EDI Essentials: 12 Codes Used in Procure-to-Pay

Learn about 12 common EDI codes you need for the entire Procure-to-Pay process in this EDI Essentials series.
EDI Essentials: 10 Common Codes 3PLs Need to Know
EDI Essentials: 7 Common Codes for Warehouse Management
EDI Essentials: 6 Common Codes in Transportation
EDI Essentials: 8 Common Codes You Need for Order-to-Cash
Read CINTAP’s entire EDI Essentials series!

Electronic Data Interchange (EDI) 

What exactly is Electronic Data Interchange (EDI)

It’s how companies communicate and share documents with each other in the modern world (business-to-business). EDI automates communication and business workflows- resulting in streamlined processes for your company.  

Electronic Data Interchange allows for processing bulk amounts of transactions very quickly. In the digital age, nearly every company in any industry needs a reliable EDI platform. 

Ideally, Electronic Data Interchange 

  • saves companies man-hours and money 
  • practically eliminates the time it takes to share information, and  
  • results in greater security and fewer errors overall.  

EDI codes for Procure-to-Pay 

Your business needs Procure-to-Pay to get (procure) everything it needs to run. This process is s a series of back-and-forth exchanges to requisition, purchase, and receive these goods and services.  

Procure-to-Pay (also called Purchase-to-Pay or P2P) can be complex, especially for larger enterprises. Using EDI transactions allows companies to automate quite a bit of their P2P interactions. 

12 of the most common Electric Data Interchange transaction codes for the Procure-to-Pay process are: 

(Note: for a complete list of transaction codes, visit https://www.edistaffing.com/resources/edi-transaction-glossary/#supplychain)  

Learn about 12 common EDI codes for Procure-to-Pay.

1. EDI 810 – Invoice 

EDI 810 is a document sent to a buyer from a seller. Just like all invoices, sellers send EDI 810 to notify buyers of the balance due and ask for payment. This invoice can also be used for several order types across industries. 

As an invoice, EDI 810 includes the invoice number and date, order details, all charges and the total balance due. It may also include payment methods accepted, payment terms, and possibly tax details. 

Like other EDI documents, EDI 810 ensures data security, and nearly-instant communication without errors. As a bonus, sending an electronic invoice may result in sellers getting paid faster. 

2. EDI 832 – Price/Sales Catalog 

EDI 832 is sent by manufacturers or suppliers to their trading partners. This EDI transaction shares the most recent product details and prices. Because this essential s EDI needs to be sent out a few times a year, it may not be part of the regular P2P process, but it is still an EDI.   

To give their customers as much information as possible, EDI 832 shares the catalog number/date, supplier data, product SKU or UPCs, product descriptions, per unit prices and minimum order amounts, and any ongoing promotions.  

As an electronic document, EDI 832 saves time and physical resources by being updated automatically, without re-publishing paper copies. Updating catalogs in this way also cuts down the amount of human error that would normally come with updating an entire catalog. And of course, like all EDI transactions, there is also the benefit of added encryption and security. 

 3. EDI 843 – Response to Request for Quotation    

EDI 843 is a document sent as an answer to EDI 840. Sellers and suppliers deliver all information requested by the buyer about their goods and services. 

Since it’s a response to EDI 840, this EDI transaction includes seller details, product description and pricing, delivery expectations, and any information relating to services rendered. 

Much like EDI 840, EDI 843 benefits all parties by providing security and accuracy in a highly convenient way! By sending encrypted documents, trading partners have the advantage of crystal-clear communication, with records of all bids made. 

4. EDI 850 – Purchase Order    

EDI 850 contains all relevant details about a purchase order. In most cases, this transaction set (the first step in the ordering process) is usually sent to a vendor. 

Conveniently, EDI 850 can have details for a single order, recurring orders, or a changed order. As an electronic purchase order, EDI 850 outlines the Purchase Order number, order date, and vendor details. Also included are the shipping and delivery details, pricing and billing information, item descriptions and identifiers, and payment terms. 

When using an EDI, all communications are secure against outside threats. In addition to this added layer of security, EDI transactions streamline operations between partners, sharing and updating information almost instantly. 

Learn about 12 common EDI codes for Procure-to-Pay.

5. EDI 856 – Advance Shipping Notice

EDI 856 is a transaction set most often used by sellers and distributors, as well as manufacturers and retailers. This EDI document notifies the shipment receiver before a shipment arrives at the store or distribution center. 

Information in EDI 856 includes the shipment number, shipping date (and delivery date), tracking details, and product details. These product details outline item details and numbers, packaging details, and UCC 128/G21 numbers. 

In addition to reducing time spent manually inputting shipping details into individual formats for each trading partner, using EDI 856 also provides all parties with real time updates regarding approaching deliveries. 

6. EDI 867 – Product Transfer and Resale Report 

EDI 867 is an EDI transaction between a reseller and a vendor. For example, a wholesaler or distributor will send EDI 867 to a manufacturer to give updates on sales, product shipping, and returns. 

Because EDI 867 is used by vendors to analyze data on their product and distribution success, there is a laundry list of data that needs to be included. Data such as reseller ID, product information, buyer details, sales and returns reports, product transfer details, and transaction totals. 

