How eInvoicing delivers a better procure-to-pay (P2P) experience for your suppliers

eInvoicing is strongly emerging here in Australia and New Zealand as one of the key digital transformation activities in 2022. Its dominance is being led by the Government because of its massive benefits to the economy (think $10 billion to the Australian and New Zealand economies). But that’s not its only benefit – it can deliver a much better procure-to-pay (P2P) experience for suppliers too.

What is eInvoicing?

In short, when your suppliers create an invoice in their invoicing software, it’ll almost ‘magically’ appear in your accounting software. To find out the nitty gritty, have a look at our whitepaper, an introduction to eInvoicing.

So how does it benefit your suppliers?

It’s sent directly from the supplier’s software into the customer’s software

Once your supplier enters it into their software, they can be rest assured that it’ll be delivered straight into their customer’s software. And if, for whatever reason it can’t be, the supplier will be sent a notification, so they’re always in the loop. This means their invoice will be received in record time, and the payment process can begin. Winner!

It doesn’t get lost among emails or people forgetting to forward it on

Gone are the days of emailing a PDF invoice, waiting for the person the supplier deals with to approve it, pass it onto the accounts payable team for processing and then joining the payments queue. eInvoices go straight into the customer’s software, so there’s not getting lost in emails – it joins the queue, which is often automated by the customer, to speed up the process.

Suppliers can get notified of the status of an invoice

One of the real benefits for suppliers is getting notifications of the invoice status. The eInvoicing network (Peppol here in Australia and New Zealand) has a ‘response’ message that goes back to the eInvoice sender to let them know if the eInvoice has been received (or failed or rejected for whatever reason) and can also update the supplier on things like whether it’s been approved for payment, whether it’s been paid, and more. eInvoicing has heaps of benefits for you too, not just your suppliers. You can have peace of mind invoices won’t go missing, plus you don’t have to worry about entering the data incorrectly into your software.

Ready to get yourself or your suppliers onboard to eInvoicing? Here’s how…

First, get yourself eInvoicing-enabled

You’ll need an eInvoicing service provider. This is called an ‘Access Point’. The Access Point gets the invoices into your software (and also out of your software if you’re using it for accounts receivable invoicing too). It’s your gateway to the eInvoicing network. Get in touch with us to find out what the best option is, or have a look here.

Then get your suppliers onboard

Depending on our suppliers, it could be worth breaking them down into groups to get them onboard. This is handy so that you’re not overwhelmed with the task, but also allows you to tailor your communications, depending on your suppliers. Take a look at our whitepaper, a guide to successfully onboarding trading partners to eInvoicing.

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Tips for writing a tender document to find an eInvoicing provider

Many organisations are starting to go through the process of finding an eInvoicing provider. Some, particularly larger, organisations need to go through a formal procurement process to find a supplier. Given eInvoicing is a new area for a lot of people, here are some tips to help you write your tender document.

Get to know the ins and outs of eInvoicing

The last thing you want is to be unprepared. Getting to know the basics of eInvoicing makes this process much easier. Make sure you get to know what eInvoicing is and how it works. Learn about the use cases, the benefits, what it will mean for each of your teams (like accounts payable, accounts receivable, IT and others), what it will mean for your customers and suppliers, find out how others have used it as a start.

Get to know what eInvoicing providers provide beyond just eInvoicing

Just like most industries, there are some eInvoicing providers who merely pass the invoice from A to B. But there are others who have capability to do much more. Here at MessageXchange, our powerful software can insert missing information, check the information you require is on the invoice and perform complex lookups, workflows, rules and more. This functionality is particularly useful for organisations who have complex business rules, automated payments and integrations with multiple systems.

Have a clear view of how eInvoicing will fit into your architecture and processes

For smaller organisations, it can be as simple as eInvoices coming in and out of your software. Even in this simple case, you’ll need to know how they will come in and out – through an API, can it drop and pickup files from an SFTP folder or does it need to use another method – and what format they will come in and out in – will it be an XML format, a CSV or something else? For larger organisations, accounts receivable invoices may come out of one system and accounts payable invoices may go into another. You may have a single integration point for any data coming from the outside world, rather than connect to your systems directly. Be very clear on what this process will look like for your company. On the accounts payable side, many organisations have automated matching against an order, or checking the vendor number or ABN or other data. Make sure you know how eInvoices will fit into this process.

Get familiar with your company’s IT policies for external vendors

Some companies require IT vendors to have backup, redundancy and service SLAs. Make sure you’re familiar with what your company requires so you can be clear about this in your tender.

Start writing!

  • Document your setup and key information like:
    • The software you use (and go into detail if your setup isn’t straightforward, for example if you have multiple systems)
    • Whether you want to send and/or receive eInvoices
    • How many eInvoices you expect to send and/or receive
  • Break it down into sections. Example:
    • Company information
    • Technical requirements
    • Business process requirements
    • Procurement requirements
    • Contract
    • Pricing
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Don’t think you’re ready to use eInvoicing? It’s not as difficult as you might think

eInvoicing is gaining momentum with all the benefits it is bringing to businesses around the world. But change is difficult and implementing eInvoicing can seem more daunting than it should be. We’re clearing the air and are here to show just how easy implementing eInvoicing can be.

