• Your current way of sending/receiving documents has problems with data entry errors, reduced efficiency, lot of time spent by resources, unreliable quality of data
• Automating your order-to-cash cycle with Electronic Data Interchange (EDI) can help combat above problems and make your internal processes efficient
• EDI is not a financial burden but a long-term investment for your business growth

In order for you to understand what does EDI mean in business, you need to understand how does a business operate without an EDI system first.

Here is a comprehensive video about the how does your business process currently looks like without EDI and what happens when you have an EDI system

You used to or currently send documents/information manually to your customers via email, phone, fax or mail by printing the document from your computer.

Your customer(s) then receives this information and enters the same on their computer system. It is a simple process that involves people to send and receive both sides.

Where is the problem?

There is an increased probability of:

• Data entry errors
• Time spent on manually sending, receiving and processing the data
• Spending a lot of money on paper and human resources
• Reduced efficiency, poor and unreliable quality of data

How does Electronic Data Interchange (EDI) help in combating the above problems?

The answer is by ELECTRONICALLY sending and receiving the business documents between and within businesses and organizations in a standardized manner from one computer system to the other with no paper involved.

Incorporating EDI (Electronic Data Interchange) as a part of your overall IT stack replaces paper completely and makes your order-to-cash cycle seamless.

There are set standards that specify the formats, character sets, and data elements used in the exchange of business documents and forms. Both parties must adhere to the same set of rules.

Benefits of EDI

Here is a common EDI Example

We break it down for you step by step:

1.  A Purchase Order (EDI 850) is sent by Retailer/Buyer looking to purchase a product from you. This document will state which item(s) they are looking to purchase, where the product will be shipped too, pricing etc.

2. You will send a Purchase Order Acknowledgement(EDI 855) to your Retailer/Buyer in return. This will let the Retailer/Buyer know when you are able to ship the Items on the original Purchase Order.

3. If the retailer/buyer needs to request any change from the original purchase order like increasing/decreasing the quantity of an item or change shipping information etc., then they will send a Purchase Order Change (EDI 860) to inform you of the same.

4. You will then send an Advance Shipping Notice (EDI 856) to the retailer/buyer when the shipment is ready to be shipped. This would include where the product is being shipped too, quantity, tracking numbers, etc…

5. The last step is sending an invoice (EDI 810) to the retailer/buyer asking for your payment for the shipment.