Electronic data interchange

Electronic data interchange (EDI) is the conduct of business using standardized transaction formats. One trading partner creates a transaction in a standard format and sends it to an electronic mailbox, from which another trading partner downloads the information for its own use. Ideally, these transactions are automatically created and read by the sending and receiving organizations, respectively. The result is a paperless exchange of information at high speed, since there is no transit time between the two parties. The transactions most commonly used in an EDI system are purchase orders and invoices. These systems are mostly used by larger organizations, since they are better able to afford the installation and integration of an EDI system into their in-house systems.

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