transmission of business transactions from one company’s computer to another company’s computer. Transmission is achieved through an electronic communication network that uses translation software to convert transactions from a company’s internal format to a standard EDI format. Companies that participate in EDI are referred to as trading partners. Trading partners may be involved in on-line banking, on-line retailing, and electronic funds transfer. There are paperless transactions in an electronic format. In the case of EDI, the auditor should be cognizant of the possible impact on the gathering of evidential matter.
transfering data between companies using computer networks such as the Internet. With EDI, electronically transmitted data replaces paper documents in the business accounts receivable cycle. Electronic messages are sent through public data transmission networks or the banking system. When payments also are made through EDI, the payment instructions flow through the banking system.
the process of transferring data between and within companies electronically, instead of by paper. It is similar to electronic mail, except that an agreed-upon format is used for a particular type of document, such as an order form, which allows software to automatically process it and generate subsequent documents.
the transfer of information between organizations in machine-readable form in order to carry out business transactions. Electronic data interchange is becoming popular because it minimizes the errors that can occur if the same information has to be typed into computers several times.
method used to reduce workers compensation insurance costs by using a single database system to electronically link claims administration, medical claim costs, risk management, and vendor services. EDI can reduce errors in claims handling thereby making the process more efficient. Also, EDI permits the comprehensive gathering of demographic claims data pinpointing the factors that affect the risk.
the exchange of information from one company to another using a computer network, such as the Internet. Electronic data interchange involves computer-to-computer exchanges of invoices, orders, and other business documents and therefore effects cost savings and improves efficiency because it minimizes the errors that can occur if the same information has to be typed into computers more than once. At the same time, EDI provides an easily accessible mechanism for companies to buy, sell, and trade information. In the business-to-business market, major corporations have embraced EDI systems, and in order to reduce costs and improve efficiency and competitiveness, many corporate giants are now demanding that their suppliers convert their sales and purchasing operations into EDI systems as well. In the retail market, the use of EDI systems allows the retailer to implement quick response strategies that can reduce the time they must hold merchandise in inventory, which can result in substantial cost savings for the retailer.