What is an 850 Purchase Order?

A Purchase Order Transaction Set (850) for use within the context of an Electronic Data Interchange (EDI) environment is for trading partners to order goods or services. It provides customary and established business and industry practices relative to the placement of purchase orders and often includes information generally found on a paper purchase order such as:

  • Item, prices and quantities ordered
  • Shipping details
  • Payment terms
  • Discounts

Implementing EDI 850s enable you to streamline the supply chain, eliminating the need to receive orders via fax or email and manually re-key the information into different systems. By automating you are able to keep the cost of business down, freeing up resources and reducing human error.

Sending/Receiving an EDI 850

It is easy for a system to send/receive EDI 850s. For the most part, the transmitting is done through the Internet or Value Added Network (VAN). Today, most EDI transmissions are done through the internet using AS2 or secure FTP, eliminating the need for an expensive VAN. The file is kept secure using encryption to keep the data safe.

Translating the EDI 850

Once an EDI 850 document has been received, it must be translated into a usable format for your system. Many organizations have their own standard set of definitions for EDI 850s and companies use various platforms to configure and translate these different documents, usually a file of fixed length, variable length or XML tagged. Once the EDI 850 is translated, the order information can be synced to your internal system of record such as an ERP, eliminating the need for manual data entry. Once the information exists in your systems, you can quickly process the order. Typically, the next step is to send back similar documents such as an EDI 855 (Purchase Order Acknowledgement) and an EDI 856 (Advance Shipment Notice).

Simply accepting an EDI 850 from your trading partner is usually not sufficient for full EDI compliance. Other EDI transactions in response to the purchase order to consider would be:

  • EDI 997 Functional Acknowledgement – to confirm receipt of the EDI 850
  • EDI 810 Invoice – to replace the traditional paper-based invoice
  • EDI 856 Advance Ship Notice – to describe the contents of each shipment and how items were packed.
  • EDI 855 Order Acknowledgement – sent in response to the EDI 850 to confirm you can meet the requirements set in the purchase order
  • EDI 860 Order Change Request – sent to request an update to the details on the original purchase order

Data Communication Solutions (DCS) can help you efficiently meet the requirements of your trading partners. DCS EDI Consultants have been assisting customers since 1991 in developing  the best approach all your transaction formats and EDI integration. Contact us today to learn how.