EDI Document Flow

Electronic Data Interchange (EDI) is a method of transferring electronic data in a predefined format from one computer application to another over a communications link.

EDI is the electronic equivalent of processing paper documents and is at the center of electronic commerce. Companies that use EDI reduce the number of errors and the processing time associated with the paper document exchange. Companies can exchange documents directly or they can use a third-party.

EDI document flow is faster and more efficient than paper document flow. The following table compares the two document flows side-by-side to illustrate the benefits of implementing EDI as a means of exchanging documents electronically:

Paper Flow Time Frame: Days	EDI Flow Time Frame: Minutes to Hours
Data entry personnel enter the document information into a computer system.	Data entry personnel enter the document information into a computer system.
The business application creates a document file and sends the file to a printer.	The business application creates a document file.
A printer prints the document.	The EDI system converts the document file into an EDI document file and sends it to a value-added service provider (VASP).
Support personnel place the document into an envelope that is addressed to a customer.	The VASP delivers the document to a customer VASP mailbox.
The envelope goes through the postal system and is delivered.	Customers electronically retrieve the EDI document files from their VASP mailbox.
Customers receive the envelope, open it and remove the document.	The customer's EDI system processes the EDI document file and creates an application file.
The customers enter the document information into their computer system.	The customer's business application adds the document file information to its database for processing.
The customer's business application processes the document information.	The customer's business application processes the document information.