What is EDI?

Electronic Data Interchange (EDI)

Electronic Data Interchange (EDI) is the computer to computer exchange of information between company's, using an industry standard format. EDI trading partners exchange business data between their respective computer systems, rather than through other conventional communication methods (i.e. fax, email or postage).

In its simplest form, EDI is the computer to computer exchange, between two company's, of standard business documents in electronic format. If you decide to implement EDI in your business, it's not necessary for you and your trading partners to have identical document processing systems. Any business can enter the world of EDI and begin taking advantage of the speed and economy of electronic commerce.

EDI documents generally contain the same information that would normally be found in a paper document used for the same organisational function, examples include:

  • Purchase Orders
  • Order Responses
  • Despatch Advice
  • Invoices
  • Statement/Remittance
  • Debit Notes
  • Price Catalogue

Everyday business transactions generate a flood of paper documents; purchase orders, order responses, delivery notes, invoices etc. Although most businesses are now computerised and work internally with application systems for accounting, stock handling and process control, their communications with their trading partners involve labouriously extracting information from computer databases to produce printed documents and physical transfer of these documents to their partners.

EDI use is not limited by differences in computer systems or communications equipment among trading company's (your customers). It bridges the previous information gap between company's with different computer systems.