Electronic 850 Purchase Order

Electronic 850 Purchase Order (ASC X12 standard)

Within the retail industry, two distinct methods for ordering goods have been identified. The first type, or “basic”, is the most common, and is used to order goods separately for each location, i.e., one store ordering per PO. The second type, or “spreadsheet”, is utilized to order the same item for multiple locations, i.e., a specific quantity of one item is distributed to multiple locations.

The actual quantity distributed to each location need not be the same. The spreadsheet order usually implies predistribution by the vendor. Orders are packaged for the store and either sent directly to the store or to a central location (distribution center). The basic order can be used in the pre or post distribution environment. In the post distribution environment the buying location is the distribution center. The distribution center allocates each store’s quantity.

The purchase order in its most simplistic form, assumes that the receiver has, most of the general data about the sender and their locations (stores) within their systems. This data includes bill to, ship to, mark for, terms, etc., for each sender location. For each ordering location, the receiver of the order knows where to send the goods, where to send the bill, and what terms are to be applied. The sender only needs to inform the receiver of the location ordering the goods, when delivery is expected, and the detail specification for the goods (SKUs), including order quantity for each SKU.

The EDI 850 transaction set can be used to provide for customary and established business and industry practice relative to the placement of purchase orders for goods and services. This transaction set should not be used to convey purchase order changes or purchase order acknowledgment information.

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