Author Archives: Rodrigo Martinez

25/11/2020

OCR vs eInvoicing

Some of the challenges that finance teams, particularly accounts payable teams, can often face include:
  • too many manual processes
  • data entry errors
  • high costs from labour, printing and archiving
  • paying fraudulent or misleading invoices.
Two of the most common approaches to overcoming these issues are optical character recognition (OCR) readers and eInvoicing. So what should you choose?

What is OCR?

OCR is a technology that distinguishes printed or handwritten text characters of physical documents, such as a PDF document. The basic process of OCR involves examining the text of a document and translating the characters into code that can be used for data processing. OCR can be hardware using a physical scanner or software which takes advantage of Artificial Intelligence (AI) for character recognition.

How does it work?

Generally accounts teams upload the PDF or scanned document to their OCR software where the invoice is read, captured and input into their accounting software.

Pros and cons of OCR

From afar, it can seem that OCR reduces the amount of effort it takes to process and invoice, makes for faster processing and depending on the volume of invoices, can reduce costs. But because it’s not true data exchange because it scans an unstructured document and tries to interpret it, it can produce mistakes. Some consider 70% OCR accuracy as ‘good’. Identifying and fixing up these mistakes can be time-consuming and costly. Some of the other cons are:
  • a limited range of document types can be read
  • it isn’t always accurate, so further checks and balances need to be in place (often manual)
  • technology experts may need to be hired to look after your technology
  • upfront costs can be high.

What is eInvoicing?

eInvoicing enables organisations to send and receive invoices electronically, directly to and from their software. No need to scan an invoice before uploading it into your software like you do with OCR scanners.

How does it work?

eInvoicing in Australia and New Zealand is provided through a network of interoperable Access Points, like MessageXchange, that exchange your eInvoices using the Peppol standard that has been adopted around the world. You can think of it like a telephone network.

Pros and cons of eInvoicing

eInvoicing has a few key benefits:
  • cost savings from data entry, printing and archiving
  • easier invoice processing
  • faster invoice payments
  • fewer errors
  • exchanging invoices directly to and from software
  • Enhanced security.

Next steps

There are a few things you should think about when looking at eInvoicing:

Getting your business ready

To prepare your business, think about these things:
  • Define your objectives
  • Look at your business processes
  • Get the relevant teams involved
If you want to learn more about preparing for eInvoicing, check out our whitepaper, . At MessageXchange, we try to make things easier to get started with eInvoicing:[vc_column_inner width="1/3"]

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13/11/2020

What EDI messages are best to achieve my business objectives?

There are a few things businesses need to think about when implementing EDI. One of the key ones is your business objectives – why you’ve chosen to use EDI in the first place. This will dictate how you go about your planning and implementation. Your business objectives will also determine what messages you exchange with your partners.

What types of EDI messages are there?

EDI can go far beyond a purchase order and invoice. Some common messages are:
  • Purchase order Sent from buyer to supplier to order goods or services
  • Purchase order change Sent from buyer to supplier if the original purchase order has changed
  • Purchase order acknowledgement Sent from the supplier to the buyer to acknowledge receipt of the order
  • Purchase order response 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
  • Advance shipping notice (or despatch advice) Sent from the supplier to the buyer to let them know when and how the goods will be shipped
  • Invoice Sent from the buyer to the supplier for payment of the goods or services
  • Recipient created tax invoice (RCTI) Sent from the supplier to the buyer for payment of the goods or services
  • Remittance advice Sent from the buyer to the supplier to confirm payment
  • Price/sales catalogue Sent from the supplier to the buyer with up-to-date product and pricing information
  • Product activity data Sent from buyer to the supplier with the number of units sold and units on hand
  • Transport instruction Sent from a buyer to a transport supplier (and related parties) to communicate transport arrangements
  • Transport response Sent from a transport provider to confirm instructions
  • Functional acknowledgement An automated response sent from a receiver of an EDI message to confirm receipt of the message.

What messages should you use?

Your objectives will influence the messages you should choose. Here are some examples:

If you’re trying to reduce manual handing

…the messages you should consider using are:
  • purchase order
  • invoice.
This means all invoices will come directly to your software electronically. No more need for your team to enter an invoice manually. You might ask why use a purchase order too. It’ll make it easier for your customers to receive orders, and will mean that they don’t have to manually enter them on their side. It usually leads to less errors throughout the process.

If you’re wanting to receive stock faster

…consider sending your purchase orders via EDI. By simply sending out a purchase order through EDI, it should get to your supplier significantly faster. They probably don’t regularly check their emails which can delay processing. It also means they don’t need to spend time entering it into the systems on their side.

