A Payment Order/Remittance Advice is sent by a payer to a payee to communicate payment details and reconcile amounts owed. Typically issued by employers, benefit administrators, or companies making disbursements in response to invoices, payroll obligations, or contractual arrangements, this transaction set uses the BPR (Beginning Segment for Payment Order/Remittance Advice) segment to establish payment method and amount, the N1 loop to identify parties involved (payer, payee, and remittance recipient), and the RMR (Remittance Advice Accounts Receivable Open Item Reference) loop to reference specific invoices or obligations being paid. The structure accommodates complex scenarios including multiple payees, adjustments tracked via the ADX (Adjustment) segment, and supporting details such as notes (NTE) and reference identifiers.

Consider a manufacturing company, Midwest Parts Inc., issuing a payment to its supplier Northeast Electronics. Midwest sends a 820 transaction containing the payer details in the header N1 loop, the payment amount and method in the BPR segment, and one or more RMR loops that reference specific open invoices—for example, invoice PO-12485 for $15,000 and invoice PO-12501 for $8,750. If a 2% early-payment discount of $475 applies, an ADX segment captures the adjustment. The transaction concludes with totals in the SE trailer, and Northeast Electronics receives the 820 to automatically match the payment against their accounts receivable records and reconcile their books.