EDI 820 Remittance Advice: Matching Payments to Invoices
The buyer’s note of what it is paying: which invoices, how much, and any deductions taken.
- Document
- X12 820: Payment Order/Remittance Advice
- Sent by
- Buyer
- Sent to
- Supplier
- In NetSuite
- Customer payment applied to invoices, with deductions
(01)What it is
The 820 tells the supplier what a payment covers. A large customer may pay hundreds of invoices in one transfer, and the 820 lists each invoice, the amount paid, and any deductions such as chargebacks, allowances or short-payments.
Without it, someone in accounts receivable matches payments to invoices by hand. With it, cash application can be mostly automatic, and deductions become visible the day they are taken.
(02)What it carries
- 01Payment amount, date and method
- 02The invoices being paid, by number
- 03The amount paid against each invoice
- 04Adjustments and deductions, with reason codes
In plain language. Each trading partner’s implementation guide sets the exact fields it requires.
(03)Where it fits
Documents usually exchanged before and after the 820.
(04)In NetSuite
An 820 maps to a NetSuite customer payment applied to the listed invoices. Deductions need a decision: leave the invoice partly open, post the difference to a deductions account, or create a credit memo, and record the reason code so disputes can be tracked.
(05)Common mistakes
- 01Applying the payment to the oldest invoices instead of the ones listed, so the wrong invoices stay open.
- 02Writing off deductions without recording the reason code, which makes disputes impossible later.
(06)Questions
What is an EDI 820?
The EDI 820 is the X12 payment order/remittance advice: it lists the invoices a payment covers and any deductions the buyer took.
Does the 820 move money?
Not by itself. The payment travels through the bank (for example by ACH); the 820 is the detail of what that payment is for, sent alongside it.
(07)More billing & payment documents