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EDI which stands for Electronic Data Interchange is the computer-to-computer communication of business documents between companies in a standard format. It is a paperless way to send and receive Purchase Orders, Invoices, etc. EDI replaces human-readable documents with electronically coded documents.

The sending computer creates the document and the receiving computer interprets the document.  Implementation of EDI streamlines the process of exchanging standard business transactions. Companies save by eliminating people cost as well as the cost due to errors and double entry of data.

• Typically, an EDI document begins in a trading partner's business application computer system.
• A document is produced and sent to a specialized computer program that translates the document into a standard EDI format.
• The EDI file is then transmitted, usually via the trading partner's VAN.
• When the VAN receives the transmission, it is sent to the intended recipient's mailbox, identified by its EDI ID.
• The trading partner receives the document from its VAN when it connects and empties its mailbox.
• Through the use of an EDI translation program, the document is translated into a file that will be processed by the trading partner's business application system.
• During the inbound translation process, a new EDI document is transmitted back to the sender to acknowledge receipt of the document.   This new document, the functional acknowledgment (FA), assures the sender that its transmission has been received.

EDI and other similar technologies save a company money by providing an alternative to, or replacing information flows that require a great deal of human interaction and materials such as paper documents, meetings, faxes, email, etc. Even when paper documents are maintained in parallel with EDI exchange, e.g. printed shipping manifests, electronic exchange and the use of data from that exchange reduces the handling costs of sorting, distributing, organizing, and searching paper documents. EDI and similar technologies allow a company to take advantage of the benefits of storing and manipulating data electronically without the cost of manual entry or scanning.

EDI Associates - free online Standards Browser

Browse Tradacoms, X12, EDIFACT, Odette, UCS Standards

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Here is a breakdown of the timeline of the X12 standards development:

1. 1979 - ASC X12 formation (Transportation, Government, Computer manufacturers)
2. 1982 - ANS Version 1 ASC X12
3. 1986 - ANS Version 2 ASC X12
4. 1987 - DISA formed as the admin arm of ASC X12
5. 1989 - TDCC moves to ASC X12
6. 1992 - ANS Version 3 ASC X12
7. 1997 - ANS Version 4 ASC X12, 4 digit year is incorporated in 4010
8. 1999 - EDI/XML task group formed
9. 2000 - HIPAA - 9 transactions for health care industry
10. 2002 - EDI - $3.2 trillion, 86% of B2B e-commerce
11. 2004 - ANS Version 5 ASC X12
12. 2005 - CICA XML Schemas published