EDI, Electronic Data Interchange, is a method for electronically transferring business documents between different computer systems. EDI is for any business that exchanges business documents with other businesses as part of their trading relationships. EDI enables two or more companies to exchange documents electronically, including electronic document exchange between a retailer and its suppliers and customers. EDI is automated and standardized, removing the need for manual data entry. 

Today, EDI is typically used for the exchange of electronic orders and invoices but can also be used for exchanging purchase orders, packing slips, etc. Standardized formats tailored to both the sender's and receiver's individual business requirements are used for document transfers. One of the most common methods to connect to EDI is by integrating it with the company's ERP and accounting systems. 

With EDI, you eliminate physical paper documents and PDF files. This means avoiding the need to spend a lot of time on manual processes, such as entering data from paper or PDFs into your ERP system. 

EDI is used in most industries, especially among retail and manufacturing companies as well as wholesalers, to optimize business processes by electronically exchanging orders and invoices. In the public sector, EDI is a requirement, and specific industry-approved EDI formats dictated by the EU are used.  

There are a few things to think through when adopting EDI, depending on the demands of your business needs. Transaction volume, resources and support are all important factors of consideration when choosing the right solution. 

Using EDI can transform the fortunes of businesses, large and small, with benefits including reduced costs and improved cash flow to name just a few. EDI is a game changer for many businesses. 

A Value Added Network — or VAN — is a secure private network which acts as an intermediary to enable EDI connectivity between trading partners and other VANs. 

EDI integration is the electronic communication of business messages, such as orders and invoices, credit notes and ASN’s, internally between your own EDI system and your own back office accounts, warehouse or ERP systems, removing the need for manual re-keying of information. Businesses can use EDI integration tools to manage their EDI activity from their business system and remove manual rekeying processes from their organization. 

An EDI mailbox is a file storage area within a computer which can be uniquely identified from connected mailboxes and VANs in other locations, and where EDI messages are consolidated and stored for retrieval by a vendor or supplier. 

An EDI hub is usually an organisation that buys multiple products and services and does so by sending orders electronically to its suppliers, and receiving electronic invoices in return. 

EDI transactions, documents and files refer to the EDI messages that are exchanged between trading partners.