972-836-7750 Request a demo Talk to an expert
Talk to an expert Request a demo Call sales 972-836-7750

X12 transaction guide · Finance

EDI 847 Material Claim

The X12 document trading partners use to claim costs for material that is damaged, unusable or obsolete, or made unnecessary by an order change.

Sent by
Supplier or buyer, depending on the claim
Received by
The trading partner responsible for the cost
Standard
ANSI ASC X12

What is an EDI 847?

The EDI 847 Material Claim is the ANSI X12 transaction set trading partners use to advise each other of costs and charges for fabricated or purchased material that has been deemed damaged, unusable or obsolete. A seller can use it to claim the cost of material it built or bought on the buyer's authorization before an order was cancelled or changed, and a buyer can use it to claim against a seller for nonconforming material.

The 847 is not for claims against carriers or insurers; freight loss and damage use other transaction sets. In automotive and other release-driven industries it supports the settlement of fabrication and raw material liability after schedule changes.

How the EDI 847 worksDiagram of the EDI 847 Material Claim. Supplier or buyer, depending on the claim sends it to the trading partner responsible for the cost. It usually starts the exchange. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BHT (Beginning of Hierarchical Transaction) and AMT (Monetary Amount Information) and detail: the required HL loop with HL (Hierarchical Level) and LIN (Item Identification). 2 optional loops are listed by their first segment.How the EDI 847 worksMaterial Claim: who sends it, where it fits and what the standard marks required1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeEDI 847SENDERSupplier or buyer,depending on the claimRECEIVERThe trading partnerresponsible for thecost997 or 999 acknowledgment back, if the partners agreeUSUALLY FOLLOWED BY997FunctionalAcknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDsISA … IEAFunctional group, ID code MXGS … GETransaction set 847ST … SEHEADINGBHTBeginning of Hierarchical TransactionAMTMonetary Amount Information+ 1 optional loop, starting with:N1DETAILRequired loop HL · repeats many timesHLHierarchical LevelLINItem Identification+ 1 optional loop, starting with:N1Blue box: required loop. Optional loops are listed by the segment that starts them; when a loop is used, that first segment is required. Optional segmentsoutside loops are not drawn.Structure: required segments and loops in the X12 008010 listing for the 847. Your trading partner's implementation guide adds its own requirements.
How the EDI 847 worksDiagram of the EDI 847 Material Claim. Supplier or buyer, depending on the claim sends it to the trading partner responsible for the cost. It usually starts the exchange. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BHT (Beginning of Hierarchical Transaction) and AMT (Monetary Amount Information) and detail: the required HL loop with HL (Hierarchical Level) and LIN (Item Identification). 2 optional loops are listed by their first segment.How the EDI 847 worksMaterial Claim: who sends it, where it fits andwhat the standard marks required1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeEDI 847SENDERSupplier orbuyer,depending onthe claimRECEIVERThe tradingpartnerresponsible forthe cost997 or 999 acknowledgment back, if the partnersagreeUSUALLY FOLLOWED BY997Functional Acknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDs (ISA… IEA)Functional group, ID code MX (GS … GE)Transaction set 847 (ST … SE)HEADINGBHTBeginning of HierarchicalTransactionAMTMonetary AmountInformation+ 1 optional loop, starting with:N1DETAILRequired loop HL · repeats manytimesHLHierarchical LevelLINItem Identification+ 1 optional loop, starting with:N1Blue box: required loop. Optional loops are listedby the segment that starts them; when a loop isused, that first segment is required. Optionalsegments outside loops are not drawn.Structure: required segments and loops in the X12008010 listing for the 847. Your trading partner'simplementation guide adds its own requirements.

How to read this diagram: the top row shows who sends the 847, to whom, and which documents usually come before and after it. The lower part shows what X12 release 008010 itself requires: the envelopes around the 847 and the segments and loops the standard marks as required, area by area. Optional loops are listed by the segment that starts them rather than drawn in full. This is the standard's minimum, not a trading partner's requirement: each partner's implementation guide usually makes some optional loops mandatory, restricts the codes and may use a different release.

Expand diagram Download SVG

When it is used

  • Claiming fabrication or raw material costs after a schedule cut
  • Claiming the cost of obsolete material after an engineering change
  • Charging a supplier for nonconforming material

Where it fits in the document flow

This document 847 Material Claim
Usually followed by 997 Functional Acknowledgment

Structure

Mandatory segments in the 847 (X12 release 008010)

The segments X12 release 008010 marks as mandatory at their level, in order. Segments inside optional loops are needed only when the loop is used. This is the standard's requirement, not your trading partner's: each partner's implementation guide names the release it uses, adds the optional segments it requires and restricts the values. The requirement status comes from one published X12 reference listing and has not been checked against a second source.

  • ST
  • BHT
  • AMT
  • N1
  • HL
  • LIN
  • SE

Practical example

The 847 in practice

A customer cuts its releases for a discontinued model after its supplier had fabricated 800 parts under the authorization in the 830 planning schedule. The supplier sends an 847 claiming the cost of the finished parts and the raw material on hand, referencing the authorization and the part numbers. The customer validates the claim against its authorized quantities and settles it.

Implementation

Implementation considerations for the 847

  • Reference the schedule or authorization that justifies the claim, such as the fabrication authorization in an 830.
  • Separate finished goods, work in process and raw material in the claim lines.
  • Agree in advance how claims are approved and paid, since the 847 does not settle them itself.
  • Keep material claims apart from freight claims, which use transportation transaction sets.

How ECOM helps

Automate the 847 with ECOM

Industry

Automotive

Schedules, ship notices, labels, self-billing and multi-plant routing for automotive suppliers.

Industry

Manufacturing

Customer schedules, supplier connectivity and shipping integrated with the ERP for manufacturers.

Solution

Financial Document Automation

Automate invoices, remittances, payment files and bank statements from capture to posting.

More general questions about EDI are answered in the EDI FAQ.

Related transactions

Related finance documents

All 58 finance documents

Need help with the EDI 847?

ECOM maps, tests and monitors X12 documents for your trading partners and integrates them with your ERP.

Request a Demo Contact us