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What is electronic data interchange?
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What is electronic data interchange?
Electronic Data Interchange (EDI) is the electronic interchange of business information using a standardized format; a process which allows one company to send information to another company electronically rather than with paper. Business entities conducting business electronically are called trading partners.
Many business documents can be exchanged using EDI, but the two most common are purchase orders and invoices. At a minimum, EDI replaces the mail preparation and handling associated with traditional business communication. However, the real power of EDI is that it standardizes the information communicated in business documents, which makes possible a "paperless" exchange.
The traditional invoice illustrates what this can mean. Most companies create invoices using a computer system, print a paper copy of the invoice and mail it to the customer. Upon receipt, the customer frequently marks up the invoice and enters it into its own computer system. The entire process is nothing more than the transfer of information from the seller's computer to the customer's computer. EDI makes it possible to minimize or even eliminate the manual steps involved in this transfer.
The process improvements that EDI offers are significant and can be dramatic. For example, consider the difference between the traditional paper purchase order and its electronic counterpart:
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What is electronic data interchange?
The exchange of information electronically, directly from one firm's computer to another firm's computer, in a structured format.
Community Answer
What is electronic data interchange?
Electronic data interchange (EDI) is the electronic transmission of structured data by agreed message standards from one computer system to another without human intervention. It is a system for exchanging business documents with external entities.
EDI refers to a family of standards and does not specify transmission methods, which are freely agreed upon by the trading partners.
The wide adoption of EDI in the business world facilitates efficiency and cost reduction. EDI is used in such diverse business-to-business relationships as:
Interchanges between health care providers and insurers
Travel and hotel bookings
Education
Supply chain management
Administration
Tax reporting
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What is electronic data interchange?
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What is electronic data interchange? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is electronic data interchange? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is electronic data interchange?.
What is electronic data interchange? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is electronic data interchange? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is electronic data interchange?.
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