The 850 is the starting point of most EDI order flows. It replaces a faxed, emailed or phoned-in order with structured data that both sides’ systems can read. The header (the BEG segment) carries the PO number, order date and order type, followed by terms, ship-to and bill-to parties, and requested ship or delivery dates. Each line (the PO1 segment) identifies the item by buyer or supplier part number or GTIN/UPC, with quantity, unit of measure and price.
In the order flow, the supplier usually answers with a functional acknowledgment to confirm receipt, then a PO acknowledgment to accept, reject or adjust lines. If the buyer later changes the order, it sends a PO change. The supplier then ships with an advance ship notice and bills with an invoice, both referencing the original PO number.
Many downstream problems start here. A wrong item number, an outdated price, a missing ship-to code or a unit of measure that doesn’t match the supplier’s catalog flows into every document that follows. Errors discovered later turn into short shipments, invoice mismatches, receiving delays or chargebacks, and they are far harder to fix after goods have moved than when the order is first received.