Get started with a web portal

Did you know you don’t need to spend time and resources integrating eInvoicing into your software? If you’re looking for something quick and easy, all you need is internet access – and if you’re reading this, you’ve got that. Basically, you can login to a web portal like Colladium to send and receive eInvoices using an easy-to-use interface. It’s one of the simplest and most cost-effective options to start eInvoicing. Colladium only takes minutes to sign up and it’s free to use. All you need to do is register and get started!

Plug and play software integrations

Your existing software might have some plug-and-play style integrations to start eInvoicing. These allow you to send and receive eInvoices using your own software, and setup is quick and easy. MessageXchange has an easy option for MYOB Account Right and New Essentials users. Send invoices directly to your customers’ software and receive bills directly into your In Tray. Plus, Technology One Ci Anywhere and Oracle Financials Cloud users can take advantage of our eInvoicing Connect product to start receiving eInvoices in just days.

Ask your existing Invoicing/ERP software provider

You may not know it, but your current software may be eInvoicing capable. You should ask your provider if eInvoicing is already enabled or whether they plan to make it available.

Find an eInvoicing service provider

If you’re working with software that isn’t enabled for eInvoicing you can get easily set up with an eInvoicing service provider, like MessageXchange. We’re able to help you send and receive eInvoices directly from your software. Even if your software doesn’t export or import the Peppol standard file we can translate the files to whatever your software needs. Want to get started with eInvoicing? Get in touch with our eInvoicing experts by filling the form below.

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How to use EDI with Xero

If you use Xero and you’ve been asked to use EDI, your head might be in a bit of a spin. It can seem complicated but there’s no need to worry – there are options and they’re not as complex as you might think. Many retailers require a combination of these documents:
  • Purchase order
  • Purchase order response
  • Advanced shipping notice
  • Invoice.
And you might be thinking, Xero doesn’t even have all of these. You’re right, Xero doesn’t support sales orders or advanced shipping notices. But that’s not a showstopper.

An EDI web portal is the simplest option

Many Xero users choose to use an EDI web portal. It’s a website you can login to, to view orders and respond to them with the response, advanced shipping notice and invoice. It’s simple to use, inexpensive and gets you compliant with your customer’s requirement. Here at MessageXchange, our EDI web portal is called FormXchange. If you choose to go with our FormXchange product, you can even automate the process one step further. By turning on the integration between FormXchange and Xero, you can sync the invoices you enter in the EDI portal (FormXchange) directly to Xero, so your invoices are always up-to-date in your accounting software. That means whenever you send an invoice to your customer on FormXchange, a copy will go to them, as well as to your Xero account. It’s that simple.

Who can you trade with on FormXchange?

Trade with any of these retailers on FormXchange:
  • Australian Pharmaceutical Industries (API)
  • Aldi
  • Anaconda
  • Big W
  • Bing Lee
  • Bunnings
  • Chemist Warehouse
  • Coles
  • Costco
  • David Jones
  • Drakes
  • Harris Scarfe
  • Harvey Norman
  • Kmart
  • Metcash
  • Myer
  • Officeworks
  • Petbarn
  • PFD Foods
  • Reece
  • Repco
  • Sigma
  • Spotlight
  • Symbion
  • Target
  • The Good Guys
  • Winning Appliances
  • Woolworths

How do you get started?

It’s pretty easy:
  1. Head to messagexchange.com and click register
  2. Enter your details, choose FormXchange as your service and select the retailers you wish to trade with
  3. You’ll receive a verification email so just click the link in there to verify your account
  4. Let your customer(s) know that you’re using MessageXchange as your EDI service provider (they might refer to it as a ‘VAN’ or value added network)
  5. Then once you receive your first order, follow the prompts on screen to respond to it. You can also look at our knowledge base here to walk through the entire process in detail.
If you have any questions or need help getting started, just get in touch!

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Top 5 EDI questions answered

There are some questions that seem to come up in most calls. Have a look below to find out the answers to the most frequent EDI questions we receive.

1. What types of EDI solutions are available for me?

There are two main types of EDI that are available:

Integrated EDI (EDI Gateway)

An integrated solution allows you to exchange EDI messages directly from your software. When an order is sent to you, it’ll go to your VAN (value added network) then straight into your software. There’s no need to re-key it or anything. Then when you create the order confirmation, despatch advice or invoice, it will go directly from your software to your VAN and onto your customer. This option has the least impact on your current process and requires minimal manual processing.

Web portal/EDI Webforms

The simplest solution for EDI compliance is a webform solution. This allows you to logon to a web portal to view purchase orders and respond by sending back the required information such as purchase order responses, advance shipping notices and invoices. The information input into the web portal is sent directly to your customers’ software.

2. How much does EDI cost?

The cost will depend on the product you go with:

EDI Gateway

The price to setup an EDI Gateway is determined on a few factors, including how many customers you trade with, your customers’ testing requirements, the complexity of your setup and more. After implementation, our pricing is based on your data consumption (file size) so you only pay for what you use.

