Question

The Electronic Claim Electronic Data Interchange questions:

1. What is Electronic Data Interchange (EDI)?
2. Give Two good reasons for this (EDI) transaction?
3. What is a Clearinghouse?

Answer 1

Answer: As at present due to advanced technology, the data exchange has become more easier as compared to the earlier era. The exchange or the transfer of the business (formal) information electronically by using a standardized format is known as Electronic Data Interchange. The information is exchanged electronically rather than on paper. This allows one company to send data or the information to the another electronically which is time-saving as well as cost-effective.

The reasons that EDI transaction is good as the paperwork takes much time and it is costly whereas transaction through EDI does not take maximum time as it is the time-saving process. Everything is electronically transferred along with the proof. And one can easily access all the information through the mail on the cell phone or the computer as it gets stored automatically.

A clearinghouse is a kind of financial institution which is mainly formed to facilitate the payments clearance, securities, and transaction. The financial institution collects, analyze, evaluate and distributes specialized information.