What Is EDI?
EDI stands for Electronic Data Interchange. It is a structured way for companies to exchange business documents such as purchase orders, invoices, shipment notices, inventory updates, and payment data.
EDI in plain language
An EDI file is a business message written in a format that trading partners and systems agree to use. Instead of one person emailing a spreadsheet to another person, the sender creates a machine-readable document and the receiver imports it into their system.
In the United States, many retail, warehouse, transportation, and healthcare workflows use X12 EDI. Common document types include the 850 purchase order, 855 purchase order acknowledgment, 856 advance ship notice, 810 invoice, and 940 warehouse shipping order.
Segments, elements, and envelopes
EDI files are made of segments. A segment is similar to a row or record. Each segment starts with a short identifier such as ISA, GS, ST, BEG, PO1, SE, GE, or IEA.
Within a segment, values are separated by a delimiter, often an asterisk. A simplified purchase order line might look like this:
PO1*1*10*EA*15.25**VN*ABC123~That line can describe item number, quantity, unit of measure, price, vendor part number, and other values depending on the implementation guide.
Why EDI comparison matters
EDI teams often compare a known-good file against a new test file. A tiny value change can break a trading partner map, create a rejected transaction, or send the wrong business instruction downstream.
Useful EDI comparison work highlights changed lines, missing lines, added lines, and changed values inside a row. That is why USA Data Tools includes a browser-local compare view for EDI and other payloads.