EDI Webforms

There’s no setup fee to use our EDI Webforms (which we sometimes call FormXchange). You can get started from just $99 a month, which allows you to exchange as many messages as you like with one of your customers. Plus you can add an additional trading partner for just $49 a month.

3. How long does it take to implement EDI?

The implementation time varies with every solution.

EDI Gateway

The implementation time varies depending on your requirements, complexities, the amount of testing you require, the amount of testing your trading partners require, your availability and more. It can take anywhere from a day or two, through to a month or more to get started.

EDI Webforms

For EDI Webforms, you simply register on the platform and you’re good to go. Some retailers require you to go through a testing and accreditation process, but our team are here to help you through that.

4. What does my customer mean by ‘accreditation testing’?

Accreditation requires you to test your EDI messages before they’re sent to your retailers’ production systems. This just makes it more likely that you won’t have issues when you’re sending and receiving EDI messages. The testing checks your files and ensures fields are correctly formatted.

5. Do l have to make changes to my ERP system to get the EDI message?

No, you shouldn’t need to – as long as your software can export and import files, your EDI provider will do a lot of the work connecting to your ERP system and mapping, or translating, the files to EDI messages. However, if your ERP software doesn’t handle certain EDI messages, like advanced shipping notices, you might need to use another bit of software to do that. We provide our EDI portal, Colladium, to our customers to help them send and receive EDI messages that might not be compatible with their ERP system.Have more questions? Ask our experts by getting in touch below.

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How leading organisations are managing the transition to eInvoicing

The Government mandate for commonwealth agencies to be eInvoicing enabled was introduced a year ago now. Since then, as an Access Point provider, we’ve seen agencies scramble to get on board and businesses are starting to follow suit. For many, it’s a completely new concept. Their people have needed to get up to speed, their invoicing software hasn’t always been ready, and they’ve had to engage their customers and suppliers to get onboarded. As an Access Point provider, we’ve been privy to how leading organisations have managed the transition to eInvoicing. Here’s how.

Educating themselves about eInvoicing

Getting your head around eInvoicing – what it is and what it means for your business – is one of the most important steps. It’s a new concept for a lot of people, but there are some fantastic resources out there. The Australian Taxation Office (ATO) and New Zealand’s Ministry of Business, Innovation and Employment (MBIE), as the Peppol authorities, have some great information aimed at businesses and Government explaining eInvoicing and its benefits: Plus, companies who provide eInvoicing services, like us, generally have information available to help you through the process. Here are a couple of our resources: We’ve found that the organisations who educate themselves well on the concept of eInvoicing and what it means to their business, are better-equipped to implement eInvoicing as seamlessly as possible.

Getting internal teams on board

You might be the one in charge of implementing eInvoicing, but there’s no doubt that it involves a number of teams from IT to accounts payable and accounts receivable and beyond. It’s important you get all the relevant teams involved to make sure their needs are met, so they know how it will impact them and so they can answer any questions they get from others internally or even customers and suppliers. Here are a couple of resources that might help:

Integrating eInvoicing into their invoicing software

The first adopters of eInvoicing here in Australia has been Government agencies. With the mandate in place and a fast-approaching deadline, we’ve seen a number of approaches to get themselves up and running.

Taking a staged approach to implementing eInvoicing

Many of the successful organisations have taken a staged approach to eInvoicing. Some examples we’ve seen are: governments implementing eInvoicing with one agency first then rolling it out to others, starting with a pilot group of suppliers first then rolling out to others, and we’ve even seen some have their MessageXchange Gateway transform eInvoices to suit their software’s current abilities until their software is upgraded.

Using an eInvoicing portal

Another approach when eInvoicing is time-critical is to start with a web portal separate to your eInvoicing software. This is often a good interim step for when you’re only dealing with a small number of eInvoices. Our partner, Colladium, allows organisations to get setup in just minutes and supports both the sending and receiving of eInvoices. Check it out today.

Onboarding their suppliers and customers

Even the most advanced organisations have struggled when it comes to onboarding customers and suppliers. The main reason is that eInvoicing was still in its infancy. We’ve come a long way since then though. Now there are a number of software packages that have eInvoicing built into them. Xero and MYOB, who cover a majority of Australian and New Zealand SMEs, allow their customers to send eInvoices free or at a low cost. The most successful organisations who’ve onboarded their suppliers have been very clear with how the supplier can get eInvoicing ready. They hold webinars, send instructions and make it as easy as possible for suppliers. Many also offer incentives, like five-day payment terms, which is a sweetener for suppliers to get on board. We’re lucky to have been chosen as the eInvoicing Access Point for a large number of organisations and we’ve been privy to how they’ve gone about implementing eInvoicing. If you’re looking to get ready for eInvoicing, have a chat to our team today using the form below.

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How to use eInvoicing when your software isn’t capable

eInvoicing may be a relatively new concept for a lot of businesses. Government has led the way on its adoption, but the real benefits are going to be for businesses. In fact, the ATO has estimated that one eInvoice can be processed for up to $20 less than a paper invoice. And if we look at the accumulated costs, this could give an economic benefit of $28 billion over ten years. There’s little wonder we’re seeing interest now from businesses. The ability to create invoices in your accounting software is usually there off the shelf. But that’s not always the case for eInvoicing. If it’s not, there’s no need to stress. This is where we come in. Just a side note – if you’re not yet familiar with how eInvoicing works, check out our whitepaper, an introduction to eInvoicing, here. It explains the whole thing in layman’s terms.

