Using EDI to Improve the Efficiency of Accounting Transaction

What is EDI...?

• 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.