What Is an EDI 820 Remittance Advice?
The EDI 820 is the X12 transaction set that carries payment and remittance information from a buyer (or their bank) to a supplier. It can either authorize a payment through the banking system or simply describe a payment that has already been made - listing exactly which invoices are being paid, what amount applies to each, and any deductions, allowances, or chargebacks that explain why the payment is less than the invoice total.
Two Common 820 Flows: Remittance-Only vs. ACH CTX
The same 820 transaction set is used in two distinct flows, and it is important to know which one a trading partner is sending:
- Remittance-only 820 - The buyer sends the 820 directly to the supplier as a remittance advice. The actual money moves separately (ACH CCD, wire, or check). The supplier uses the 820 to reconcile cash that has already hit the bank.
- ACH CTX 820 - The buyer's bank wraps the 820 inside an ACH CTX payment, so payment instructions and remittance detail travel together through the banking network. The supplier's bank delivers the 820 alongside the deposit.
EDI 820 Segments and Structure
A standard 820 follows a header / detail pattern that ties each dollar of payment back to specific invoices and adjustments:
- BPR - Payment amount, payment method (ACH, check, wire), effective date, and routing/account details.
- TRN - Trace number that uniquely identifies the payment for reconciliation.
- REF - Cross-references such as check number or remittance ID.
- N1 - Payer and payee identification.
- ENT - Entity loop grouping the payment by invoice or party.
- RMR - Remittance reference for each invoice being paid, including invoice number, paid amount, and discount taken.
- ADX - Adjustment amount and reason code for each deduction or chargeback.
Common Deduction and Adjustment Reason Codes
Most of the value in an 820 is in the adjustment detail. Typical reason codes Yoke sees from major retailers:
- Pricing or quantity discrepancy vs. the 850 / 810.
- Shortage or damage at receiving.
- Compliance chargeback (late ASN, label error, OTIF miss).
- Promotional or co-op allowance.
- Trade discount or early-pay discount taken.
- Returns or RMA credits applied to the open invoice.
How Yoke Handles the EDI 820 for You
Yoke ingests 820s from retailers and banks, auto-matches each RMR to the originating 810, books deductions to the right GL accounts using reason-code mapping, and flags discrepancies (short pays, unauthorized deductions, missing remits) so your AR team works exceptions instead of spreadsheets - cutting DSO and surfacing recoverable chargebacks.
Frequently Asked Questions
Quick answers to the questions buyers and suppliers ask most about this transaction.
- What is an EDI 820? The EDI 820 is the X12 Payment Order / Remittance Advice transaction set. It tells a supplier which invoices a buyer is paying, the payment method, and any deductions or adjustments applied to the payment.
- What is the difference between an EDI 820 and an ACH payment? An ACH payment is the movement of funds through the banking network. An 820 is the remittance information that explains the payment. They can travel together in an ACH CTX transaction, or the 820 can be sent separately as a stand-alone remittance advice.
- Does the EDI 820 actually move money? It can. In ACH CTX flows, the 820 is embedded in the ACH payment and the bank moves funds based on the BPR segment. In remittance-only flows, the 820 only describes a payment - funds move separately by ACH CCD, wire, or check.
- How is the EDI 820 used in cash application? AR systems parse the RMR segments to match each paid amount to the original 810 invoice, then post adjustments from ADX segments to the right GL accounts. This eliminates manual lockbox keying and exposes unauthorized deductions for dispute.
- Who sends the EDI 820? The buyer or the buyer's bank sends the 820. In remittance-only flows, it comes directly from the buyer's AP system. In ACH CTX flows, the buyer's bank originates the payment and the 820 is delivered with the deposit.