Importing and exporting data from your software

Most software can import and export data. And that’s all we need. You might already be using this sort of functionality today – exporting data in a CSV or XML format to load into other software, to change the data in bulk, or to make some pretty graphs in Excel. If you want to automate the export and import, most software is capable of this too. This means it’ll be done without anyone physically pressing buttons – it’s a task that will run on schedule. Just chat to your software consultant or IT team about this. It should be pretty straightforward though.

Converting your exported file to the Peppol eInvoicing format

As we mentioned above, your software might export a CSV or XML file, or perhaps something else. Unless your software has some sort of eInvoicing capability build in, it’s unlikely to handle the format required by the eInvoicing network (the format is called a UBL, by the way). It’s fine if your software doesn’t though – MessageXchange can convert your file, whatever that might be, to and from the Peppol UBL.

Getting the data to your Access Point

So, your software can import and export invoice files. Now we need to exchange them. The simplest way to get them to MessageXchange will be through an sFTP folder. We mentioned this at the end of the importing an exporting data from your software section. Your IT team can drop your exported files into an sFTP folder, and for incoming eInvoices, they can pick them up and import them into your software. It’s a pretty basic process. If sFTP doesn’t work for you, there are also other options like API, AS2 and more.

Following the same approvals process in your accounts payable software

Many businesses, particularly larger ones, have automated processes in place for approving invoices. If you’re looking to use eInvoicing for accounts payable invoices, there doesn’t need to be any changes to your approvals processes. Just like regular invoices start the process when they’re entered or scanned into your software.

Catering for business rules in your accounts payable software

Some software or approvals processes require certain information on invoices like purchase order number or bank details. MessageXchange’s sophisticated software can cater for this. We can make sure invoices have this information on them before they’re imported into your software. If they don’t meet your criteria, MessageXchange can reject them and notify your supplier. Our software can also check for duplicate invoices, to ensure it doesn’t already exist before it’s ingested, to make sure you don’t pay it twice.

And if all else fails, use a web portal

We’ve seen organisations who need to get eInvoicing-enabled quickly turn to a web portal. This is often a good interim step for when you’re only dealing with a small number of eInvoices. Our partner, Colladium, allows organisations to get setup in just minutes and supports both the sending and receiving of eInvoices. Check it out today. Interested in learning more about how you can get eInvoicing ready? Have a chat to our team today by filling in the form below.

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EDI messaging standards and formats

If you’re new to EDI, you might be a bit overwhelmed with all the new terms, acronyms and the like. You’ve probably come across EDI standards, like EDIFACT or EANCOM, and have no idea what they mean. Well, you’re in the right place. In this blog, we’ve put together some information around EDI, its different message standards and the ones that are commonly used in Australia.

What are EDI messages?

In simple words, EDI messages are business documents, often procurement-related, exchanged between companies’ software, perhaps through EDI provider(s) in the middle. These documents are often exchanged in a standardised format to make it easier to communicate with all of your trading partners. These messages can be purchase orders, despatch advices, invoices and more.

Why use standards?

EDI message standards define the rules and requirements for the structure and format of an EDI message. These standards are defined by various organisations like GS1 and Peppol. Organisations choose to exchange data in a standard format because it makes it much easier for their trading partners to get on board. If everyone exchanged a different file format, onboarding one trading partner to EDI would be like starting from scratch every time.

What are the different EDI message standards and what EDI message standards are commonly used in Australia?

There are different EDI message standards used around the world. Some of the most popular ones are UN/EDIFACT, ANSI X.12, EANCOM, ODETTE, ebXML, TRADACOMS, HIPAA, and SWIFT.[vc_column width="1/4" css=".vc_custom_1618271818355{padding-right: 10px !important;}"]

UN/EDIFACT

ANSI X.12

EANCOM

ODETTE

EbXML

TRADACOMS

HIPAA

SWIFT

[vc_column width="3/4" css=".vc_custom_1618271827363{padding-left: 10px !important;}"]

Standard coined by the United Nations and the most commonly used worldwide.

Commonly used in North America

Commonly used in the European retail industry

Commonly used in the European automotive industry

Global standard developed by United Nations body for Trade Facilitation and Electronic Business Information Standards (UN/CEFACT) and Organization for the Advancement of Structured Information Standards (OASIS ).

Commonly used in the UK retail industry

Commonly used in the North American Healthcare industry

Commonly used by financial institutions worldwide.

Out of the many EDI standards, the ones that are commonly used in Australia are UN/EDIFACT, ANSI.X12 and GS1 XML. Let’s have a look:[vc_column width="2/4" css=".vc_custom_1618271818355{padding-right: 10px !important;}"]

Transaction

Purchase order

Purchase order response

Invoice

Despatch advice

Remittance advice

Product catalog

Functional acknowledgement

[vc_column width="1/4" css=".vc_custom_1646013227774{padding-right: 10px !important;padding-left: 10px !important;}"]

UN/EDIFACT

ORDERS

ORDRSP

INVOIC

DESADV

REMADV

PRICAT

CONTRL

[vc_column width="1/4" css=".vc_custom_1646013158821{padding-left: 10px !important;}"]

ANSI X.12

850

855

810

856

820

832

997

What to do if your software doesn't exchange these standards?

