EDI or Electronic Data Interchange has been in use for many years. Electronic Data Interchange is a computer to computer exchange of standard business data and documents in electronic format among companies in the most basic form. There are two significant elements in basic Electronic Data Interchange.
First, your paper-based documents are replaced by electronic documents. Second, the exchange of documents between two or more companies takes place in a standardized format. With these two methods, any company can enter the EDI world and take advantage of its e-commerce economy and speed.
1. How Does Electronic Data Interchange Work?
All the information and data of your company stored within the ERP system that include data and information related to billing and invoicing, inventory levels, purchasing, and many others. EDI solutions like Edisoft or Mapadoc participate with ERP systems to use and access the information vital to create the documents you require to do your business with other companies.
Both your clients and suppliers will have specific requirements to do your business, including unique pricing, ship-to addresses, and many others that determine the deals. There are three steps to prepare and send EDI documents.
Step 1: Preparation of Documents
The first step is to prepare a document that is collecting and organizing the data. For instance, instead of printing your purchasing order record, your systems will create electronic files with the essential information to create EDI documents. The methods of generating electronic documents or sources of data can include:
● Data entry through screens
● Exporting PC-based data from databases or spreadsheets
● Reformatted electronic reports into data files
Step 2: Translating Documents into EDI Format
The second step is to translate the documents via translator software into EDI format. One can purchase any translator software that fits their business needs most. The translating software is available in a wide range that suits your business. This system handles hundreds of transactions.
Step 3: Transmit or Connect EDI Documents to Business Partner
Once you have translated your business documents to EDI format, they are ready to send it to your business partners. There are several ways to connect your partners, so it is up to you what method you want to choose. Whether you want a direct approach to transmit data or rely on the network provider to connect or transfer your EDI documents to your partner. Meade Willis lets your business use both methods to share or transmit the data to your partner.
2. Benefits of EDI
When you use the EDI method to exchange your documents, it comes with many benefits, including reducing errors, increased efficiency of automating transactions, content validation, lowering costs, and making the whole process faster. The paper-based document comes with many maintenance and extra charges; the EDI method is easier to use and free from all mess.
Moreover, the EDI method is considered for improving speed and time-saving. It comes with tight security to keep your data and record secure. And the one thing you like most about this system is its simplicity as it is not complicated and daunting.
Harry Wilson is the Head of Digital Marketing Department at Globex Outreach. He helps clients grow their online businesses and occasionally writes blogs to share his experience with other professionals.