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Electronic Data Interchange (EDI)

It is the exchange of business documents in a standard format between companies. In its most basic form, EDI is a standard electronic format that substitutes paper-based records like purchase orders and invoices. Organizations may save time and money by automating paper-based processes, which eliminates expensive mistakes caused by human processing.

Information is transferred directly from one organization's computer application to another's computer application through EDI exchanges. The position and arrangement of information in a document format are defined by EDI standards.

Where mostly EDI is used

EDI integration is used by a variety of industries to communicate a variety of document types, including purchase orders, invoices, quote requests, loan applications, and more. In most cases, these companies are trade partners that exchange goods and services on a regular basis as part of their supply chains and B2B networks.

EDI message standards specify all EDI transactions. For data quality, it is critical to have effective governance systems in place. The EDI document may not be handled successfully if the information is missing or in the wrong location.