EDI 820 Payment Order/Remittance Advice
An EDI 820, also known as a Payment or Order Remittance Advice is a type of EDI document used in the exchange of transactional information between trading partners.
What is an EDI 820?
The EDI 820 transaction is an electronic Payment Order/ Remittance Advice (also known as ANSI X12 EDI 820). An EDI 820 transation set communicates remittance information and/or to initiates a payment between buyers (payers) and suppliers (payees). The EDI 820 is typically used to inform the supplier of invoice payment or invoices. The EDI 820 is commonly accompanied with an electronic funds transfer and can be incorporated into an ACH banking transaction.
What are the Key Elements of EDI 820?
The EDI 820, or Payment Order/Remittance Advice, typically includes the following essential components.
- Payment method
- Credit/debit confirmation
- Buyer (payer) and supplier (payee) information such as company name and address details
- Account number and routing information
- Payment/remittance date
- Reference number
- Check or payment number
- Payment amount
How is EDI 820 Payment Order/Remittance Advice used?
The EDI 820 document is sent from the buyer to the seller and acts as a statement about the intention to pay. Once obtained by the department received once, through the EDI integration with the ERP system, the EDI 820 becomes matched with its respective EDI 810 Invoice or any other Invoice format. From there, EDI Solutions, ERP or accounting workers can use information to determine the open account.
Usually, the EDI 820 documents confirm the payment details of the seller, with a payment. However, they can also be used to inform the seller of significant adjustments for invoices, which may affect the total payment amount, or provide payment instructions to the bank. In addition, an EDI 820 may include information about the previous payment made to the same Challan, which provides complete visibility in the payment event.
Benefits of EDI 820
Using the EDI 820 Payment Order provides numerous benefits for businesses:
- Improves data accuracy of information exchanged between trading partners and strengthen communication reducing unexpected charges, costs or deductions
- Eliminates payment discrepancies, manual processing errors and delays
- Automates payment reconciliation
- Improves efficiency, automates fulfillment and provides real-time visibility
EDI 820 Format
Each EDI Payment Order/Remittance Advice document will have data organized into segments and data elements. Each segment contains at least one data element. Each data element is a data field. The standards bodies have allowed for every conceivable possibility for data on the EDI Payment Order/Remittance Advice document. Any one company will use a small subset of the available choices within the ANS X.12 or UN/EDIFACT standards.
Here is a simplified example of an EDI 820 document, illustrating its key components and structure. This example assumes the use of a basic EDI format for clarity.
Example EDI 820 Document
ST*820*000000001~
BPR*I*5000.00*C*CHK*123456789*20170801~
REF*AC*987654321~
N1*PR*Payment Provider Name*9*123456789~
N3*789 Payment St~
N4*Payment City*CA*67890~
N1*PE*Supplier Name*9*987654321~
N3*456 Supplier Ave~
N4*Supplier City*NY*12345~
RMR*INV*12345*1000.00~
RMR*INV*12346*1500.00~
DTM*003*20170801~
SE*10*000000001~
Explanation of the Example
ST (Transaction Set Header): 820 is the transaction set identifier, and 000000001 is the control number.
BPR (Beginning Segment for Payment Order/Remittance Advice): Indicates the payment amount (5000.00), payment method (C for check), and provides details about the payer's bank account (123456789) and the payment date (20170801).
REF (Reference Identification): Contains additional reference information, such as the payer's account number (987654321).
N1 (Name): Identifies the parties involved. PR represents the payment provider, and PE represents the supplier. Each has associated identification numbers and addresses.
N3 (Address Information) and N4 (Geographic Location): Provide detailed address information for the payment provider and supplier.
RMR (Remittance Advice Accounts Receivable Open Item Reference): Details the invoices being paid, including invoice numbers (12345 and 12346) and the amounts (1000.00 and 1500.00).
DTM (Date/Time Reference): Specifies the payment date (20170801).
SE (Transaction Set Trailer): Marks the end of the transaction set, with a control number matching the ST segment.
This example demonstrates the structure and content of an EDI 820 document, including payment details, remittance information, and party identification. Actual implementations may vary depending on specific business requirements and EDI standards.
Other Common X12 EDI Transactions
EDI 855 Purchase Order Acknowledgment
EDI 856 Advance Shipment Notice
EDI 997 Functional Acknowledgment
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