855 Purchase Order Acknowledgment: Everything You Need to Know

In the complex world of business transactions, the 855 Purchase Order Acknowledgment plays a crucial role that many retailers and suppliers overlook. This electronic document confirms receipt of a purchase order and provides vital information about what will actually be shipped. Let's break down everything you need to know about the 855 document and why it matters for your business operations.

What is an 855 Purchase Order Acknowledgment?

The 855 Purchase Order Acknowledgment (POA) is an electronic document that serves as a formal response to a purchase order (PO). When you send a purchase order to a supplier, the 855 is what comes back to confirm they've received it and to communicate how they plan to fulfill it.

Think of it as the digital equivalent of a supplier saying, "Got your order. Here's what we can actually provide and when." It's a critical communication tool in the supply chain that helps prevent misunderstandings and sets clear expectations between trading partners.

Why the 855 POA Matters

The 855 document isn't just another piece of paperwork in your workflow—it serves several important functions:

1. Confirmation and Clarity: It lets you know your order was received and understood by the supplier.
2. Inventory Visibility: It provides real-time information about what items are available and what might be on backorder.
3. Shipping Timeline: It gives you concrete information about when to expect delivery.
4. Price Verification: It confirms the prices charged match what was expected.
5. Change Documentation: It records any modifications to the original purchase order.

For retailers with multiple fulfillment sources or businesses managing complex supply chains, the 855 document helps maintain accurate inventory expectations and keeps your customers informed about product availability.

Key Components of an 855 Document

A standard 855 Purchase Order Acknowledgment contains several critical pieces of information:

• Header Information: Including the PO number, dates, and trading partner details
• Line Item Details: Each product ordered with corresponding quantities
• Acknowledgment Status Codes: Indicators of whether items are accepted, rejected, or backordered
• Pricing Information: Confirmation of costs for each line item
• Shipping Details: Expected ship dates and delivery information
• Notes or Special Instructions: Any additional information from the supplier

The status codes are particularly important as they tell you exactly what's happening with each item in your order:

• IA (Item Accepted): The supplier can fulfill the item as requested
• IR (Item Rejected): The supplier cannot provide the item
• IQ (Item Quantity Changed): The supplier can only provide a portion of the requested quantity
• IP (Item Price Changed): The supplier must charge a different price than requested
• BP (Backordered, Partial): Part of the order is backordered
• BT (Backordered, Total): The entire item is backordered

The 855 Process Flow

Understanding how the 855 fits into the order lifecycle helps you optimize your inventory management:

1. Purchase Order Creation: You create and send an 850 PO document to your supplier.
2. Purchase Order Receipt: The supplier's system receives your order.
3. Order Evaluation: The supplier reviews inventory availability, pricing, and delivery capabilities.
4. 855 Generation: The supplier creates the 855 POA detailing what they can fulfill.
5. 855 Transmission: The document is sent back to you electronically.
6. 855 Processing: Your system receives and processes the information, updating inventory expectations.
7. Order Fulfillment: The supplier begins picking, packing, and shipping according to the acknowledged order.
8. Shipment Notification: A 856 Advanced Shipping Notice (ASN) is sent when the order ships.

This process typically happens within 24-48 hours of the original purchase order submission, allowing for quick adjustments if needed.

Benefits of Automated 855 Processing

Manually processing 855 documents is time-consuming and error-prone. Automating this process through an inventory and order management system like Flxpoint offers several advantages:

• Real-time Inventory Updates: Your available-to-sell quantities adjust automatically based on acknowledgment statuses.
• Customer Communication: Automatically notify customers about backorders or delays.
• Reduced Data Entry Errors: Eliminate manual input mistakes that can lead to inventory discrepancies.
• Better Cash Flow Management: Accurate knowledge of incoming inventory helps with financial planning.
• Improved Supplier Performance Tracking: Monitor how often suppliers can fully fulfill orders as requested.
• Streamlined Operations: Free up staff to focus on higher-value activities instead of document processing.

Common Challenges with 855 Documents

Despite their value, businesses often face challenges with 855 processing:

• Format Inconsistencies: Suppliers may use different formats or include varying levels of detail.
• Integration Issues: Connecting 855 data with existing inventory systems can be technically challenging.
• Timing Delays: Late acknowledgments can disrupt inventory planning.
• Incomplete Information: Some suppliers provide minimal details in their acknowledgments.
• Manual Processing Bottlenecks: Without automation, processing high volumes of 855s creates operational backups.

These challenges are particularly acute for retailers with multiple fulfillment sources or those working with numerous suppliers.

How Flxpoint Can Overcome These Challenges

While the 855 Purchase Order Acknowledgment offers tremendous value, implementing effective processing systems can be challenging. This is where Flxpoint's specialized EDI solutions come into play:

Built-in EDI Specifications: Flxpoint provides comprehensive in-house EDI specification standards specifically designed for ecommerce businesses. These include detailed specifications for the 855 PO Acknowledgment, allowing your team to understand exactly what data to expect and how to interpret it.

Interactive Validation Tools: The platform includes interactive inspectors and validators that help you quickly identify and resolve formatting issues in 855 documents, ensuring data flows smoothly between systems.

Consistent Partner Integration: Rather than adapting to multiple supplier formats, Flxpoint allows your fulfillment partners to build directly to your Flxpoint account using standardized EDI formats. This creates consistency in your 855 processing regardless of which supplier sent the acknowledgment.

Automated Updates: When an 855 acknowledgment arrives, Flxpoint automatically updates your inventory levels, order statuses, and customer-facing information, eliminating the manual bottlenecks that typically slow down order processing.

