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EDI 850 Purchase Order

EDI 850 also known as EDIFACT ORDERS and X12 850 represents
an electronic purchase order used to request demand for goods or services.

850

EDI 850 Purchase Order

EDI 850 also known as EDIFACT ORDERS and X12 850 represents an electronic purchase order used to request demand for goods or services.

The ANSI X12 EDI 850 Purchase Order Transaction Set or simply, EDI 850 or PO is a fundamental document used when placing an order for goods or services. It is a formal request sent by the buyer, i.e., purchasing company to the supplier or seller for delivery of items at the agreed price. EDI 850 is one of the most commonly used supply chain documents in general merchandise while EDI 875, its counterpart is reserved for grocery items. This electronic purchase order should be a part of automated EDI to be utilized by a purchasing company to place an order to be shipped to a distribution center, store, or end-user. It can either contain a single ship-to location or multiple locations, such as cross-dock orders.

EDI 850 Structure

The EDI X12 850 Purchase Order consists of different segments that include varied information.

The information or details included in EDI 850 (Purchase Order) documents are grouped into segments and elements which are specified in the ANSI X12 EDI 850 transaction set. The EDI 850 purchase order message document is sent, received, and processed by EDI software solutions which can either be on-premise software or EDI cloud service. For a smooth and automated process, it is essential to follow all the standards of X12 EDI 850 else there are chances of errors or documents might not reach the supplier. An EDI 850 message includes:

  • Products ordered and their respective costs
  • Quantities ordered
  • Requested shipping/delivery date
  • Shipping instructions
  • Invoicing information, such as purchase order data and number
  • Logistics provider details
  • Ship to address (single or multiple ship-to locations as for cross-docking orders)

Benefits of EDI ANSI X12 850

EDI 850 offers several benefits to suppliers and buyers, depending on the integration and automation of transactions.

Saves Time

Manual order submissions demand a lot of time but EDI 850 documents reduce this time. It eliminates manual receiving and entering purchase orders and submitting them which allows companies to focus on strategic and value-driven tasks.

Enhanced Efficiency

EDI 850 improves the efficiency of the entire workflow and gives better results by reducing costly errors and the number of adjustments. Also, partners are notified of new orders and human resources are used rationally.

Integration

EDI 850 is highly recommended as it integrates with different business systems easily, such as CRM, ERP, accounting, warehouse management, etc. It also enables companies to prepare analytical reports and connects partners from anywhere.

Accurate Data

Faster Delivery: It also potentially increases targeted production and delivery processes. This further helps customers and suppliers to reduce on-hand inventories and can establish a Vendor Managed Inventory (VMI) business.

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