Order to Cash / Procure to Pay

The Order to Cash (O2C) process using Electronic Data Interchange (EDI) involves several steps to facilitate the flow of orders, fulfillments, and payments between trading partners (typically buyers and sellers).

Process Overview

Purchase Order (850)

• Buyer to Seller: The process begins when the buyer sends a Purchase Order (PO) to the seller to request goods or services.
Purchase Order Acknowledgment (855)

• Seller to Buyer: The seller acknowledges receipt of the PO and confirms whether it can be fulfilled, providing details as necessary.
Advance Ship Notice (856)

• Seller to Buyer: Before shipment, the seller sends an Advance Ship Notice to the buyer. This document includes detailed information about the contents and shipping details of the upcoming shipment.
Shipment and Delivery

• Physical Delivery: The goods are shipped and delivered to the buyer as per the details provided in the Advance Ship Notice.
Invoice (810)

• Seller to Buyer: After the shipment, the seller sends an Invoice to the buyer. The invoice details the goods or services provided and the amount due.
Payment (820)

• Buyer to Seller: The buyer processes the invoice and sends payment to the seller. This may be accompanied by a Payment Order/Remittance Advice indicating the details of the payment.
Credit/Debit Adjustments (812) (Optional)

• Buyer or Seller: If there are any discrepancies or adjustments needed, a Credit/Debit Adjustment is sent to address issues like overpayments, underpayments, or returns.
Order Status Reports (870) (Optional)

• Seller to Buyer: Throughout the process, the seller may send Order Status Reports to provide updates on the status of orders, including processing, shipping, and completion statuses.

Key Documents in the O2C EDI Process

• 850: Purchase Order
• 855: Purchase Order Acknowledgment
• 856: Advance Ship Notice
• 810: Invoice
• 820: Payment Order/Remittance Advice
• 812: Credit/Debit Adjustment
• 870: Order Status Report

Each step in this process ensures seamless communication and transaction flow between the buyer and seller, reducing errors, improving efficiency, and speeding up the order fulfillment and payment cycles.