Don’t worry – this isn’t uncommon. If your software doesn’t produce these standards, we can help you map them. This means we’ll translate files produced by your software to the standard required, mediating between message standards and protocols and aligning business processes.

Industry-specific:

Retail (supply chain)

The retail industry in Australia has taken advantage of the benefits of EDI over the last 30 years. The industry uses EDI for procurement as well as shipping and logistics. UN/EDIFACT dominate the as the standard used in the retail sector. If you’re interested to read more about EDI in the Australian retail industry, click here.

Transport and logistics

The Australian Logistics Council and GS1 Australia developed the Australian Freight Labelling and EDI standards in 2016. The GS1 Open Global supply chain standard requires each shipment label to have a ‘license plate’ known as the SSCC code. SSCC - serial shipping container code - is a common identification among the buyers and suppliers of the transport and logistics industry in Australia. In addition to the common EDI messages like the purchase order, purchase order response, invoice, this sector uses EDI to share information about booking as well as tracking details. The transport and logistic industry commonly uses GS1 XML standard to exchange EDI documents.

Finance

The finance industry uses EDI to transfer payments, information related to payments and other financial documents. ISO20022 is the format used by MessageXchange for our customers in the finance industry. ISO20022 is an internationally-recognised standard developed by ISO. It is used for the development of financial EDI messages in the payments, securities, cards, trade services and foreign exchange business domains.If you want to learn more about EDI for your business, request a call back from our EDI experts below.

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EDI Glossary

EDI has a lot of jargon and it can be hard to understand. We’ve put together some of the key words to help make it easier for you.

Advance Shipping Notice (ASN)

This message tells a buyer when the goods will be shipped, how they’ve been packed and the estimated arrival date. This can also referred to as a Delivery Notice or Despatch Advice.

EDIFACT

This stands for Electronic Data Interchange For Administration, Commerce and Transport. It’s an international EDI standard that was developed by the United Nations. Types of EDIFACT messages include 96A and D01B. They’re commonly used in the retail industry here in Australia.

Translation

The conversion from one file format to another.

ERP system

Also known as an Enterprise Resource Planning system. This software is used by companies to manage much of their business activity – they’re like an accounting package on steroids. Examples of ERP systems include SAP, Oracle, Pronto, JD Edwards and Sage.

Gateway

A Gateway is the central point that enables the exchange of messages between systems (often provided by a value added network, or a VAN). It mediates the differences between your software and those of your trading partners. If you think of a hub and spoke model, the Gateway is the hub, and you and your trading partners are the spokes. Through MessageXchange, Gateways can be configured per customer to have specific business rules, mappings, error handling and more.

GLN

A Global Location Number (GLN) is a unique number that is assigned to locations to enable them to be identified worldwide. These global location numbers can be used to identify any legal, physical and functional locations. They’re issued by the standards body GS1. GLNs are also used in the EDI to identify a business to exchange messages with.

GS1

GS1 is a worldwide not-for-profit that encourages the use of standards in business to create efficiency in supply chains and overall business. GS1 develops and publishes standards for barcodes, product data and EDI. They’re the organisation that issue GLNs and GTINs.

GTIN

This stands for Global Trade Item Number. It’s a unique identifier for each product. If you look at a barcode, they’re often GTINs. Here in Australia, they’re issued starting with a 93 or 94.

iDoc

iDoc stands for intermediate document. It’s a data structure for electronic data interchange between application programs written for the popular SAP business system or between an SAP application and an external program.

Mapping

Mapping refers to translating, or converting, one file format to another. For example, if your software outputs a CSV file and your trading partner requires an EDIFACT file, your EDI VAN would ‘map’ the CSV file to EDIFACT.

Message type

An structured set of data covering the requirements for a specified type of transaction, for example, an invoice or purchase order.

MIG

A MIG, or message implementation guide, details the file structure that your trading partner requires. A MIG is usually written for each message type required by that trading partner. You can see examples of MIGs on our website: home.messagexchange.com/resources/migs/

Network service provider

A company that maintains an EDI network on behalf of businesses, also known as a value added network. They offer its services and capabilities to others for a fee.

SFTP

Secure file transfer protocol. A network protocol that provides file transfer over the web securely using authentication and encryption.

SSCC (serial shipping container code)

An 18-digit number that is used to identify logistics units. It allows whoever it is receiving the goods to track them throughout the journey, and gives them more insight into what’s inside a shipping unit.

SSCC label

The label is linked to the ASN. The label has one or more barcodes on it, which includes the SSCC number. Often in retail, these are scanned when receiving the goods to mark them as received in the retailer’s software and to identify exactly what’s in the package.

Transmission protocol

Transmission protocol refers to how your messages will get from your software to your VAN. Some examples include sFTP or AS2. Choosing your transmission protocol largely depends on the level of security required as well as the need for timely, real-time information.

