Good artwork is an important part of the digitizing process. The better the artwork, the easier and faster the digitizing will be. Always scale artwork before digitizing as this will affect your choice of stitch type.

Following are some quick notes that will help you in choosing and working with artwork for embroidery.

Bad artwork

A pencil sketch on a napkin
Artwork that has been sent through a fax machine
Artwork that is very busy with lots of detail and small areas
Artwork that contains extremely small letters

Good Artwork

Clean and clear simple images without a lot of detail
Bitmap images without a lot of jagged edges (pixilated)
Black and white line art
Vector artwork (like .dxf files)

Bitmap Images

Have the bitmap the same scale as the finished embroidery design.
Increase your DPI (Dots Per Inch) when scanning, if you are going to enlarge the bitmap so your design will be clearer when zooming in.
If you are going to use the Auto Trace feature in the Wilcom software, make sure the bitmap is not dithered (colors are solid, not full of shades of color).
If you are going to use the Smart Design or Point and Stitch tools then you will need to process your bitmap first. Until you have either reduced colors or sharpened the edges then these tools will be unavailable and dimmed out.

Vector Graphics

Vector files can be resized very successfully in Wilcom software.
Vectors have clean smooth edges, even when you zoom in closely.
Vector files are an ideal format to work with when digitizing on screen.

Source: embroiderystartup.com