From EDI purchase order to paid invoice

Most of our wholesale volume never touches a keyboard. A retailer's system sends a purchase order, our plant ships against it, and an invoice goes back the same day. When that chain works, nobody thinks about it. When one document is late or malformed, a whole order ages into a collections problem. Here is the chain, in the order it happens.

The four documents

• 850 — purchase order. The retailer's order: items, quantities, unit costs, ship-to location, requested delivery window and the terms they expect. This is the document everything downstream is checked against.
• 856 — advance ship notice. Sent when the truck leaves: what is actually on it, packed how, on which pallets, with the carrier and tracking. Distribution centers use it to schedule the receiving door.
• 810 — invoice. Generated from what shipped, not from what was ordered. If a line went short, the invoice reflects the short, and the difference is either backordered or closed.
• 820 — remittance advice. The payment detail: which invoices are being paid, and what has been deducted from each.

Ordered, shipped, invoiced: three different numbers

The single most common reason a wholesale invoice sits unpaid is that it does not match what the receiving dock actually counted. A case damaged in transit, a substitution made at the plant, a partial pallet held back for a quality check — each one puts the 850, the 856 and the 810 out of alignment, and the retailer's payables system will hold the whole invoice rather than pay part of it.

The fix is upstream, not in collections: invoice from the shipment record, send the 856 before the truck arrives, and reconcile short-ships the day they happen instead of the month they are disputed.

Deductions are not disputes

Chargebacks and allowances arrive as line items on the remittance, not as a phone call: a late-delivery fee, a compliance charge for a mislabeled pallet, a promotional allowance, a freight adjustment. Each one needs to be matched to its invoice and either accepted and booked, or documented and disputed inside the retailer's window — usually short. Deductions that are never worked simply become a permanent discount.

What our back office does with it

Invoices are issued the day the shipment closes, matched against the purchase order and the ship notice before they go out, and tracked to payment with the remittance detail applied line by line. Open balances are reported weekly by customer and by age, with deductions separated from genuinely unpaid invoices, so the two get worked differently.

More on how billing works on the payments and invoices page.

Published 2026-09-11 by RBS Sweets, an operating group of Radd Payment Solutions. More insights