This post aims to explain the process of acknowledging a purchase order from a buyer.
Two Kinds of Acknowledgments
There are two kinds of acknowledgments for EDI orders: There is a 997 functional acknowledgment and there is an 855 purchase order acknowledgment.
997 Functional Acknowledgment
The 997 functional acknowledgment is required for all orders and lets the sender of the order know that the receiver did in fact receive the order. A control number in the functional acknowledgment matches it to the order. However, no other information is conveyed. The fancy expression for this process is “nonrepudiation of receipt.” All of CovalentWorks solutions automatically send 997 functional acknowledgments and no effort is required of the user.
855 Purchase Order Acknowledgment
An 855 purchase order acknowledgment is sent by the receiver of the order back to the buyer to tell them whether the order will be filled. Each line item on the order can be acknowledged with a response that says whether all of the quantity, part of the quantity or none of the quantity will be shipped.
Interestingly, many trading partners do not require an 855 purchase order acknowledgment. The reason is that many trading partners have a “fill or kill” arrangement with the supplier in which the supplier either fills all of the order by the expected ship date or the order is “killed”, i.e. cancelled. A “fill or kill” arrangement usually makes the 855 purchase order acknowledgment unnecessary.
CovalentWorks fully supports automatic 997 functional acknowledgments and easy-to-use 855 purchase order acknowledgments for any trading partner that requires them.Purchase Order Acknowledgments and You by Steve Brewer