VAN

VAN is the acronym for Value Added Network; they’re the company that provides an EDI service. VANs enable your EDI capability to be scalable because they sit at the core of your trading network and enable the routing of messages, which reduces the impact of change. At MessageXchange we combine the VAN capability with Gateway capability so message routing can be combined with message mapping, business rules business intelligence reporting, custom error handling, notifications and the top level of security.

Web-based EDI

A method of EDI that allows users to send and receive EDI from an internet browser portal. It does involve manual inputting of information.

XML

The abbreviation for extensible markup language – it is a file format commonly used by software to export and/or import data. If you want to learn more about EDI for your business, request a call back from our EDI experts below.

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eInvoicing Glossary

If you’re just getting started, eInvoicing jargon can be hard to understand. So we’ve put together some of the key words to help make it easier for you.

ABN

This stands for Australian business number. It’s a unique number that identifies a business in Australia. It helps identify your business to others when ordering and invoicing. And in the eInvoicing world, it’s a number you can send and/or receive eInvoices from/to.

Access Point

eInvoicing is done through a four-corner model. You can think of it like a phone network, where your network service provider, and the service provider of the person you’re trying to call, are the Access Points. Access Point are the service providers that connect to each other.

API

This stands for application programming interface. It’s a messaging protocol. An API is a way for others to push information to you, or retrieve information from you. And by you, I mean your software.

AS4

This stands for applicability statement 4. It’s a messaging protocol. AS4 can exchange messages in near-real time and supports the ability to send back delivery notifications, so the sender knows their message has been received. It’s considered highly secure and has high availability, meaning it’s always active to be used.

B2G

Stands for business-to-government. it refers to business that’s conducted between a business and government Business level response (BLR) A business level response can be sent from a company to their supplier once they receive an invoice. It can give the supplier an update on the invoice, like whether it’s been accepted, rejected, paid, queried, or something else.

CSV

This stands for comma separated values. It’s a file format. Think of it like very simple Excel spreadsheet. In fact, you can open these files in Excel.

Electronic data interchange (EDI)

Electronic Data Interchange (EDI) refers to the structured transmission of data between organisations electronically. It’s used to transfer documents electronically from one system to another i.e. from one trading partner to another trading partner.

eInvoicing

It’s the exchange of eInvoices in a structured, electronic format. It’s not be confused with sending a PDF invoice. PDFs aren’t machine-readable. eInvoices are sent directly from one software package to another.

ERP system

This stands for enterprise resource planning system. In simple terms, it’s what most businesses use to manage their accounts payable and receivables. Generally, ERP systems are a little more complex than your typical accounting package. Think of SAP, Oracle, Pronto and more.

File format

This refers to the way information in a document is stored and organised. PDF, JPG and PNG are all file formats. When it comes to eInvoicing, file formats are relevant because your software will export and import a certain type of file format. You might also see the acronym UBL used a bit. That’s the file format, or standard, used for eInvoices when they’re sent between Access Points. It’s not an issue if your software doesn’t export and import a UBL file – a well-rounded eInvoicing provider will be able to map your file format to and from the UBL format for you.

Four corner model

eInvoicing happens through a four-corner model, where corners one and four are the supplier and customer, and corners two and three are Access Points. Access Points connect to each other to exchange eInvoices.

Gateway

Our customers will generally have their own ‘gateway’ on the MessageXchange service. All of your business’ requirements are setup in your gateway, like mappings, reports and more. Your software connects to your gateway, and your gateway connects to the outside world. All eInvoices you send or receive will go through your gateway.

GLN

This stands for global location number. They’re a unique number given to a location, usually a business address, to identify it. They’re heavily used in electronic data interchange (or EDI) trade. GLNs are issued by your local GS1 organisation.

Interoperability

The ability of diverse systems and companies to work together.

Mapping

Mapping refers to translating, or converting, one file format to another. For example, if your software outputs a file format that isn’t the Peppol standard, UBL, your eInvoicing service provider may be able to ‘map’ the file so it conforms.

Message level response (MLR)

Whereas a business level response (BLR) is issued once a business receives the invoice and is, or is about to process it, a message level response is often issued before it can even get to the recipient. The Peppol standard has certain requirements, and if these aren’t met, an invoice may be rejected. A message level response lets the sender of an eInvoice know if the message has been rejected because of an error within the message. One example is that the syntax is incorrect.

MessageXchange

MessageXchange is an eInvoicing service provider. Find out more at messagexchange.com

Messaging protocol

In simple terms, a messaging protocol is a way to get files, or messages, from A to B; from software to software. Think of it like transport. If you wanted to get from Sydney to Melbourne, you can fly, drive, take a bus or a train. Each have their pros and cons. Just like each messaging protocol have their benefits. Some examples of messaging protocols are sFTP, API and AS4. The messaging protocol a company chooses to use will largely depend on what their software is capable of using, how much the company would like to invest in it, what level of security they need and the features they need, for example whether they need to exchange messages in near-real time or not.

NZBN

This stands for New Zealand business number. It’s a unique number that identifies a business in New Zealand. And in the eInvoicing world, it’s a number you can send and/or receive eInvoices from/to. An NZBN is in fact the same as a GLN.

