How EDI Works: From Purchase Order to Invoice

Electronic Data Interchange (EDI) enables businesses to automate the exchange of supply chain documents like Purchase Orders (POs), Advance Ship Notices (ASNs), and Invoices. But how does it actually work from start to finish?

This post breaks down the entire EDI workflow—from sending a PO to receiving an invoice—so you can understand how automation replaces manual tasks and cuts costs.

How EDI Works: From Purchase Order to Invoice
How EDI Works: From Purchase Order to Invoice

1. The Purchase Order (850)

The buyer (retailer or distributor) initiates the process by sending an EDI 850 Purchase Order to the supplier. This document includes product quantities, SKUs, pricing, shipping address, and delivery requirements.

Without EDI: This would be emailed or faxed, with manual rekeying into the supplier’s system.

With EDI: The PO automatically flows into the supplier’s ERP, WMS, or ActionEDI dashboard—no human input required.

2. Order Acknowledgement (855)

The supplier responds with an EDI 855 Order Acknowledgement, confirming product availability, expected shipping dates, and any changes.

This ensures both parties are aligned on expectations, avoiding miscommunication and stock issues.

3. Advanced Shipping Notice (856)

Before shipping, the supplier sends an EDI 856 ASN containing carton-level details, tracking numbers, and UCC-128/GS1-128 shipping labels.

This helps the buyer prepare for receiving—especially important in warehouse environments like CDW, Target+, or Amazon.

4. The Invoice (810)

After shipment, the supplier sends an EDI 810 Invoice electronically. It includes itemized charges, PO reference, and shipping confirmation.

Buyers automatically match the invoice to the original PO and ASN for 3-way matching, streamlining approval and payment.

5. Payment & Reconciliation

Once matched and approved, payment is processed—either through standard AP workflows or via an EDI 820 Remittance Advice.

ActionEDI’s dashboard shows real-time reconciliation status, so you know exactly what was paid, pending, or rejected.

Why Automate This Workflow with ActionEDI?

  • ✅ Save 50%+ in labor costs by eliminating manual order processing
  • 🚚 Accelerate fulfillment with real-time shipping label and ASN generation
  • 📦 Comply with GS1/UCC-128 standards for Amazon, CDW, and Target+
  • 💬 Get 24/7 human support (no chatbots)
  • 💸 Transparent pricing with no hidden fees

Whether you’re a CDW vendor or an e-commerce seller, ActionEDI turns this PO-to-invoice workflow into a plug-and-play system.

Want to See It in Action?

Book a demo to watch how ActionEDI handles the full EDI cycle in real-time—no technical expertise required.