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EDI 850

Understanding the Basics of EDI

EDI 850 

AN EDI 850 is a specific type of Electronic Data Interchange (EDI) document to be processed. The EDI 850 is a type of purchase order.  There are a number other type of EDI documents including the 856 advance ship notices and the 810 invoices. An EDI 850 is exchanged between computers that act on behalf of the companies; in EDI parlance these computers are often referred to as trading partners. The EDI 850 document, much like the other specialized EDI documents, must be exchanged with the trading partner in the specified format as prescribed by accepted standards.

EDI 850 in the EDI Communication Process

An EDI 850 document is the EDI documented format version of a paper order in a company’s purchasing system. During the EDI communication process, the buyer prepares the order (the EDI 850), has it approved, and then the translation process begins. The order is converted into an EDI compatible document—the EDI 850 purchase order. Next, the EDI 850 document must be transmitted to the intended party.

The Buyer’s Computer EDI 850

The buyer’s computer system sends the EDI 850 document directly to the trading partner or through a VAN.  A VAN acts as an intermediary between trading partners for the purposes of facilitating communications.  In this manner a VAN is similar to the US Post office. The VAN connects with the recipient's VAN (the supplier), and the transmission begins. The VAN is responsible for making sure that the EDI 850 document is sent and received (the document is sometimes referred to as a “mailbag”). The final destination computer is responsible for processing the EDI 850 order.

Transmitting the EDI 850

This transmission can be done in a variety of ways. The EDI 850 document can be sent through the Internet, a Bulletin Board System (BBS), a modem, or Value Added Network (VAN). Most EDI 850 documents are sent through a Value Added Network (VAN). The EDI 850 document is kept securethroughout the entire transmission process through a variety of security features, including passwords, user ID and encryption. The EDI 850 document is also kept authentic through a series of editing and checking procedures also done as part of the security process. Transmission of the EDI 850 document is a critical step that is often an afterthought for most companies  This can be a significant mistake since it means the EDI 850 document might be using improper communications means.

Translating the EDI 850

Now that the EDI 850 document has been received by the recipient, it must be translated into a usable format. EDI 850 translation software can be the interface between the EDI 850 document that was received and the computer’s infrastructure and applications. The translating software will take the EDI 850 document and translate it into a useable file format for the computer system (usually a file of fixed length, variable length, or XML tagged). A “mapper” is used to change the tagged file (formerly the EDI 850 document) into a format that is compatible with the ERP, a large, enterprise-wide system that coordinates all aspect of a company’s business communication. At this point, the EDI 850 document is not longer an Electronic Data Exchange document (written in computer code), but a useable purchase order file that a company can process.  This process can be reversed to send other documents that are often associated with the EDI 850 as is the case for EDI 810 documents (invoices).


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