What is EDI?
“EDI” stands for “Electronic Data Interchange.” This is composed of Electronic Media Claims (EMC), Electronic Remittance Advice (ERA), Electronic Claims Status, and Electronic Fund Transfer (EFT). The purpose of EDI is to minimize paperwork by allowing transactions ordinarily done by paper to be done electronically.
. Electronic Data Interchange (EDI) is a specific standardized protocol for communicating business information in an electronic form from computer to computer. EDI is NOT e-mail and is not dependent on the Internet. To over-simplify, EDI is about doing business and carrying out electronic transactions with EDI “trading partners.”. EDI covers most things that are done using paper based communication, for example placing orders with suppliers and carrying out financial transactions. This is why the term “paperless trading” is often used to describe EDI. More formally, EDI is described as the interchange of structured data according to agreed message standards between computer systems by electronic means. Structured data equates to an unambiguous method of presenting the data content of a document, be it an invoice, order or any other document type. The method of ensuring the correct interpretation of the information by the computer system is defined by the standard.
Electronic Data Interchange (EDI) is commonly defined as the application-to-application transfer of business “documents” between computers, i.e., doing business and carrying out transactions between trading partners electronically. EDI covers most transactions that are typically done using paper based communication, for example placing purchase orders with suppliers and carrying out certain financial transactions with a company’s customers and vendors. This is why the term “paperless trading” is often used to describe EDI. Many businesses choose EDI as a fast, inexpensive, and safe method of sending purchase orders, invoices, shipping notices, and other frequently used business documents. Today, there are over 80,000 companies using EDI. EDI is not a new concept. It has been practiced for over two decades in both Europe and North America, spanning a multitude of industry sectors that produce or market various products and services. As the powers of computing and telecommunications have
