What Does It Mean to Be EDI Capable?

If you've just landed your first major retail partnership, you've likely already been told you need to "become EDI capable" to trade with them.

For suppliers branching into retail sales, EDI (Electronic Data Interchange), can feel like a massive undertaking, but with a clear definition and outlined steps, your organization can unlock a massive new growth channel. 

If you’ve just been asked to “become EDI capable,” don’t panic. It doesn’t mean you have to rebuild your systems overnight.

In this guide, we’ll break down what being EDI capable really means, how EDI capability works, and how to overcome the barriers that hold suppliers back from full automation.

Defining: What Is EDI Capable?

Being EDI capable means your company is able to transmit documents, like purchase orders and invoices, in the format your trading partners require. In effect, it lets suppliers and retailers "speak the same digital language" without manually handling documents. 

When we talk about “systems,” we mean the platforms your business already uses; your ERP or accounting software. EDI capability ensures those systems can interpret and act on incoming data automatically.

Once you're EDI capable, a retailer can send you an 850 purchase order, and your system automatically picks it up, creates a sales order, generates an 856 ship notice, and closes the loop with an 810 invoice. All without emails, spreadsheets, or data entry. 

It’s a common misconception, however, that simply purchasing EDI software makes a business “EDI capable.” EDI capability isn’t just about having tools, it’s about how well your business can actually use them.

To be truly EDI capable, your business must have:

• The ability to send/receive EDI documents (like 850s, 810s, and ASNs)

• Systems that can translate and map data between your ERP and EDI docs

• Automated workflows that eliminate the need for manual entry

A business that purchases EDI software but still has to rely on rekeying data into its ERP isn’t truly EDI capable. The goal is seamless, automated, and scalable EDI ERP integration.

EDI Capable vs. EDI Compliant: What’s the Difference?

These terms sound similar, but they mean very different things.

• EDI compliant means your files meet a specific trading partner’s technical standards. You can send and receive documents that follow their rules.

• EDI capable means your internal systems can automatically process those documents and trigger real actions, like creating or fulfilling an order.

Compliance keeps you connected. Capability keeps you competitive.

Beyond File Exchange: True EDI Capability Requires System-to-System Flow

Where many suppliers and distributors get stuck is with an EDI provider that only handles basic file exchange, where documents are only sent or received. That is not a scalable EDI-capable infrastructure. 

Effective EDI capability means your systems are connected. Order data flows from retail partners straight into your ERP, then to fulfillment and invoicing. 

When EDI is built into your operational backbone, not bolted on, every document becomes an action, not a manual task. That’s what separates companies that merely comply with EDI requirements from those that run digitally at scale.

Why EDI Capability Matters for Suppliers

For many suppliers, becoming EDI capable is the first major step toward digital maturity. Large retailers often won’t even onboard suppliers who aren’t EDI capable. 

Being EDI capable tells retailers, “We’re ready to integrate and move fast.” It’s a business credential that signals reliability, professionalism, and digital readiness.

The Hidden Cost of Being Partially Capable

Many suppliers assume they’re “EDI capable” because they pay for EDI software. But if someone on your team still copies order data into your ERP or manually reconciles invoices, you’re only halfway there.

That gap between file exchange and system integration adds cost, creates errors, and limits your ability to scale. True EDI capability means your order data flows automatically across systems, so your people can focus on growing the business, not managing paperwork.

How to Become EDI Capable 

The good news: becoming EDI capable isn’t as complicated as it sounds. It’s less about buying software and more about getting your systems and processes ready for automation.

1. Assess Your Data and Process Readiness

Start with your own systems. Ask yourself:

• Can your ERP or accounting system import and export order data in structured formats (like CSV, XML, or API)?

• Are your product codes, SKUs, and pricing consistent across all systems?

• Do you have one “source of truth” for customer, product, and inventory data?

If the answer to any of these is “not yet,” that’s where to start. EDI depends on clean, consistent data. It only works when both parties interpret information the same way.

2. Automate Before You Integrate

Many suppliers rush to connect with an EDI provider before their internal processes are stable.

EDI capability begins with internal automation: consistent workflows for order creation, acknowledgment, invoicing, and fulfillment. If your team still reviews or edits every order manually, automation won’t stick.

Once your workflows are repeatable and clean, EDI integration becomes straightforward instead of stressful.

3. Choose Partners That Scale With You

Becoming EDI capable shouldn’t mean adding complexity. It should mean simplifying how you handle all B2B orders. EDI, retailer portals, and eCommerce alike.

Look for integration partners who connect with your ERP and help standardize your order data across every sales channel. The goal is beyond EDI compliance;  it’s building a foundation for long-term digital growth.

The Software Behind EDI Capability

Traditional EDI Software

Traditional EDI solutions transmit, map, and translate EDI documents into formats that both parties can understand.  They often require a higher degree of technical expertise, as the setup of document mappings and integrations with back-end systems can be complex for non-developers.

These solutions are well-suited for large enterprises with complex partner networks and high-volume transactions, but the costs and technical barriers can make them less ideal for smaller or mid-market businesses.

Modern Alternatives: Compliance + Scalability

Alternative solutions, like OrderEase, bridge between EDI solutions and a company’s business systems, such as ERPs and e-commerce platforms.

These platforms focus on streamlining integration by automating workflows across multiple systems, without the need for deep technical knowledge. Modern EDI solutions typically offer more flexibility, allowing businesses to connect not only with trading partners using EDI but also with various other cloud-based tools and digital platforms. 

OrderEase simplifies the complexities of EDI standards by providing a centralized platform that integrates seamlessly with both trading partners and internal systems. With pre-configured EDI connections and automated workflows, businesses can easily comply with retailer-specific requirements without needing specialized expertise.

Unlike traditional EDI tools, OrderEase integrates EDI with other sales channels, including e-commerce platforms and wholesale B2B apps, allowing businesses to manage all operations from one place. 

The Future of EDI Capability

Modern suppliers are integrating EDI directly with their ERP or accounting systems and extending that same automation to eCommerce and marketplace orders. APIs, cloud integrations, and real-time data are merging with traditional EDI to form hybrid, scalable workflows.

The next generation of EDI capability isn’t about how you send files, it’s about standardizing every B2B order across channels and systems. That’s how suppliers create a single source of truth for their entire order ecosystem.

In other words, being EDI capable today is about interoperability, not infrastructure.

FAQs About EDI Capability

What does EDI capable mean?

It means your systems can automatically send, receive, and process EDI documents in the correct format for each trading partner—without manual data entry.

Do I need special software to be EDI capable?

Not necessarily. Many businesses connect their existing ERP or accounting system to an EDI platform or integration partner that manages the exchange for them.

How long does it take to become EDI capable?

It depends on your system readiness. With standardized data and clean workflows, many suppliers can achieve EDI capability in a matter of weeks.

Is being EDI capable expensive?

No. The cost depends on your document volume and trading partners, but modern integration platforms have made EDI capability far more affordable and scalable.