The EDI invoicing system is designed for companies that process large quantities of invoices. It’s a fast, efficient system that streamlines commercial transactions. But what is an EDI invoice and how is it different from an electronic invoice? How do you issue an EDI invoice? In this article, we explain what you need to know about EDI invoices: what they are, how to send them, their advantages, and much more.

What’s in this article?

• What is EDI?
  
• What is an EDI invoice?
  
• What’s the difference between an EDI invoice and a standard electronic invoice?
  
• How EDI invoicing works
  
• Information required on an EDI invoice
  
• Pros and cons of EDI invoices
  

What is EDI?

EDI—an abbreviation of the French phrase for “digital data exchange” (échange de données informatisés)—is the automatic transfer of commercial documents (e.g., invoices, quotes, credit notes, and purchase orders) between two businesses. The exchange is made electronically between the companies’ information systems, without human intervention.

EDI is primarily used in certain industries (e.g., food processing, automotive, and distribution). It allows businesses to process large volumes of documents.

What is an EDI invoice?

An EDI invoice is a digital invoice issued in the form of a structured message sent from one computer to another via an EDI system. The placement and order of the information is laid out in a standardized format that allows the invoices to be processed automatically, eliminating human error, and streamlining the invoicing process from end to end.

To meet the standard format, an EDI invoice must ensure:

• The issuer’s identity and authenticity
  
• The accuracy of the information
  
• Readability by a computer
  

Is EDI invoicing mandatory?

EDI invoicing is not mandatory, but it’s often preferred by companies for its ability to handle large volumes of B2B invoices with maximum efficiency. A business partner might ask you to send your invoices in EDI format.

What’s the difference between an EDI invoice and a standard electronic invoice?

EDI invoices differ from traditional electronic invoices in format, transmission methods, and optional nature.

Format

EDI formats (such as EDIFACT and Odette) are suited to the needs of businesses but do not yet meet the requirements of the electronic invoicing reform. Instead, the government has chosen other formats, including Factur-X, CII, and UBL, for the reform.

Transmission methods

Starting in 2026 or 2027 (depending on the size of the company), all electronic invoices must be sent through an approved platform, or PA (previously called a PDP—partner dematerialization platform). However, EDI invoices can continue to be sent directly via private networks.

Optional nature

As mentioned, EDI invoicing is not yet required by law. However, electronic invoicing will gradually become mandatory for all B2B transactions subject to value-added tax (VAT).

Stripe’s partner app, Billit, lets you send electronic invoices directly from Stripe, securely and without writing a single line of code. You can download Billit from the Stripe App Marketplace.

How EDI invoicing works

EDI invoicing takes place in several stages.

• Mutual consent: Both businesses must agree to use an EDI system to send invoices. They must then agree on which format and standard to use.
  
• Data preparation: To create an invoice, the system extracts the necessary information from its internal database and structures the data according to the standard the parties have chosen to use.
  
• Secure transmission: Once an invoice has been created in the standard format, a message containing the EDI invoice data is sent via a secure network.
  
• Automatic processing: The EDI system on the receiving end receives the invoice and automatically processes and uploads the data.
  

Information required on an EDI invoice

EDI invoices contain the same information required on traditional invoices. This includes identifying information for both companies (names, addresses, and tax IDs) as well as invoice details, including issue date, due date, pretax amount, VAT charge, and total amount with tax. EDI invoices also include business information such as the invoice number and payment method.

Pros and cons of EDI invoices

EDI invoicing offers businesses many advantages, including:

• Considerable time savings and optimization of commercial transactions through automation
  
• Minimization of data entry errors
  
• Reduction of administrative costs
  
• Data security
  

However, there are also some downsides to the EDI system, especially for startups and small and medium-sized enterprises (SMEs):

• The system requires a significant initial investment (of both time and money) to set up, making EDI invoicing less accessible to businesses with limited resources.
  
• To comply with the electronic invoicing reform, businesses will still need to use an approved platform that converts EDI invoices into a format recognized by the government.