EDI 850 (Purchase Order)

What is EDI 850?

The EDI 850 Purchase Order is a transaction set used by a buyer to place an order with a supplier.
It replaces the traditional paper or email-based purchase order and automates the ordering process electronically.

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Purpose of EDI 850

• Communicate purchase information between trading partners.

• Specify items, quantities, prices, shipping instructions, and payment terms.

• Initiate the Order-to-Cash (O2C) cycle.

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Who Uses It

• Retailers send 850s to suppliers.

• Manufacturers send them to vendors for raw materials.

• Distributors send them to manufacturers for replenishment.

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Typical EDI 850 Business Flow

1. Buyer creates a purchase order in their ERP.

2. The system converts it into an EDI 850 format via middleware or VAN.

3. The supplier receives the 850 through their EDI system.

4. The supplier sends back:

   • EDI 855 (Purchase Order Acknowledgment)

   • EDI 856 (Advance Ship Notice)

   • EDI 810 (Invoice)

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EDI 850 in the Order-to-Cash Cycle

Step	Transaction	Purpose
1	850	Buyer sends Purchase Order
2	855	Seller acknowledges the order
3	856	Seller sends shipment notice
4	810	Seller sends invoice
5	997	Functional acknowledgment for each transaction

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Benefits of Using EDI 850

• Eliminates manual order entry.

• Reduces errors and processing time.

• Speeds up order confirmation and fulfillment.

• Improves buyer-supplier collaboration.

• Enables real-time order visibility.