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What is Electronic Data Interchange

What is EDI

What is EDI

When two business companies collaborate to work together, a lot of data exchange takes place.  Bills, invoices, payment documents, and shipping details are the most common data that are exchanged on a regular basis. These documents are obtained from various departments of an organisation. Each of these documents from different departments contains immense information that often needs to be shared. Exchanging such a huge volume of data takes a lot of time and effort to organised and send. This is when EDI comes handy to remove all the extra efforts and reduce the usage of papers. 

What is EDI?

Electronic Data Interchange (EDI) is an online based software, called as a service product, which collects all the data from the various departments and keeps it stored up to date in the cloud. It also handles system to system exchange in a standard electronic format of business documents, eliminating the usage of paper and human intervention. Business documents like purchase orders, invoices, payments, advance shipping notices are transferred electronically.

Why is EDI important?

Once in your lifetime, you have come across any documents which have few errors or which do not belong to your department. It is mainly because of the confusion happening by the workers while transferring the documents from one place to another. If this is the scenario every day, then your company can face some huge losses which you don’t want to happen. The main advantage of EDI is that it eliminates all the errors. Moreover, data transactions here are done online so it goes to the right person in the right department at the right time.    

What are the advantages of EDI?

Apart from reducing errors, EDI also has some more advantages. They are:

What are the types of EDI?

There are many types of EDI which are enabling different transactions across the trading community. They are:

EDI Software

Choosing an appropriate EDI Software is a big task. Some of  the famous EDI software vendors are:

Future of EDI

Considering today’s scenario, EDI is growing rapidly. This is mainly because companies are on the verge of understanding the importance and impact of EDI on their company. So the question here arises is what is the future of EDI? There are three main platforms where EDI is headed towards. They are:


ANSI X12 835 is what type of EDI transaction?

ANSI 835 EDI is the electronic version for the Paper Health Care Claim Payment/ Advice. This is used for making the payments and sending an explanation of benefits from health insurance.

ANSI X12 270 is what type of EDI transaction?

ANSI X12 270 is a transaction set that contains the formats and establishes the data contents with the EDI environment. This is used to enquire about the employer benefit plan under the subscriber’s policy.

Overall, EDI is a very important platform for companies to improve the efficiency and productivity of their company. EDI enables you to perform day to day business tasks at a faster rate with high accuracy. 

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