Cross-Platform Communication: The system bridges communications between your fulfillment partners, sales channels, and inventory management system, ensuring that 855 data flows to every part of your business that needs it.

For businesses managing high order volumes, these capabilities translate into significant benefits: reduced manual errors, faster transaction processing, better supplier relationships, and ultimately, improved customer satisfaction. 

The Future of 855 Documents

As supply chains grow more complex and customer expectations for accuracy increase, the 855 document continues to evolve:

• Enhanced Data Elements: More detailed status information and reason codes
• Real-time Processing: Near-instantaneous acknowledgments through API connections
• Predictive Analytics: Using historical 855 data to forecast future fulfillment patterns
• Mobile Accessibility: Reviewing and approving 855 exceptions from anywhere
• Blockchain Integration: Immutable record-keeping for order acknowledgments

Conclusion

The 855 Purchase Order Acknowledgment might seem like just another EDI document, but it's actually a powerful tool for inventory management and customer satisfaction. By understanding and properly utilizing 855 data, you can prevent stockouts, manage customer expectations, and optimize your supply chain operations.

For businesses managing multiple fulfillment sources, like dropshipping retailers, B2B suppliers, or multi-source brands, implementing efficient 855 processing is not just a nice-to-have—it's a competitive necessity in today's fast-paced market.

With the right technology partner, like Flxpoint, you can transform 855 processing from a manual burden into an automated advantage that helps you deliver better customer experiences while maintaining operational efficiency.

FAQs

Is the 855 acknowledgment the same as an invoice?

No, an 855 acknowledgment is not the same as an invoice. The 855 document comes earlier in the transaction process and simply confirms receipt of a purchase order and indicates acceptance or proposed changes. An invoice (EDI 810) comes later, typically after goods have been shipped, and formally requests payment for the products delivered.

How quickly should suppliers send an 855 acknowledgment?

Most businesses aim to send 855 acknowledgments within 24 hours of receiving a purchase order. Quick responses give buyers more certainty in their planning and inventory management. Many trading partner agreements specifically define the expected timeframe for acknowledgments, often ranging from a few hours to one business day.

What happens if a supplier doesn't send an 855 acknowledgment?

Without an 855 acknowledgment, buyers have no confirmation that their order was received or will be fulfilled. This uncertainty can lead to duplicate orders, inventory planning problems, and strained business relationships. Many large retailers and distributors actually require 855 acknowledgments as part of their vendor compliance programs, and suppliers who fail to provide them may face penalties or chargebacks.

Can an 855 acknowledgment include partial acceptance of an order?

Yes, an 855 acknowledgment can include line-by-line responses to a purchase order. This means a supplier might accept some items as requested while making changes to others (like adjusted quantities or substitutions) and potentially rejecting certain lines entirely. This granular response helps buyers understand exactly what they can expect to receive.

Do small businesses need to use EDI 855 documents?

While small businesses aren't typically required to use EDI 855 documents for transactions with other small companies, they often need this capability when selling to larger retailers or distributors. Many major retailers require their suppliers to use EDI, including 855 acknowledgments, regardless of the supplier's size. Fortunately, there are affordable EDI solutions designed specifically for small businesses.

What information should be included in an effective 855 acknowledgment?

An effective 855 acknowledgment should include order identification information (PO number, dates, buyer/seller IDs), detailed item responses (acceptance status, quantities, prices), any changes to the original order, expected shipping dates, and any relevant notes explaining modifications. The more specific the information, the more useful the acknowledgment is to the buyer.

How does an 855 acknowledgment differ from an 856 Advance Shipping Notice?

While both documents are part of the EDI order fulfillment process, they serve different purposes. The 855 acknowledgment responds to a purchase order and confirms what will be supplied. The 856 Advance Shipping Notice comes later and provides detailed information about a shipment that's actually on its way, including packaging details, carrier information, and tracking numbers.

Can 855 acknowledgments be automated?

Yes, many businesses automate their 855 acknowledgment process. EDI systems can be configured to automatically generate and send acknowledgments for orders that can be fulfilled exactly as requested. Orders requiring modifications or rejections might be flagged for human review before the acknowledgment is sent. This automation saves time and reduces errors.

What's the difference between an 855 and an 856 document?

The 855 is a Purchase Order Acknowledgment that responds to a buyer's order and indicates acceptance, changes, or rejection. The 856 is an Advance Shipping Notice that provides detailed shipping information once goods are actually on their way to the buyer. They represent different stages in the order fulfillment process, with the 855 coming first.

How do I know if my 855 acknowledgments comply with industry standards?

EDI documents must follow specific formatting standards to be properly processed. Most EDI software will validate your documents against these standards before sending them. Additionally, many trading partners provide specifications for their expected 855 format and content. Regular testing with your trading partners and monitoring rejection rates will help ensure compliance.

Do all industries use 855 acknowledgments the same way?

No, different industries have unique requirements for 855 acknowledgments. Retail typically requires detailed delivery dates and locations. Manufacturing often focuses on lead times and material specifications. Healthcare needs lot numbers and expiration dates. Food distribution requires temperature requirements and shelf-life information. It's important to understand the specific expectations in your industry.

What should I do if I can't fulfill an order exactly as requested?

If you can't fulfill an order exactly as requested, use the 855 acknowledgment to propose specific alternatives. This might include substituting similar products, adjusting quantities based on availability, suggesting different delivery dates, or noting price changes. Being transparent and specific in your acknowledgment helps the buyer make informed decisions about how to proceed with the order.

Flxpoint – Powerful Dropship and Ecommerce Automation Platform