Electronic Data Interchange (EDI), is the computer to computer exchange of business documents in a standard electronic format among business partners. Businesses can move from a paper-based business document exchange to an electronic one, which offers major benefits, such as lower costs, faster processing speeds, and better relationships with business partners. If you want to know what does EDI mean visit https://www.cin7.com/ultimate-guide-to-edi/


Computer-to-computer EDI replaces postage, fax, and email. Email is an electronic method of communicating with others, but the information must be handled by humans and not computers. The process of documents is slowed down and errors are introduced by having people involved. Instead, EDI documents can be sent directly to the appropriate application on the receiver’s computer (e.g. the Order Management System), and processing can start immediately.

Documents for business

These documents are the ones that are most commonly exchanged between businesses. Purchase orders, invoices, and advance ship notices are the most commonly exchanged documents via EDI. Many other documents can be exchanged via EDI, including customs documents and inventory documents, bill of lading, and bill of lading.

Standard format

Because EDI documents are to be processed by computers, not humans, a standard format is required so that the computer can read and understand them. The standard format describes the information and how it is presented.

Businesses often use an EDI translator – whether it is in-house software, or through an EDI service provider – to translate EDI data so that their internal applications can use the data and allow for the processing of documents.

Partner companies

EDI documents are usually exchanged between two companies. These companies are called trading partners or business partners.