850 is to initiate an order with a vendor (a seller). When the EDI 850 is received, the document provides all the needed information for the seller to fill the order. This EDI document is used in countless business networks, throughout many industries, and in their supply chains.
Retailers, wholesalers, manufacturers, etc., and any other sector where goods are being bought and sold, cannot be done without the EDI 850 Purchase Order.
EDI 850 Specification
This X12 Transaction Set contains the format and establishes the data contents of the Purchase Order Transaction Set (850) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used to provide for customary and established business and industry practice relative to the placement of purchase orders for goods and services. This transaction set should not be used to convey purchase order changes or purchase order acknowledgment information.
Sources
Accredited Standards Committee X12. ASC X12 Standard [Table Data]. Data Interchange Standards Association, Inc., Falls Church, VA. https://x12.org/index.php/products/transaction-sets
EDI 850 Compliance
To be EDI compliant when accepting an EDI 850 from a trading partner, it is mandatory to respond with other specific EDI documents.
These transactions include:
- EDI 810 Invoice - replaces the traditional paper invoice
- EDI 856 Advanced Shipping Notice - describes the contents of each shipment
- EDI 997 Functional Acknowledgement - confirms receipt of the EDI 850
- EDI 855 Order Acknowledgment - confirms you can meet the requirements of the purchase order
- EDI 860 Order Change Request - requests an update to the details on the original purchase order
See how our EDI solutions streamline your order processes below.
Simplify Your EDI 850 Transaction Exchange
| Step 1. Once, you've received an EDI 850 Purchase Order from your trading partner (let's say Clarendale of Addison in this example), Cleo automatically creates and sends an EDI 855 Purchase Order Acknowledgment to your trading partner without a blink. |
| Step 2. Once the 850 is acknowledged and you have shipped the order, Cleo is ready to generate and send an EDI 856 to your trading partner, to inform them of the contents of your shipment. |
| Step 3. Cleo Integration Cloud generates an automated EDI 810 invoice and sends the invoice to Clarendale of Addison as a receipt for goods purchased. |
|
Step 4. Your trading partner sends an EDI 820 Order/Remittance to send the terms of the impending payment for goods purchased. |
Cleo handles EDI 850s
(and so much more)
Choose the EDI Integration package that best fits your business:
- Create and deploy your own integrations using Cleo's intuitive, self-service design platform.
- Utilize Cleo's EDI-managed services team to design and build your integrations.
- Blend our EDI expertise and your business knowledge together in any manner that suits your use case.