Order-to-pay

The combined end-to-end trade process from the buyer’s perspective (order, delivery, invoice and payment).

Peppol

Peppol stands for Pan-European Public Procurement On-Line. It’s a standard of e-procurement, which we use in Australia and New Zealand to exchange eInvoices. When we say ‘standard’, it stipulates how Access Points should connect with each other, the file format invoices should be sent in and more. Having one standard makes it easier for businesses to trade with multiple organisations, because they can connect once and exchange eInvoices with anyone else in the Peppol network.

Purchase order

Document sent by a buyer to a supplier to inform them that they wish to purchase goods, services or works.

Service provider

A service provider that connects to a supplier and buyer directly. The supplier connects to the service provider which enables them to connect to multiple buyers and/or suppliers. Think of it like a phone service provider like Telstra or Optus, but this service provider is for eInvoicing.

sFTP

This stands for SSH (or secure) file transfer protocol. It’s a messaging protocol. You can think of it like a mail box; files are dropped into an sFTP folder (think of a folder on your desktop), often in batches, and they’re picked up by whoever is receiving the files. All of this is usually done automatically by having a process run periodically in the background. As you can probably tell, sFTP transfer is doesn’t support real-time messaging. But, it is one of the cheapest and easiest messaging protocols to use.

SML

This stands for service metadata lookup. Sounds complicated, I know. But think of it like a phone book of sorts. Access Points use the SML when they receive an eInvoice, to look up where it should go. The SML lists ABNs, NZBNs, GLNs that have registered for eInvoicing, as well as the Access Point provider that company uses. Have a look at the diagram on page 3 to see how it fits in.

SMP

This stands for service metadata publisher. Once an Access Point gets the information needed from the SML, it then asks the relevant SMP what documents that company can receive. If the company has registered to receive that type of document, the Access Point will send it on. Have a look at the diagram on page 3 to see how it fits in.

Syntax

Syntax refers to the rules that define the structure of the code of a message. Without going into too much detail, some of you might have seen basic code like text here. This tells the software where the element begins, the value of an element, and where that element ends. For example, on an invoice it might look like Cupcakes. Access Points will expect a message structured in a certain way, that is, using the correct syntax. In the eInvoicing world, if the syntax is incorrect, the Access Point receiving the message should send back a message level response (MLR).

UBL

This stands for universal business language. You probably won’t need to worry too much about this if you’re not in an IT role. It’s a file format. Just like you might use a JPG, PNG or GIF image file format.

XML

This stands for extensible markup language. It’s a file format. It looks like code to us, but holds all the information in a structured, machine-readable format. If you want to learn more about eInvoicing, sign up to our newsletter to get the latest information and useful resources.

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The reasons for not being left behind in eInvoicing

eInvoicing is taking off. Businesses are realising the benefits and starting to reap the rewards. Here are some reasons to get ready sooner rather than later and not risk getting left behind.

Start seeing the benefits now

If you’re a supplier to a government agency that’s eInvoicing enabled, and have a contract less than $1 million, you have the benefit of getting paid in 5 days. Government suppliers are already enabling eInvoicing to help their cash flow through faster payment. So how much do you stand to save from implementing eInvoicing now? Sources show a paper invoice or PDF invoice costs around $30.87 and $27.67 respectively to process, and an eInvoice costs only $9.18. Say you send or receive 10 eInvoices a week, that’s a weekly saving of $184 to $217.

Be in a position to say yes to eInvoicing customers straight away

If you’re asked to issue eInvoices, you can do so straight away. You won’t need to spend time finding a solution. If you’re a supplier to a government agency, that’s eInvoicing enabled, and have a contract less than $1 million, you also have the benefit of getting paid in 5 days. Government suppliers are already enabling eInvoicing to help their cash flow through faster payment.

Get enabled before the rush

With an eInvoicing mandate set for all federal government agencies, and possibly other groups soon after, a lot of organisations will be looking to sign up. This will inevitably lead to a rush in demand and possible delays in implementation. This will also lead to suppliers getting involved in the rush. Now is a good time to get enabled if you happen to be a supplier to a government agency or a supplier to an agency.

Being prepared for the possible mandate

You might have heard about a potential eInvoicing mandate for businesses in Australia. The mandate is currently being reviewed by business leaders and industry experts. However, it’s likely to happen in some form, so getting in early will help you avoid any delays and reap the benefits sooner.

How do you get started?

eInvoicing doesn’t need to be complicated:
  1. Find out if your existing software is eInvoicing-capable
  2. If not, talk to an eInvoicing service provider like MessageXchange
    • Fill in a form with your business details and work out which products works best for you
    • Get connected to MessageXchange
    • Start exchanging eInvoices
And don’t forget, eInvoicing helps businesses:
  • Cost savings Studies have found that it costs $30.87 to process a paper invoice, $27.67 a PDF invoice, and only $9.18 to process an eInvoice.
  • Easier invoice processing Removes the need for unnecessary data entry – the invoice just appears in your software.
  • Fewer errors Because much of the data entry is removed.
  • Exchange of invoices directly to and from software To reduce the risk of invoices going astray, reduce the time to receive them and reducing data entry errors.
  • Secure Security measures, like encryption at rest and in transit, are implemented throughout the eInvoicing network so your data remains secure along the way.
If you want to learn more about implementing eInvoicing in your business, get in touch with our team.

