What does an 820 do? in non-EDI wording...

[gginnj]

We have a trading partner that wants to implement 820's with us. From what I'm seeing, 820 would be for the trading partner to receive payments from a bank or third party.

OK...but we never send this partner checks, they pay us.
Does the 820 also go the other way, to allow the trading partner to pay us?

So far, we use 850/855, and 810 with our partner, so it's
not too complicated a setup.

However the 820 guidelines are a much harder read to understand what is actually happening. Looking for plain old descriptions of what it's function in life is!

Thanks
GG

 

[Stella001]

Our trading partners pay us to and we do receive 820's all the time. The 820 is remittance advice on the invoice (810) you sent to them. The 820 will give you informtion like the invoice number they are paying on and how much they are paying on it and usually also the check number they are applying to the payment. The 820 may also include mulitple invoices they are paying on and it breaks it down for you. We created a flat file report from the 820's to make it more readable for our non EDI people.

 

[gginnj]

Do 820's prior to the partner making a payment? So if they had 90 day terms, would we receive the 820 near the end of the 90 days or just after sending the 810?

I realize there is no "answer" to the above question as all partners pay differently. I'm asking for a general answer.

Thanks

 

[Stella001]

For us we usually receive the 820's on or after the terms date. I'm assuming after payment but that is not my department I am only going by when the invoice was sent and when we receive the 820.

 

[KateatMKS]

The 820 Payment/Remittance Advice functions like a printed advice would if you were receiving a paper check from your customer.
Many trading partners will use some form of automatic funds transfer and want to send the advice via EDI.

The advice will refer to each invoice being paid, each credit being taken, each chargeback being deducted, with document numbers and dates. Of course, those are not necessarily your document numbers, but usually are your customer's.

The 820 will also refer to the check number of the payment, so it will come after the payment is done.

MKS Consulting Company

http://www.mksconsults.com

NJ USA

 

[eyetry]

If you are familiar with bank lock box, the 820 functions in a similar fashion. The $ are sent to the account at your back by check, wire, ACH or some other method. The 820 provides the detail.

The details about when the TP would send an 820 or specific entry in a given 820 is based, to a great deal, on your trading partner agreement.

I haven't visited the 820 for over 8 years but back then the rumor was that large banks with lock boxes were encoraging the use of 820s.