Electronic Data Interchange (Edi) Definition

An electronic data interchange (EDI) is the computer-to-computer exchange of business documents in a standard format.

EDI enables companies to do business with each other electronically, eliminating the need for paper documents. It also saves time and reduces errors by automating many of the tasks involved in processing orders and payments.

The most common type of EDI is transaction sets, which are standardized messages that include all the information necessary to conduct a specific type of business transaction, such as an order, invoice, or shipment notification.

Transaction sets are created using EDI software and then transmitted between trading partners using an EDI network. The network validates the message to ensure it meets all EDI standards, then routes it to the appropriate recipient.