The Procurement Glossary » Electronic Data Interchange (EDI)
Electronic Data Interchange (EDI)
Technology & Systems
Also known as: EDI
Definition
A standardised format for exchanging business documents such as orders and invoices computer-to-computer.
Explanation
EDI predates web APIs but remains widely used for high-volume trading between large partners. Documents like purchase orders, advance shipping notices and invoices flow in agreed standard formats, removing manual entry and enabling straight-through processing.
Example
The retailer sends EDI purchase orders to its suppliers and receives EDI invoices back automatically.
Related terms
- API Integration — Connecting two software systems through an application programming interface so they can exchange data automatically.
- Advance Shipping Notice (ASN) — An electronic notice from a supplier detailing a shipment's contents and timing before it arrives.
- e-Invoicing — The exchange of invoices in a structured electronic format that can be processed automatically, without manual data entry.
- Straight-Through Processing — The end-to-end automated completion of a transaction without manual re-entry or intervention.
Frequently Asked Questions
What is Electronic Data Interchange (EDI)?
A standardised format for exchanging business documents such as orders and invoices computer-to-computer. EDI predates web APIs but remains widely used for high-volume trading between large partners. Documents like purchase orders, advance shipping notices and invoices flow in agreed standard formats, removing manual entry and enabling straight-through processing.
Can you give an example of Electronic Data Interchange (EDI)?
The retailer sends EDI purchase orders to its suppliers and receives EDI invoices back automatically.
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