EDI Guide

What is EDI?

EDI | Electronic Data Interchange is computer-to-computer communications and transmission of business information in a standard and structured format. Organizations are moving to EDI to streamline and improve business processes and transactions by communicating data electronically.

What is EDI, EDI, Electronic Data Interchange

EDI replaces previous order processes such as mail, fax or email by electronically exchanging documents between two companies with different internal systems. A translator will convert the business application data to and from another data format between the trading partners. Trading partners are two separate entities, i.e. supplier vs. buyer. View more EDI Industry Terminology.

The order processing life cycle is shortened significantly by creating a link between computer systems of different entities seen in Figure A. The most commonly-used documents in Figure A. are for example (850) Purchase Order and (810) Invoice. View more Commonly-Used EDI Documents.

Figure A

EDI, What is EDI, Electronic Data Interchange, What is EDI

Benefits of Electronic Data Interchange

Labor minimizes data entry
Cost Savings eliminates expense of manual steps
Inventory reduces lead time on orders
Communication improves efficiency of communication and relationship with partners
Responsiveness quicker response time
Accuracy eliminates errors and submission of inaccurate data
Efficiency integrated electronic data interchange makes the order processing more efficient and streamlined