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EDI in the retail industry

Major players in the retail industry have taken advantage of the benefits of electronic data interchange (EDI) over the last 30 years. But there are still some companies that use paper-based procurement. This shows EDI still has potential to deliver even more benefits and savings to the industry. EDI in the retail industry allows companies to electronically exchange documents like purchase orders, despatch advices, invoices and other documents with suppliers. It replaces the manual process of sending these documents via email, fax and other ways of communication. Businesses in the retail industry generally issue a high volume of orders and EDI helps to improve operational efficiency and reduce the turnaround time to process purchase orders and invoices. It also has added benefits like providing more visibility and better customer service.

How is EDI used in the retail industry?

EDI is extensively used in the retail industry. This sector uses EDI for procurement, shipping as well as invoicing. In the procurement process, two basic EDI documents are used: purchase order and purchase order response. The buyer sends the purchase order to the supplier and the supplier then sends the purchase order response back to the buyer. This tells the buyer what can be fulfilled. In the second stage, shipping, the main EDI document used is the advance shipping notice. The supplier sends the ASN to the retailer to notify them about the shipment. It tells the buyer things like what’s being sent in each package, when it’ll be sent, by whom and more. In the final stage, the supplier issues an EDI invoice and sends it to the retailer. The retailer’s accounts payable team can generate an EDI remittance advice and send it to the supplier to confirm payment.

Why is EDI important in the retail industry?

Customer demands for good quality products, competitive deals and low prices have grown enormously, but the expectation for fast delivery has increased more than ever. Retailers today struggle to keep up with the high delivery frequency and keep count of stock (SKUs). EDI helps in automating this process. EDI purchase orders enable retailers to specify store destination with quantities of each product in a single document, the supplier, on the other hand, processes these purchase orders, ships products directly to the stores and sends advance shipping notice with details of products and quantities being shipped. It is because of this EDI process that retailers are able to fast track the delivery process, have visibility of SKUs and reduce human errors and turnaround time. There are also benefits when it comes to receiving invoices. For retailers who receive thousands of invoices a month, the time it takes to enter each invoice into their accounting software can really add up. Not to mention it opens the floodgates to mistakes being made. It’s easy to do a quick calculation of what this might cost a business by multiplying the number of invoices by the time it takes to enter each one by staff members’ salary. It all adds up. Some retailers use scanning or optical character recognition (OCR) but this is usually error-prone and can chew up time just fixing the errors. These processing figures can be slashed if a retailer uses EDI to receive invoices directly into their software. It’s like magic. EDI gives a competitive advantage to companies in the fast-moving retail sector. The Good Guys approached us with the aim to get their suppliers trade electronically with them. They saw EDI as a strategy to have an edge over their competitors. Learn more on how MessageXchange helped The Good Guys achieve this objective and get tremendous results here.

Benefits of EDI for retailers, suppliers and distributors

It reduces errors and saves costs

Traditional procurement involves a lot of manual processes. There is a potential for expensive errors with every instance of human intervention. EDI eliminates manual work, automates the process and reduces transaction errors by 30 to 40 percent. Retailers and suppliers can save costs and reduce errors with EDI integration. They can save up to 90 percent of invoicing costs with EDI.

Shorter transaction times

EDI messages can be exchanged in minutes in contrast to the paper-based documents which can take days to be delivered. These reduced cycles lead to faster invoice processing and improved cash flow. Retailers receive EDI invoices directly into their software so they can process them quickly and efficiently. Target, an Australian department store that operates more than 300 stores in the country, wanted to achieve visibility and remain current and transparent in the fast-moving retail industry. Read how MessageXchange helped Target achieve their goal here.

It frees up time for staff to spend on more valuable tasks

EDI in the retail industry helps to automate processes and lets employees focus more on higher value tasks. Instead of spending time data entry, your staff can spend time on more strategic work to help your business grow. EDI helps both retailers and suppliers to streamline their business process and use their resources mindfully.

EDI documents used in the retail industry

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Message Types

Purchase Order

Purchase Order Response

Invoice

Despatch Advice

Remittance Advice

Product Catalog

Functional Acknowledgement

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Description

Sent from buyer to supplier to order goods or services

Sent from the supplier to the buyer to let them know how much of the order can be fulfilled, and any discrepancies from the original order

Sent from the buyer to the supplier for payment of the goods or services

Sent from the supplier to the buyer to let them know when and how the goods will be shipped

Sent from the buyer to the supplier to confirm payment

Sent from the supplier to the buyer with up-to-date product and pricing information

An automated response sent from a receiver of an EDI message to confirm receipt of the message

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ANSI X12

850

855

810

856

820

832

997

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EDIFACT

ORDERS

ORDRSP

INVOIC

DESADV

REMADV

PRICAT

CONTRL

If you want to learn more about how EDI works in the retail industry, have a look at our case studies or request a call back from our EDI experts below.

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