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Briefly, Electronic Data Interchange (EDI) is the computer to computer exchange of business documents (Purchase Orders, Invoices, Remittance Advice etc.) in a pre-defined standard format over a data network (eg. Value Added Network).

VANs provide a variety of services including document tracking and mailboxes. The information sent by Company 1 is received by its trading partner’s (Company A) computer in EDI format. This data is translated (with the use of translation software such as globalEDI) into the company A’s main application or into human readable format to be displayed on the computer screen or printed. Company A can then respond in a similar manner.

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The benefits are:
EDI offers a fast, convenient method of conducting trade with your Partners using electronic documents rather than paper.
1. reductions of paperwork and associated savings
• one-time data entry
• reduced errors and improved error detection
• faster management reporting, automatic reconciliation
• reduced clerical workload, higher productivity without increasing staff
2. more timely communications
• rapid exchange of business data
• elimination of mail charges, courier services
• reduced inventory safety stocks
• improved production cycle
3. uniform communications with all trading partners
• customers
• suppliers
• carriers
• banks and other financial institutions
• government
4. better market position relative to non-EDI competitors
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