Electronic Data Interchange (EDI)

Meaning & Definition

Electronic Data Interchange (EDI) is the electronic exchange of business information between businesses in a standardized electronic format. EDI allows for the electronic exchange of business documents such as purchase orders, invoices, and shipping notices instead of physical paper-based documents.

Why Electronic Data Interchange Matters?

• Minimises paperwork and administrative tasks.
• Increases speed and accuracy of business transactions.
• Eliminates data entry errors.
• Enhances better communication between business entities.
• Increases efficiency and reduces costs.

Compliance Requirements

There is no specific legislation that only covers EDI, but organizations that practice electronic data exchange need to adhere to data protection and cybersecurity legislation, depending on the country and industry.