What is an EDI 850?


When you joined the engineering sector, you aimed to be part of a team that developed next-gen, mind-blowing, world-changing technologies. 

What did not probably occur to you is that as a Director of a hardware-centric firm, you’ll also be involved in other repetitive procurement tasks. After all, an efficiently flowing supply chain is the only way you’ll meet your customers' quality expectations on time. 

Fortunately, various technologies have been developed to automate the procurement process, allowing you to focus all your time and energy on important projects. 

A great example is Electronic Data Interchange (EDI), which allows you to connect and exchange information with your suppliers. This way, you’ll get more done by speeding up the logistics timeline and eliminating manual errors. 

One way an EDI will automate your supply chain is by enabling you to easily send electronic purchase orders to your suppliers. This is in the form of EDI 850, which is what we will discuss in this guide. 

What is EDI 850?

EDI 850 is the standard format for an electronic purchase order when using EDI for electronic data exchange. It follows the X12 format provided by the American National Standards Institute (ANSI). 

It is essentially a digital document that contains all the information required to successfully place an order, usually sent to a vendor as the first step of the ordering process. You can use an EDI 850 for single and recurring purchases, or to amend or delete another order as per your requirements. 

Essential Components of EDI 850

EDI 850 contains the same information you would find in a paper purchase order document. Its essential components include:

  • Purchase Order Number
  • Order date
  • Details of the vendor, including the name, address, and other contact info.
  • Requested date of shipping and/or delivery
  • Item identifiers, such as product UPCs or SKUs
  • Buyer information, including name and delivery address
  • Buyer’s billing information
  • Charges and allowances
  • Proposed terms of payment
  • Quantity and measurement unit of items ordered
  • The price per unit and total order price
  • Terms of shipping, including the preferred carrier, shipping method, and desired delivery date

Elements and Segments of EDI 850

The information contained in an EDI 850 is organized into elements and segments as specified in the transaction set for the sake of EDI compliance. Adhering to these rules is crucial since they will be interpreted by a computer, which can only understand instructions set in a specific way.

Here is the list of EDI-compliant segments and elements you will use:


  • ISA is the interchange control header. It marks the beginning of one or more functional groups and control segments.
  • ISA01 – Authorization Information Qualifier. Code 00 indicates that no authorization information is present in I02.
  • ISA02 – Authorization Information
  • ISA03 – Security Information Qualifier. Code 00 indicates that no security information is present in I01.
  • ISA04 – Security Information
  • ISA05 – Interchange ID Qualifier
  • ISA06 – Interchange Sender ID.
  • ISA07 – Interchange ID Qualifier
  • ISA08 – Interchange Receiver ID
  • ISA09 – Interchange Date
  • ISA10 – Interchange Time
  • ISA11 – Interchange Control Standards Identifier. ‘U’ indicates that the U.S. EDI Community of ASC X12, TDCC, and UCS is responsible for the control standard used by the message.
  • ISA12 – Interchange Control Version Number. Code ‘0400’ specifies the standard issued as ANSI X12.5-1997.
  • ISA13 – Interchange Control Number
  • ISA14 – Acknowledgement Requested. Code ‘0’ indicates that no acknowledgment has been requested.
  • ISA15 – Usage Indicator. Code ‘P’ indicates that the interchange envelope contains production data.
  • ISA16 – Component Element Separator


GS shows where a functional group starts, along with providing control information. GS is the functional group header.

  • GS01 – Functional Code Identifier. The code ‘PO’ indicates the purchase order.
  • GS02 – Application Sender’s Code
  • GS03 – Application Receiver’s Code
  • GS04 – Date
  • GS05 – Time
  • GS06 – Group Control Number
  • GS07 – Responsible Agency Code is X which represents Accredited Standards Committee X12
  • GS08 – Version/Release/Industry Identifier Code. The code 004010 indicates approval for publication by ASC X12 Procedures Review Board through October 1997.


ST is the transaction set header, which means it is used to mark the beginning of transaction sets. It is also used to set control numbers. For example, in ST*850*99991, 99991 is the control number, and 850 is the purchase order transaction set.


BEG initiates the purchase order transaction. It indicates the beginning of the transaction set and has identifying dates and numbers. 00 marks a new purchase order, and SA denotes a stand-alone order. The purchase order number and the date of issue will also be included.

N Series

Some several segments and elements begin with N; they are:

N1:represents names, entity identifier codes, identification codes, and identification code qualifiers.

N3: represents the organization’s address information.

N4:represents the geographic location; details such as city and state.

N9: represents reference identification


This is the date and time qualifier. It is used to specify any relevant date and time on the purchase order such as the transaction creation date and time.


This is the administrative contact for the purchase order.


This segment represents the purchase order item data. The information here includes quantity ordered, price, unit of measure, and line number.


As the acronym suggests, PID is a segment that holds the description or identity of a product. The product ID.


REF is the reference identification segment that is used to specify identifying information.


SDQ refers to destination quantity. Therefore, it specifies the details of the purchase order’s destination and quantity.


SE is the transaction set trailer. It describes the number of segments and set the control number of the purchase order.


Shows the end of functional groups while providing control information.


CTT shows the number of units ordered and line items.


The IEA stands for the interchange control trailer, which lists the number of functional groups taking part in the exchange as well as the control numbers that the sender assigned.

How Does an EDI Transmission Work?

The buyer's computer system transmits the EDI 850 straight to their trade partner through FTP or VAN via the internet. 

The VAN acts as an intermediary between the partners. To begin the transmission, the buyer's and supplier's VANs have to link. The VAN ensures that the EDI 850 is both transmitted and received between the two parties. 

A variety of security measures, including passwords, encryption, and user IDs, keep the document safe throughout the transmission process. The legitimacy of the EDI 850 is guaranteed by several verification methods and editing throughout the process for security concerns.

How to Go about Exchanging an EDI 850 Purchase Order Workflow

If a purchase needs to make a change to an order, they will have to send an EDI 860, which is a Purchase Order Change Request-Buyer Initiated. Once the supplier receives it, they will send an EDI 865, which is a Purchase Order Acknowledgement with Change. The supplier may also use the Purchase Order Acknowledgement to request changes to the original purchase order if necessary.


EDI 850 is only one of the several components in EDI that facilitate the easy transfer of electronic data between buyers and suppliers. There is a lot more to be gained from the platform. Detailed, secure, and precise, EDI will be here to make business operations easier for a long time.

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