EDI 855 Purchase Order Acknowledgment Transaction Specifications
1. What is an EDI 855 Purchase Order Acknowledgment?
An EDI 855 Purchase Order Acknowledgement is an EDI transaction set normally sent by a seller to a buyer in response to an EDI 850 Purchase Order. In addition to confirming the receipt of a new order, the document tells the buyer if the purchase order was accepted, required changes, or was rejected. EDI 855 is often required by large retailers and distributors and may need to be sent in a specified timeframe or at particular step in your order processing workflow to ensure EDI compliance.
This EDI transaction is not meant to take the place of an EDI 997 Functional Acknowledgement but should be sent in addition. EDI 850 notifies the buyer that the order has been both received and processed. Generally, the EDI 855 Purchase Order Acknowledgment includes line item detail about the accuracy of the order and your ability to meet the order’s requirements.
EDI 855 documents follow the x12 format set by the American National Standards Institute (ANSI), a not-for-profit organization that regulates EDI formats in the U.S.
The EDI 855 has several functions, including:
– Acknowledges receipt of a purchase order from a buyer
– Communicates seller’s intent to fulfill the order
– Reports any errors on the order, such as inaccurate pricing or part numbers
– Communicates issues with fulfilling the order, such as insufficient quantities
– For drop-ship orders, provides retailers with delivery status information to share with consumers
2. What are the Essential Components of EDI 855?
An EDI 855 document must include key details regarding a new order. These include:
- Details from the EDI 850 Purchase Order, including the PO number and date, product information and accepted quantities, and delivery information
- The seller’s vendor number
- Any changes, errors or issues that need to be addressed, such as:
- Inaccurate product identifiers
- Price discrepancies
- Inventory out-of-stocks
- Delivery date changes
- Backordered or cancelled quantities
- Discontinued items
3. How does a typical EDI 855 structure look like?
3.1 EDI 855 Format
3.2 The ANSI X12 EDI 855 Message Structure and Example
The ANSI X12 855 Purchase Order Acknowledgement message can contain a wide range of information and appear very different in various scenarios. From an entire order being accepted with no amendments to amending each of the items specific quantity and date, the content could be vastly different.
A typical 855 Message includes:
- Message Function Code, stating the acceptance, partial acceptance or rejection
- Purchase Order numbers and codes
- Dates of planned delivery
- Specific details relating to items or goods which cannot be supplied in full, and proposed amendments
- Reasons for rejection
- Transport and delivery pattern information
4. How Do I Use an EDI 855?
After a seller receives an EDI 850 Purchase Order, they may send an EDI 855 acknowledgement back. The primary use of EDI 855 is to confirm the receipt and processing of a new order and communicate the seller’s ability to fulfill that order. The EDI 855 generally includes reporting of any ordering inaccuracies that have taken place.
In the best-case scenario, an EDI 850 can be accepted as-is, and the EDI 855 is a simple affirmation that the order will move forward. However, if an EDI 850 document contains errors, or cannot be fulfilled as requested, the seller can use an EDI 855 document to alert the buyer to any changes or reject the order entirely.
In response to EDI 855, a buyer will often send back an EDI 997 Functional Acknowledgement, which confirms receipt. If the EDI 855 document specified changes to the order, the buyer has several options; for example, they can send back an EDI 860 Purchase Order Change Request, issue a new EDI 850 Purchase Order or reach out directly to the seller to discuss.
What are the equivalents of ANSI X12 EDI 855 in other EDI Standard Formats?
Within the EDIFACT, which is widely used throughout in Europe and Asia, an ORDRSP (Order Response) would be sent in place of an 855. If the company uses TRADACOMS as their format, they would need to send an ACKHDR, an Acknowledgement message.
5. EDI 855 Example in the EDI Workflow
The EDI 855 follows the receipt of a purchase order. For these reasons, the EDI 855 is almost always sent by the vendor as a form of acknowledgement. Through the EDI 855, the partners can audit which EDI exchanges were successful and which had problems. Like all other EDI documents, the EDI 855 must be generated through a specialized application, the EDI translator and then sent to the recipient through electronic means. The sender’s computer will typically perform the translation of the EDI 855 into an EDI format, while the communication will take place either through an Internet EDI connection or through a Value Added Network (VAN).
