EDI 820 — Payment Order / Remittance Advice explained
In short: EDI 820 is the ANSI X12 Payment Order / Remittance Advice: a payer (typically a retailer or large corporate buyer) informs the payee that a payment has been made or is being initiated, with detailed breakdown of which invoices are being paid and any deductions.
Key capabilities
- Payment method flag: Cheque, ACH CTX, wire, book transfer — determines whether the 820 is standalone or paired with a bank ACH file.
- Invoice-level breakdown: Which invoices are being paid, in what amount, with what deductions (chargebacks, credits, allowances) — enables automated cash application.
- Deduction codes: Standard adjustment codes explaining why the paid amount differs from the invoiced amount — critical for dispute management.
- Cash-app automation: Automates 80-95% of manual cash-application work in AR — the highest-ROI EDI transaction for finance teams.
Cash-application automation with EDI 820
Without 820: AR clerks manually match daily bank deposits to open AR invoices, guess at deduction codes, chase disputes — 20-40% of AR headcount goes to cash-app work. With 820: the payer's remittance flows into your ERP AR module, invoices are auto-cleared, and only true exceptions surface — freeing AR headcount for collections and dispute resolution.
EDIconnect maps 820s into SAP FI-AR, Dynamics AR, NetSuite Bank Deposit, Oracle Receivables, and custom cash-app tools — with deduction-code translation for each payer's proprietary code set.
Frequently asked questions
What is an EDI 820?
EDI 820 (Payment Order / Remittance Advice) is the electronic remittance advice a payer sends to a payee with the detailed breakdown of an incoming payment — which invoices, how much, and what deductions apply.
Is EDI 820 the payment itself?
It depends on the mode. In 'CTX' mode, the 820 contains ACH payment instructions transmitted to the bank; in 'remittance-only' mode, the 820 accompanies a separate payment (wire, ACH) and just explains it.
Who uses EDI 820?
Large retailers (Walmart, Target, Amazon, Costco), corporate buyers, government agencies, and enterprises paying dozens or hundreds of suppliers weekly.
How does EDI 820 help cash application?
Instead of a human matching bank deposits to open invoices in the ERP, the 820 arrives with the exact invoice numbers and amounts — the ERP auto-applies cash and only exceptions need human review.
What is the difference between EDI 820 and EDI 810?
810 is an invoice from supplier to buyer ('you owe me'). 820 is a payment/remittance from buyer to supplier ('here's what I'm paying and why').