It is an EDI payment or remittance advice message that informs a supplier how much compensation will be transferred for delivered goods or services, or that the transfer has already happened.
What Is an ANSI X12 EDI 820 Payment Order?
An ANSI X12 EDI 820 Payment Order is an EDI payment or remittance advice message that tells a supplier how much will be paid for delivered goods or services, or that the transfer has already happened. It is often used when a customer pays several invoices with one money transfer and the supplier needs to match that payment to the settled invoices. SEEBURGER supports EDI 820 integration through the SEEBURGER BIS Platform, EDI Cloud Service, and software deployment models for in-house or cloud environments.
Key takeaways
- EDI 820 is typically sent by the customer after one or more EDI 810 invoice messages.
- The message helps suppliers connect one payment transfer to the invoices, discounts, surcharges, and amounts it settles.
- EDI 820 is an optional transaction and is especially useful when larger customers and suppliers bundle several invoices into one payment.
What is an ANSI X12 EDI 820 message?
An ANSI X12 EDI 820 message is a Payment Order used in an electronic data interchange workflow. It can act as a remittance advice by informing the supplier about the compensation that will be transferred, or by confirming that a transfer has already happened. Although EDI 820 is sometimes associated with electronic funds transfer processes, it is not the same as EFT. EFT refers to electronic transfer of consumer funds under the Electronic Funds Transfer Act in the United States, while EDI 820 is an EDI message that can accompany or represent payment information in an EDI workflow.
When is EDI 820 used in an EDI workflow?
The supplier first sends one or more EDI invoice messages to the customer. In ANSI X12, this is usually done through an EDI 810 Invoice. The customer may then send an EDI 820 message when several invoices are paid in one transfer. The supplier uses the information in the EDI 820 to connect the payment with the invoices that were settled.
In a retail workflow, the role of an ANSI X12 EDI 820 message shows up towards the end of the exchange sequence.
In an automotive workflow, the role of an ANSI X12 EDI 820 message shows up at the end of the exchange sequence.
The use of EDI 820 is optional and is less common than some compulsory EDI document types. Larger customers and suppliers often have more use for EDI 820 because they are more likely to handle payment runs that settle multiple invoices at once.
How is an ANSI X12 EDI 820 processed?
After a customer receives an EDI 810 Invoice, the EDI system checks the message payload against available data. If the message is syntactically correct, the ERP system can add the new information. A functional acknowledgement, such as EDI 997, may be sent back to confirm that the invoice message was technically received and accepted. If multiple invoices are bundled into one transfer, the customer can then provide an EDI 820 Payment Order to the supplier.
What issues can prevent EDI 820 acceptance?
Wrong or missing master data can create issues and may prevent the EDI 820 from being accepted.
- Discounts are applied without prior agreement.
- Invoice numbers do not match in the supplier's ERP system.
What information does an EDI 820 contain?
EDI 820 Payment Orders contain payment-relevant information for the business process and financial transaction. They follow the segment and element structure defined by the ANSI X12 standard. In a typical setup, the customer's ERP system creates the required invoice package information, such as an SAP IDoc, which is then translated into the EDI 820 format by an EDI solution.
- Customer and supplier information.
- Previous invoice details, including invoice numbers and amounts.
- Reduction reasons for discounts and surcharges.
- Partial transfers, open amounts, or amounts still due.
The conversion can be handled through an EDI Cloud Service or through EDI software used in-house.
ISA*00* *00* *ZZ*SENDER *12*RECEIVER *231014*1243*U*00401*000000001*0*P*>~
GS*RA*APP SENDER*APP RECEIVER*20231014*1243*0001*X*004010~
ST*820*0001~
BPR*I*4831.41*C*ACH*CTX~
TRN*1*9368617~
DTM*097*20231014~
N1*PR*SEEBURGER AG*ZZ*4019315000007~
N1*PE*SEEBURGER INC*ZZ*123456789~
ENT*1~
RMR*IV*0221316854**530.97*530.97~
NTE*ADD*INVOICE1/ABC1/~
DTM*003*20231014~
RMR*IV*X2493230**402.25*402.25~
NTE*ADD*INVOICE2/ABC1/~
DTM*003*20231014~
RMR*IV*Z7202123**4220.62*4220.62~
NTE*ADD*INVOICE3/ABC1/~
DTM*003*20231014~
RMR*IV*Y48502564**-322.43*-322.43~
NTE*ADD*INVOICE4~
DTM*003*20231014~
SE*20*0001~
GE*1*0001~
IEA*1*000000001~
What benefits can EDI 820 provide?
EDI 820 helps suppliers and customers improve financial prediction and cash flow management because the ERP system receives settlement information before it reaches the accounts. It can also support batch-driven payment runs with many deliveries, paperless invoice handling, faster accounting processes, and fewer errors.
Benefits for suppliers
More stable cash flow
Earlier and more automated detection of payment errors
Better payment reception planning and financial control
Potentially better supplier ratings
Benefits for customers
Collect multiple invoices and settle them with one payment
Reduce cost through optimized and automated settlement
Accelerate accounting with transmitted payment details
Which formats are comparable to ANSI X12 EDI 820?
| EDI standard | Region or context | Comparable format | Purpose |
| ANSI X12 | North America | 820 Payment Order | Payment order or remittance advice |
| TRADACOMS | UK retail | SRMHDR | Comparable remittance format |
| UN/EDIFACT | Europe and Asia | REMADV | Comparable remittance advice |
Frequently asked questions about ANSI X12 EDI 820
What is an ANSI X12 EDI 820 Payment Order?
Is EDI 820 the same as EFT?
No. EFT refers to electronic funds transfer under the Electronic Funds Transfer Act in the United States. EDI 820 is an EDI message that carries payment or remittance information and may be associated with an electronic funds transfer process.
When is EDI 820 usually sent?
EDI 820 is usually sent after the supplier has sent one or more EDI 810 Invoice messages and the customer is paying several invoices with one transfer.
Why is EDI 820 useful for suppliers?
It helps suppliers match a payment to the invoices it settles, detect payment errors earlier, and plan cash flow with more timely settlement information.
What can cause EDI 820 errors?
Wrong or missing master data can cause issues, including discounts applied without prior agreement or invoice numbers that do not match in the supplier's ERP system.
What does a typical EDI 820 include?
A typical EDI 820 includes customer and supplier information, previous invoice numbers and amounts, reduction reasons for discounts and surcharges, and information about partial transfers or amounts still due.
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