Understanding the Basics in Purchase Order Acknowledgements

ProductThe Purchase Order Response (ORDRSP) is an EDI document and is the electronic variety of a Purchase Order Acknowledgment (POA). This is in the EDIFACT standard instead of the ANSI X12 EDI system, which is normally used in North America. Consumer product companies issue ORDRSP to let customers know that they will file their purchase orders (PO) as requested.

Otherwise, they will inform them using cloud-based purchase order management software if there are any changes on the PO. SourceDay explains that this helps notify the buyer if the supplier cannot accomplish the PO, such as disagreeing with the terms listed on the order or if items are out of stock.

What information is listed on the Purchase Order Acknowledgment document?

A Purchase Order Acknowledgment EDI file is arranged into data and segment elements. A segment can include one data element, while each of these elements has a data field.

Moreover, data elements contain examples similar to a PDF or a paper POA. These include the reject or acknowledgement indication, vendor address information, vendor number, and purchase order number. This offers endless fields that are open for configuration, but it will depend on the requirements of the retailer.

How can you use the Purchase Order Acknowledgment?

After getting the Purchase Order from a retailer, the supplier will respond with the POA.

By informing the retail customer of the amount of PO you are filing, they’ll know the quantity they are open-to-buy. In short, they’ll have an idea how much funds they need to purchase new merchandise. As soon as the buyer receives the POA, you will receive an automated Functional Acknowledgment document mentioning that they got it successfully. This creates transparency between a brand (you) and a buyer.

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As more pure-plays, consumer product businesses, and traditional retailers concentrate on digital retail, Purchase Order Acknowledgement is becoming more common. In fact, Australian retail is largely moving in the course of more refined and EDI supply chains — which is, of course, good news.