This EDI transaction is a tool that gives vendors a comprehensive view on their product movement. The data reported in EDI 867 automatically updates to reflect inventory and product movement, vendors are able to make informed decisions about where (geographically) to concentrate efforts, and hopefully boost their sales. Additionally, as an EDI transaction, this transaction saves companies from wasting time sending lengthy emails or making phone calls- electronic messages that are updated automatically make better use of each party’s resources. 

7. EDI 820 – Payment Order/Remittance Advice

EDI 820 shares payment information between buyers and sellers. This document is most often a reply to EDI 810 or 850 to either confirm the terms or make changes to the terms.  

This EDI transaction set shares information such as buyer and seller details, invoice number or PO number, the amount that is being charged, pertinent banking details, and payment tracking information. 

While EDI 820 provides users with the typical advantages of EDI transactions (data security, accurate and speedy communication, real-time updates, etc.), there is also the added benefit of an automated order process. When all parties are able to fully automate their ordering process, OTC moves much quicker and companies can handle a larger scale of trade.

8. EDI 824 – Application Advice 

EDI 824 is an electronic document exchanged between trading partners as a response to another EDI transaction. This document serves as a notification that either the previous EDI transaction needs changes made to it, or that is has been rejected. 

Since this document is sent in response to a previous EDI document, it needs to include: document number of previous EDI, date it was received, information for all trading partners, notice of rejection or changes that need to be made, and details for any errors made in the previous EDI. 

If there are any issues with EDI transactions, EDI 824 is a standardized transaction for handling that. Because it includes detailed and specific feedback, there is less back-and-forth between trading partners to resolve issues. Since this document, like many other EDIs, can be updated and sent automatically, it saves each company time spent manually looking over each rejected EDI document that comes in, while also providing secure communication between partners. 

Learn about 12 common EDI codes for Procure-to-Pay.

9. EDI 830 – Planning Schedule with Release Capability 

EDI 830 is an EDI transaction typically sent from a manufacturer to a vendor or supplier, outlining the schedule within a specific timeframe. This document is helpful in automating order fulfillment. 

EDI 830 can be as specific (or not) as needed, and includes information such as identification details of all parties, an expected distribution and order schedule, product SKUs and details, resource or order release authorization, delivery instructions, and any shipping information. 

A general benefit of most EDI documents is an added layer of security when communicating between trading partners, and streamlined information sharing. EDI 830 additionally provides information that sets up automated order fulfillment, a more productive distribution plan, and data on manufacturer needs. 

10. EDI 862 – Shipping Schedule 

EDI 862 is an EDI document sent between trading partners (typically one manufacturer to another, or to a wholesaler) to give updates on EDI 830 or to provide a shipping schedule within a set period.  

This document contains a lot of the same data as EDI 830 (a planning schedule), but may have some variation. Information shared with EDI 862 includes identification details of both the buyer and the vendor, shipping addresses, product SKUs and UPCs, packing and loading directions, as well as planned and expected shipping schedules. 

As a shipping schedule, EDI 862 can either supplement EDI 830 or stand independently. It provides manufacturers with up-to-date information on orders, expected shipments, and fulfillment needs: without manually compiling data for each update. 

11. EDI 860 – Purchase Order Change Request  

EDI 860 is an EDI document sent to a seller from a buyer regarding changes to EDI 850. 

Information included in EDI 860 outlines the PO number, buyer/seller details, and product descriptions. Additionally, EDI 860 includes changes in price, changes in product quantity or type, changes for an expected delivery date, and a brief explanation for all of these changes. 

By using EDI 860, communications between trading partners happen almost instantly. When all parties are aware of updates in shipments, trade is streamlined with less hiccups in the whole process. And as usual, all communication is more secure than with other communication methods. 

12. Bonus Code! 

If you didn’t see the transaction type your company needs for your Procure-to-Pay Process, good news! 

It’s possible for you to work with an integration platform to customize your own transaction type specific to your system, needs, and trading partners. 

Alt text: Learn about 12 common EDI codes for Procure-to-Pay.

CINTAP CLOUD AND EDI 

CINTAP Cloud as an Integration Solution for Procure-to-Pay 

CINTAP Cloud users don’t have to be limited to a rigid set of transaction types.  

No matter your industry, CINTAP is dedicated to walking each customer through solutions to every problem. And naturally, this includes creating customized transaction types for you, so you can get back the time and resources your company needs!  

As an integration platform, CINTAP streamlines EDI and business workflows. With CINTAP Cloud you can:   

  • accelerate your integration projects  
  • eliminate any redundancies 
  • simplify complex processes  
  • and provide real-time insights, so you (and your partners) have better tracking and visibility. 

All this while also offering huge savings compared to other providers in the iPaaS industry! 

Start optimizing today: 

Get CINTAP Cloud as your solution for Procure-to-Pay!  

You can learn more about us or get in contact with us to start optimizing your Procure-to-Pay process right away! 

Optimize your Procure-to-Pay on CINTAP Cloud.

Author- Carissa Getscher