When a trading partner receives an EDI interchange, its translator checks the structure of each functional group and transaction set: required segments, valid codes, correct counts and envelopes. It then sends back a 997 reporting the result. The 997 can show a group as accepted, accepted with errors, partially accepted or rejected, and can point to the segments and elements that failed.
A 997 is a technical acknowledgment, not a business one. It says the file was readable, not that the order will be filled. Confirming items, quantities, prices and dates is the job of the PO acknowledgment (EDI 855). The related 999 implementation acknowledgment also reports compliance with the implementation guide and is used mainly in healthcare.
Missing 997s are an early warning. If a trading partner hasn’t acknowledged a document within the expected window, it may never have arrived, and the order, ship notice or invoice behind it may be stuck. Many retailers also require suppliers to return 997s on time and treat late or missing ones as a vendor compliance issue.