EDI 850: Purchase Order
EDI 850 Definition
The EDI 850 Purchase Order document is a fundamental component of electronic data interchange (EDI) transactions, serving as a formal request from a buyer to a supplier for the supply of goods or services. It specifies the types, quantities, and agreed prices for products or services, as well as delivery schedules and payment terms. The EDI 850 streamlines the procurement process, reducing the need for paper-based orders and enabling faster, more accurate order processing.
What is EDI 850 Used for?
Buyers use the EDI 850 to electronically send purchase orders to their suppliers. Upon receipt, suppliers process the order within their order management systems, potentially responding with an EDI 855 Purchase Order Acknowledgment to confirm receipt and acceptance of the order. This automated process enhances efficiency, reduces errors, and improves the overall procurement cycle.
Key Elements of EDI 850
An EDI 850 document typically includes key elements to convey the purchase order information effectively:
- Transaction Set Header and Trailer: Marks the beginning and end of the EDI 850 document, encapsulating the purchase order details.
- Purchase Order Header: Provides general information about the order, including purchase order number, date, and order type.
- Buyer and Seller Identification: Details about the buyer and seller, including names, addresses, and contact information.
- Terms of Sale: Information on terms of sale, including delivery terms, payment terms, and any applicable discounts or allowances.
- Item Information: Detailed information on each item being ordered, including item numbers, descriptions, quantities, unit prices, and expected delivery dates.
- Shipping Information: Instructions for shipping, including desired shipping method, shipping location, and any special handling instructions.
Benefits of EDI 850
Utilizing the EDI 850 document offers several advantages:
- Efficiency: Significantly reduces the time and effort required to create, send, and process purchase orders.
- Accuracy: Minimizes errors associated with manual order entry, ensuring that orders are processed correctly.
- Faster Processing: Enables quicker order confirmation and fulfillment, improving supply chain velocity.
- Improved Supplier Relationships: Streamlines communication with suppliers, leading to better collaboration and service.
- Faster Processing: Enables quicker order confirmation and fulfillment, improving supply chain velocity.
EDI 850 Document Example
Here’s a simplified example of what an EDI 850 might look like in raw data format:
ST*850*0001
BEG*00*NE*PO123456*20241130
N1*BT*Buyer Company*92*12345
N1*ST*Supplier Company*92*67890
PO1*1*100*EA*10.00*PE*IN*Widget A*PD*Description of Widget A
CTT*1
SE*6*0001
Guide to EDI 850 Terms and Elements:
- ST (Transaction Set Header): Initiates the EDI 850 document, identified by a unique control number.
- BEG (Beginning Segment for Purchase Order): Provides basic information about the purchase order, including the order number and date.
- N1 (Name): Identifies the buyer (BT) and the seller (ST), including identification numbers.
- PO1 (Purchase Order Line Item): Details each item being ordered, including quantities, unit prices, item numbers, and descriptions.
- CTT (Transaction Totals): Summarizes the total number of line items in the order.
- SE (Transaction Set Trailer): Concludes the EDI 850 document, ensuring completeness and accuracy.
This example is designed to give a basic understanding of how an EDI 850 document might look, including the types of information it conveys. Remember, the actual implementation might vary based on specific business needs and partnerships.
Transform Your Purchasing with Comparatio
Ready to enhance your purchase order efficiency with EDI 850? Contact Comparatio today to discover how our EDI solutions can streamline your business transactions and improve your bottom line.
