A High Level View of Purchase Order Acknowledgments (POA)

 

POA Basics

A POA (Purchase Order Acknowledgment), primarily allows a supplier to provide their buyer with feedback on any changes they’ve initiated that may result in changes to the buyer’s purchase order. A POA also has a numerical X12 transaction code, known as an 855.

POA statuses can be applied to the whole PO and/or at the item level. The supplier may accept the PO (no change, no detail), accept the PO (with change, with detail), reject, etc. The supplier may also provide a status on a specific item or items on this PO, including the statuses of accepted, backordered, on hold, etc.

So now that we understand the purchase order acknowledgements purpose and function, let’s take a look at an example of an 855  flow.

The Supplier and Their EDI Provider

The supplier logs into their web edi account, opens a PO and creates a Purchase Order Acknowledgement against that PO. The supplier accepts all items on the PO and completes all required fields on the POA form, which is then “sent” and validation is executed against the POA to ensure compliancy.  Next, a POA flat file is processed by the supplier’s EDI provider. Using EDI Werx’s as example, our translator will convert the flat file to an 855. EDI Werx establishes an FTP connection to Easylink and uploads the 855. The 855 is received on EDI Werx’s VAN, which queries the ISA envelope, identifies the sender and receiver IDs and checks if these IDs are associated to mailboxes on its network. VAN confirms the sender ID (ISA05,06) has a mailbox but the receiver (ISA07,08) does not and proceeds to load the 855 to EDI Werx’s mailbox. VAN checks it’s interconnect table and finds the receiver ID is interconnected to GXS – sending the 855 to GXS via S/FTP.

The Retailer: Final Steps In Processing the POA

The 855 is then received on the trading partner/retailer’s VAN. We’ll use GXS as an example. VAN queries the ISA envelope, identifies the sender and receiver IDs and checks if these IDs are associated to mailboxes on its network. It confirms the receiver ID (ISA07,08) has a mailbox but the receiver (ISA07,08) does not and will load the 855 to the retailer’s mailbox.

The retailer establishes an FTP connection to GXS and downloads the 855 from their VAN mailbox, the 855 is processed by the their EDI translator and converted to a POA flat file. A POA flat file is imported into the retailer’s ERP system and it’s content loaded. The Purchase Order Acknowledgment is reconciled to the original PO and provides an acknowledgement status.

 

This is the complete step-by-step process of the 855 flow. Get in touch for more details on how we can assist in B2B processing.

 

 

Get To Know The 850 Flow – From Retailer To Supplier

 

850 flow chart

Introduction to The 850 Flow

Sending purchase orders are an essential part of any B2B operation.  In the EDI world, a purchase order is given the code ‘850’. When an 850 is sent from the retailer, known as the trading partner, it is processed through multiple channels before reaching the supplier. This process is what we call the 850 flow. Read further to discover what’s really involved in each step of the 850 flow.

The Retailer

The retailer creates a purchase order in their ERP system. It is then exported to a flat file or other standard format. This is sent to the retailer’s EDI system to be translated to an EDI document. At this point the document is labeled as an 850. Next step in the 850 flow? The purchase order is sent to the retailer’s VAN via FTP.

The Trading Partner’s VAN

Once the 850 is received on the trading partner’s VAN, it queries the ISA envelope, identifies the sender and received IDs, checking if the IDs are associated to the mailboxes on it’s network. The retailer’s VAN confirms that the sender ID has a mailbox but the received does not and loads the 850 to the retailer’s mailbox. Van checks it’s interconnect table and finds the received ID is connected to the Supplier’s VAN. It interconnects the 850 via FTP.

The Supplier’s VAN

The supplier’s VAN queries the ISA envelope, identifies the sender and receiver ID, checking if these IDs are associated to mailboxes on it’s network. The supplier’s VAN identifies that the receiver ID has a mailbox on it’s network, but the sender does not. The supplier’s VAN sends the 850 to a mailbox owned by the supplier’s EDI Provider.

Supplier’s EDI Provider

The next party handling the purchase order within the 850 flow is the supplier’s EDI provider. Let’s take our system for example. The supplier logs into their web EDI account on EDI Werx, opens the purchase order and prints it. Depending on the trading partner’s requirements, the supplier may need to create return documents (Purchase Order Acknowledgements, ASNs, invoices, etc).

