EDI 101: What is EDI?
EDI, or electronic data interchange, is the technology that enables businesses to share important information with each other in a standardized digital format.
What is EDI?
Electronic Data Interchange (EDI) is key to enabling reliable and accurate communication in the supply chain. It simplifies how companies connect, automating the exchange of documents like purchase orders, invoices and shipping notices.
Gone are the days of relying on email, paper or fax machines—EDI brings speed, accuracy and efficiency to everyday business transactions. It works seamlessly with a variety of systems, including eCommerce platforms, ERPs, warehouse management systems and accounting software.
EDI helps businesses communicate better, faster and with fewer errors, making it an essential tool for modern supply chain operations.
How does EDI work?
EDI enables businesses to exchange key documents electronically in a standardized format, making it possible for partners to communicate in sync with each business’s specific processes and rules. For example, an 850 Purchase Order initiates an order, an 855 Purchase Order Acknowledgment confirms it, an 856 Advance Ship Notice provides shipping details and an 810 Invoice completes the transaction.
Why does EDI matter?
EDI improves efficiency and accuracy across the supply chain. It replaces slow, error-prone tasks like manual data entry with fast, automated transactions, ensuring greater accuracy of orders, invoices and shipments. EDI is a necessity for staying competitive and meeting customer expectations.
How will EDI benefit my business?
- Faster transactions—Automate order processing, invoicing and shipments to keep business moving without delays.
- Fewer errors—Eliminate manual data entry mistakes, ensuring order and payment accuracy every time.
- Lower costs—Reduce expenses from paper-based processes, lost documents and inefficiencies.
- Stronger partnerships—Meet trading partner requirements and improve communication and collaboration.
- Scalability—Handle more orders easily and keep up with increasing demand without extra manual work.
What is EDI?
EDI, or Electronic Data Interchange, is how retailers and suppliers exchange critical business documents—like purchase orders, invoices, and shipping notices—without email or manual entry. This video shows how modern EDI powers a connected, automated retail ecosystem.
How do I get started?
Getting started with EDI is easy! A trusted, full-service EDI partner can simplify compliance and handle setup, mapping, integration with existing systems and ongoing support. With the right approach, businesses can quickly start exchanging documents electronically and see the benefits of automation right away.
EDI system integrations
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EDI for sellers
SPS is the only full-service EDI solution on the market. Find out why so many sellers rely on SPS Commerce Fulfillment.
EDI for retailers
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How healthy is your supply chain?
Wondering where to get started? Take our five-question Supply Chain Health Vitals Checkup, where we identify gaps in your existing processes and share personalized resources to help you get started.
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