Electronic Data Interchange (EDI)

EDI streamlines business processes by replacing the manual entry of data received through traditional methods, such as email, fax, and mail, with electronic exchanges of business documents between two companies. To begin, a company creates an electronic document using information from their internal business systems, spreadsheets, or related transactions. This document uses standardized EDI formats, known as transaction codes, which are easily ingested and utilized by many businesses.

When the document is ready to be sent to a trading partner, it is transmitted through a secure EDI network, which could be a direct connection between the two companies or through a third-party provider. The EDI network ensures that the document is securely transmitted and received by the intended recipient.

The recipient’s EDI software then translates or “maps” the data in the document into a format that their internal systems can understand and process. 

Once the data is translated, it can be automatically imported into the recipient’s business systems, eliminating the need for manual data entry. The recipient can then create a response document, such as an invoice or shipping notice, using the same EDI process to send back to the originating company.