The Supplier

Lastly, EDI Werx will FTP to the supplier’s VAN and downloads the 850 from it’s VAN mailbox. The 850 is translated by EDI Werx’s translator and loaded to a web form. An email is then sent to the supplier notifying them that a new purchase order was loaded to their web EDI/EDI Werx account.

This is the complete step-by-step process of the 850 flow. Click here for more blog posts about the 850 code.

 

 

Things To Consider When Choosing an EDI Solution

 

Getting Started

Great news! A major retailer (trading partner) has agreed to establish a business relationship with your company. A vendor number has been assigned and you have been given access to their vendor portal. You downloaded their routing guide and EDI specs, you’ve read through the requirements and see terms like “850”, “856”, “810”, “VAN”, “AS2”, “GS1 labels”, etc. Online searches give you a better perspective. However, you are still unsure on how this all fits into your current company’s business processes. While this article will not attempt to explain all aspects of the requirements, it will attempt to guide you in making a decision on which EDI approach to take. Web EDI or integrated EDI (software or hosted).

Asking The Right Questions

In making a decision, consider the following:
1)      Does your company currently have an ERP?
2)      Is your company planning on purchasing an EDI package and are willing to pay someone to administer and support it?
3)      Is your company planning on purchasing a VAN mailbox account and, possibly, an AS2 package?
4)      Is your company planning on purchasing hosted EDI services from a 3rd party EDI provider, instead of using a “desktop” EDI package?
5)      Will current and/or future transaction volumes be high enough to justify the cost of implementing and administering an EDI package?

Your Options

If you’ve have answered “yes” to several of the points above, you are faced with two possible options: a desktop EDI package or hosted EDI services, through a 3rd party EDI provider. Using a 3rd party to handle all EDI processing can be more cost effective compared to a software. A 3rd party EDI provider can offer various services, including EDI integration services, VAN and/or AS2 services, technical support, etc. Hosted EDI integration uses per-defined maps (built using the partner and supplier requirements) and a translator to convert between EDI and various file formats.

If you have answered “no” to any of the points above, web EDI is a viable option. Web EDI is a web-based interface, accessible using a browser, which allows users to receive documents (eg. purchase orders) in a readable format. You can also create return documents (invoices and advanced shipment notices) without being exposed to the EDI. Web EDI offers less flexibility than using a desktop EDI program or hosted EDI translation. However, it is the most cost-effective EDI solution, offers a quick turnaround and is suitable for smaller companies. Web EDI can be accessed from anywhere, using internet access and a browser, making it very convenient.

Using a 3rd part EDI provider, for hosted EDI or Web EDI, eliminates the need to purchase expensive EDI and communication packages. EDI Werx’s team will work with partners to plan and implement your EDI partnership. Our team will build the appropriate EDI/Web EDI adapter, establish a connection with your partner and perform all full-cycle testing. Let our team handle the EDI processes, you can focus on your core business. Get in Touch!

The Purpose and Benefits of EDI: Lowering Costs and Increasing Accuracy

EDI (Electronic Data Interchange) is the exchange of business documents between trading partners via standard electronic formats. It has been around for over a few decades and its concept originally inspired by military logistics. The benefits of EDI are helping business relationships globally. How? Let’s start with it’s purpose.

The purpose of EDI is to lower costs and reduce human error in the logistical and administrative process. For this reason, many industries like Electronic, Retail, Automotive and Financial Services have transitioned to EDI services. With an EDI solution, trading partners can process documents like invoices, purchase orders and advanced shipment notices. An EDI service standardizes documentation by electronically interpreting its contents and allowing all members of the supply chain to have a seamless experience.

The benefits of EDI are still proving themselves to date. Speed, accuracy and savings have been the talk of the industries. It’s said that there have been 30-40% decrease in transaction errors by avoiding faulty handwriting or print issues. Similarly, buyers are experiencing millions in savings. The supply chain process has strengthened greatly and EDI solutions have contributed to long term business development and relationships.

EDI can be purchased as a software for your business or can be used as a web-based cloud service. Traditionally, an EDI software comes with a greater price tag. EDI web-based services are more economical and operates similarly to any mainstream email.