- Electronic Data Interchange is an information technology that standardizes the exchange of information between two parties a transaction.
- Electronic Data Interchange (EDI) is consist of direct computer-to-computer transmission data in a machine readable , structured format.
EDI Application
- Electronic Data Interchange widely used on e-Commerce system and mostly used on B2B e-Commerce system.
- The communication line , communication hardware and support services for EDI are generally provide by telephone companies.
EDI on Accounting Transaction :
- EDI as transactional accounting information system that reduce the cost of between and transaction firm provide timely information for decision making.
- AICPA judge EDI to be the most important information technology for the accounting profession, in term of both organizational productivity and project impact on the of the professional accountant.
- The adopted EDI primary to improve the efficiency of accounting transaction with many of the licensed dealer who order it’s product.
- EDI reduce order processing time and as improvement is greater for more complex order .
- EDI reduce the level of order error as compared to conventional order submission method.
- EDI also mitigates the negative effect of order complexity on order entry time, the implication for account is enhance flexibility and reduce economic of scale in administrative work .
- To adopt EDI need capital investment such information technologies, manufacturing technologies.
- EDI technology allow business partner with recurring transaction to establish secure computer to computer exchange of data in standard format.
- EDI modifies traditional accounting information system and alters the work of accountant.
- Accurate information that EDI provides yields improvement in manufacturing performances.