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Working of EDI
1. Preparation of electronic documents
The first step in the sequence of EDI is the collection of information and data. The way to collect the required information should be same as the way to do it in the traditional system.
However, instead of printing out the data on paper in tradition, the system has to build an electronic file or database to store those data. In the case of companies who already use computer to issue their documents like purchase orders, they may already have some sort of databases which store those information, then they fan start with the next step described below.
2. Outbound translation
The next step is to translate the electronic file or database in to a standard format according to the specification of the corresponding document. The resulting data file should contain a series of structured transactions related to the purchase order for example. If more than one company is involved in the particular transaction, individual files should be produced for each of them. 3. Communication
Then the computer should connect and transmit those data files to the pre arranged Value
Added Network [VAN} automatically. The VAN should then process each file and route the appropriate electronic mailboxes according to the destination set in the file.
4. Inbound translation
The designated company should be able to retrieve the file from their electronic mailboxes in a constant period, and then reverse the process by translating the file from the standard format into the specific format required by the company’s application software.
5. Processing the electronic documents
The internal application system of the designated company can process the received documents now. All the resulted documents corresponding to the received transaction should use the same processes or steps to transmit back to the transaction initiator;

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