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What is the EDI 820?

And why should you care?

Man working on laptop

When you are trading with a major retailer, you will probably receive the EDI 820, also known as the Payment Order/Remittance Advice. More colloquially, it is known simply as The Remittance Advice.

The Remittance Advice — sounds like it could be the title of a great movie. A thriller of some sort, with an unexpected plot twist that leaves audiences amazed.

As exciting as that might sound, let’s get our heads out of Hollywood for a moment. The reality is that you don’t want to find any surprises from your trading partners in any EDI 820 they send. And definitely no thrills. The more ho-hum, the better.

What does the EDI 820 contain?

Your trading partners will send an EDI 820 to share payment and order remittance information, typically after they have received your invoice. It shares information on orders received, payments made or to be made, and displays errors. Nothing exciting about errors, of course, especially when they cost you money.

Here’s a quick summary of what the EDI 820 will include:

Invoice Numbers

Bank and Account Information

Adjustments to Invoices

Billed versus Paid Amounts

Payer/Payee Identification

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How is the EDI 820 used?

The EDI 820 serves four functions.

  1. It delivers the details about upcoming payments or payments made.
  2. It can be a direct deposit tool — trading partners can use it to authorize financial institutions to transfer funds electronically.
  3. It can do Function #1 and Function #2 concurrently, delivering the information and authorizing the payment.
  4. It helps with reconciliation. The details it provides can be used to keep your accounting accurate.

One thing that can make the EDI 820 a bit more complicated than most EDI documents is that it’s not always simple communication from a trading partner to a supplier. With the EDI 820, if appropriate and an approved part of the payment process, banks and banking information may be included.

Our Lingo software automates the reconciliation process and matches payments with invoices. You’ll save significant amounts of time, catch mistakes, and may even enjoy the benefits faster payment.

Want to learn more? Feel free to reach out to us. We’ll offer insight — not a sales pitch.

Use the EDI 820 to evaluate how well you’re managing transactions.

The EDI 820 gives you a clear understanding of how well you’re handling your EDI orders. Are numbers consistently matching up? If not, you’ll see what that’s costing you and you can start to tackle the problem. Can more tasks be automated? If the errors can be traced to manual entry, examine ways you can eliminate it.

Analyze the EDI 820 your trading partners send and you may find valuable ways to improve your work flow.

Questions about other EDI documents? Don’t worry — we have answers.