Red "rejected" stampIntroduction: The EDI 824 – known as the Application Advice – is a silent hero in the EDI world. It communicates the status of a sent transaction and allows for quick resolution of errors, so ignore it at your peril!

How Will This Help Me? This post outlines the value of an 824 and explains how it can reduce your errors and improve your cash flow.

Understanding the 824: Trading Partners send the 824 Application Advice to convey the status of an EDI document that was sent to them. Although it can be used for any status, it’s most often used to send document rejections. For example, when an 810 Invoice doesn’t match the purchase order, the customer will send an 824 with details about the discrepancy.

The Difference Between a 997 and an 824: A 997 Functional Acknowledgment verifies receipt of a document into the partner’s EDI system and confirms that the document matched the EDI standards (passed syntax). It tells you that the document’s structure was correct. An 824 verifies receipt of a document into the partner’s business system and confirms that the document matched their expectations. It tells you that the document’s content was correct. For example, you send your customer an 856 Advance Ship Notice to notify them that a shipment is on the way. They return a 997 confirming receipt. Then they send an 824 that says the 856 was rejected because the shipped quantity was greater than their ordered quantity. The 997 tells you they got it, but the 824 tells you they aren’t going to process it.

The Value of an 824: 824’s provide real-time updates of document rejections, allowing you to correct and resend before the error affects your supply chain. For example, if an 856 is rejected you can correct and resend before the truck arrives, allowing successful receipt of the shipment. 824’s also shed light on recurring errors, allowing you to make corrections to data and/or business processes to address root cause and eliminate the error. When used correctly 824’s reduce time spent on errors and improve receivables, which ultimately improves cash flow.

What To Do With Your 824’s: Many companies treat 824’s as an EDI or IT function. However, because the 824 relates to document content it usually requires business knowledge to resolve. For example, if an 824 says an 810 was rejected because the price is wrong, how will IT know the correct price? A better option is to translate your 824’s into human-readable format and route to the correct business users for resolution. For example, 856 rejections are sent to the warehouse so they can correct the shipment information, while 810 rejections are sent to accounts payable so they can correct the invoice.

What NOT To Do With Your 824’s: Don’t ignore your 824’s. Many companies acknowledge 824’s but don’t process them any further, believing they’re an “extra” document without much value. Nothing could be further than the truth. 824’s are business-critical documents that provide invaluable insight into your OTC process. Make sure you use them to your best advantage!

If you’re not using your 824’s effectively, DCS can help. Contact us to review your current 824 process and discuss options for improvement.