ANSI X12 EDI 855 Example in the EDI Workflow
Within EDI, messages are exchanged between the business partners in a typical sequence of files, dependent on the specific industry they are working within. The below example shows a standard Retail workflow, highlighting when the 855 Purchase Order Acknowledgement would be generated and sent, and other standard messages.
In a Retail workflow, the role of an ANSI X12 EDI 855 message shows up after either a 850 Purchase Order or 860 Purchase Order Change:
6.Benefits of the EDI 855 for Buyers and Sellers
6.1 ANSI X12 EDI 855 Benefits
There are multiple benefits for using ANSI X12 855 Purchase Order Acknowledgement message
- Instant confirmation or rejection of previously sent Orders
- Avoidance of manual entry of data, saving both time and overheads
- Data can be received automatically, helping all future orders and scheduling of delivery
- Proposed amendments to Orders can be made
- Feedback regarding a full or partial delivery of one or more orders
- Better supplier ratings due to fewer errors
- Cost reduction because of more efficient trading
6.2 What are the benefits of EDI 855?
Summarizing the benefits of using EDI 855 for both trading partners that have already been described in this article, the following points can be highlighted:
- Simplifies interaction with suppliers and increases work efficiency by reducing routine and inefficient operations (making control calls or writing e-mails to confirm or adjust a Purchase order).
- Using EDI 855, the supplier can promptly notify the buyer if any of the ordered products are not available.
- When generating EDI 855, the supplier can automatically book the goods for delivery at his warehouse.
- The buyer, having quickly received information about the unavailability of some ordered product, can promptly place an order from another supplier.
- Based on EDI 855, the buyer can predict the state of the inventory.
- Use PO Acknowledgment can significantly improve Advanced Ship Notice (EDI 856) accuracy.
6.3 Benefits of EDI 855 for buyers and sellers
As per EDI compliance, EDI 855 is encrypted in transit to protect buyers’ and sellers’ details. In this way, EDI 855 offers more security than any other communication method. It also eliminates the need to confirm new orders from customers through fax, phone calls or emails. In addition, the innovative features of EDI 855 help in reducing errors associated with manual retyping and numbers of customer service communications. EDI 855 alerts buyers to any type of order issues, preventing them from any type of issues relating to supply, payments or invoicing. From a buyer’s perspective, EDI 855 provides timely and automated visibility into a supplier’s commitment to accomplish an order. It reduces post invoice reconciliation issues and confirms e-commerce order details for customers.
EDI 855 for Retail Suppliers
EDI 855 is not implemented by all companies, although practice shows that this EDI document is one of the most important in retail B2B relationships between seller and buyer.
Therefore most of the major retailers such as Walmart and Costco have listed EDI 855 as mandatory EDI transaction for their suppliers.
Here is a typical business flow using EDI:
There are many scenarios of EDI workflow in the business relationship between the trading partners, thus many different types of EDI transactions may be involved in this process. All depending on the specifics of the company’s activities or the requirements of the business partner.
Below we will look at the simplest and most common business process in which the 855 is used.
- Step 1: The buyer sends the Purchase Order (EDI 850) to the supplier.
- Step 2: To confirm readiness to fulfill the order, the supplier sends the buyer a Purchase Order Acknowledgment (EDI 855).
- Step 3: As soon as the merchandise is shipped, the vendor sends an EDI 856 Ship Notice (ASN) to the buyer.
- Step 4: An invoice 810 will follow so to get paid by the buyer.
7. EDI X12 855 Purchase Order Sample
Here is an example of how different segments are structured in an EDI 855 transaction document:
ISA*00* *00* *ZZ*111111111 *01*007911209 *150129*2215*U*00401*000122406*0*P*>~
GS*PR*111111111*007911209*20150129*2215*3152*X*004010~
ST*855*3152~
BAK*00*AC*801222*20150129~
PO1*1*140*******UP*893647*VP*EXPI9301CTBLK*BP*999999999999 ~
ACK*IA*****010*20150205~
CTT*1~
SE*10*3152~
GE*1*3152~
IEA*1*000122406~
