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Understanding the Basics of EDI

EDI 855

Purchase Order Acknowledgment

Understanding the Basics of EDI

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What is EDI 855?

Based on the Accredited Standards Committee (ASC) X12 format, the EDI 855 is used to provide customary and established business and industry practices relative to a seller's acknowledgment of a buyer's purchase order. The EDI 855 is like a facsimile transmission confirming receipt of a purchase order.

EDI 855 & The Communication Process

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).

Transmitting the EDI 855

Once the EDI 855 is ready to be sent to the recipient, one of two methods are going to be generally used. The first, and still most popular method, is the use of a VAN. A VAN acts as an intermediary between the two parties, facilitating the communication of the EDI 855 and other EDI documents. Beyond simple delivery, the VAN is also responsible for ensuring that the transmission is secure throughout the entire process. This is always vital, but even more so with documents like the EDI 855 that may include private and confidential information. A second option that is growing in popularity is the use of a direct connection through the Internet to exchange the EDI 855 between two parties. This second form of communication is also know as AS2 communication. When using AS2 to send the EDI 855, the document is encrypted at the source and sent using secure Internet-based protocols to the recipient which then must have software capable of decrypting the EDI 855 prior to translation.

Translating the EDI 855

Once an EDI 855 is received, the first step must be to translate the document. An EDI 855, like any EDI document in its native format, is not meant to be read by a human operator. In the translation process, the EDI 855 will be converted into one of two forms - a "human readable" format, usually in the form of a report that is printed to a physical printer, or more likely into a file format that is easily imported into an ERP or accounting system. The translation of the EDI 855 into this more easily integrated format is the first key step in the reception of the EDI 855 before it can be used by the intended recipient.

Integrating the EDI 855 Into Your Business

Once the EDI 855 is translated into a computer-ready format, a secondary in-house process takes the new file with the information that originated in the EDI 855 and moves it into the recipient's ERP or accounting system. At this stage of the transformation the EDI 855 is now a document that can be identified and used by the recipient as the sender of the EDI 855 intended.

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