If you’re after visibility of fulfillment

…the messages you should use are:
  • purchase order
  • purchase order response.
The purchase order is sent directly to your supplier’s software. And the purchase response is sent by your supplier to confirm whether your order can be fulfilled, and if it’s only being part-filled, it’ll tell you how much they can supply. These messages give full visibility of your order fulfillment.

If you’re trying to get better, more accurate information

…use a combination of:
  • purchase order
  • purchase order response
  • despatch advice and
  • or all of them.
A purchase order response will let you know ahead of time what the supplier will be able to send you. It helps you plan ahead if your whole order can’t be fulfilled. It also helps with data inaccuracies you might have. For example, if you don’t have the correct prices, you can let your suppliers amend prices on the purchase order response, which you can approve or not, before they despatch the goods. A despatch advice lets you know what’s coming, when and how. And getting the invoice electronically means your team don’t need to spend time re-entering it. All of the data from these can be used for reporting on supplier performance and more. An EDI invoice will mean you don’t have to re-enter the invoice data when it gets to you, which means less data entry mistakes.

If you’re trying to get better, more accurate information

Drop shipping is a popular business model for a lot of retailers. There are a few messages that can help you move to this model:
  • Purchase orders (PO)
  • Purchase order acknowledgement (POA)
  • Advanced shipping notice (ASN)
The PO gets the order to your suppliers as quickly as possible. The POA and ASN gives you visibility of where the order is at, and can even let you pass tracking information onto your customer.

If you want to receive deliveries more smoothly

There are two messages can help achieve this objective:
  • Purchase order (PO)
  • Advanced shipping notice (ASN)
Sending a PO gets your order to your supplier reliably. The ASN will let you know when to expect the delivery so your team is on hand to receive it. You can also use the SSCC labels to scan stock in to automate the receiving of goods.

If you want real-time data at your fingertips

There are a few messages that can help achieve this objective, including:
  • Purchase order (PO)
  • Purchase order response (POR)
  • Advance shipping notice (ASN)
  • Invoice
  • Sales forecast
  • Price/sales catalogue
The POR lets you know as soon as the supplier sends it, what they can supply. An ASN will let you know what’s being shipped, how and when. An invoice will help you see an accurate business position and liabilities. And price/sales catalogue makes sure you’ve got the most up-to-date data of the products you’re ordering. Never order with the wrong prices again. If you’re still struggling to decide what messages to use, have a chat to one of our experts. Request a call back below.

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06/11/2020

The state of eInvoicing in AUS and NZ

eInvoicing has taken off in countries around the world. Here in Australia and New Zealand, eInvoicing is still in its infancy, but steadily gaining momentum.

What is eInvoicing?

eInvoicing enables organisations to send and receive invoices electronically, directly to and from their software. It removes the need for unnecessary data entry and inaccurate OCR scanning. eInvoicing in Australia and New Zealand is provided through a network of interoperable Access Points, like MessageXchange, conforming to the Peppol standard. The standard was developed in Europe, but has been adopted around the world, including here in October 2019.

The current state of eInvoicing

The term ‘eInvoicing’ has been thrown around here in Australia for a number of years now. It really started to gain traction in 2019 when Australia and New Zealand signed a trans-Tasman eInvoicing agreement, allowing it easier for businesses both countries to exchange eInvoices. Today, the largest users of eInvoicing are government agencies. The Australian government is providing incentives for suppliers to use eInvoicing by promising suppliers with contracts less than $1 million payment within 5 days of issuing an eInvoice. In New Zealand, the government have set a target to pay 95% of all domestic invoices within 10 business days and eInvoicing is one of the key strategies to help reach it. New Zealand Inland Revenue (NZIR) was one of the first New Zealand government agencies to use eInvoicing. The focus for NZIR was to pay invoices early to help suppliers’ cash flow and to give them a seamless experience. Check out the case study here. The New South Wales state government has been a leader in eInvoicing in Australia. The Department of Customer Service (NSW DCS) recently implemented eInvoicing as part of the NSW Digital Government Strategy. The strategy’s purpose is to offer digital services that benefit customers and suppliers. Learn more about NSW DCS eInvoicing journey here. Some of the government agencies that are currently up and running with eInvoicing include:
  • The Australian Taxation Office (Australian government department)
  • The Department of Finance (Australian government department)
  • Services Australia (Australian government department)
  • The Treasury (Australian government department)
  • New South Wales Department of Customer Service (Australian state government department)
  • New South Wales Department of Premier and Cabinet (Australian state government department)
  • New South Wales Treasury (Australian state government department)
  • New South Wales Health (Australian state government department)
  • New Zealand Government Procurement (New Zealand government department)
  • New Zealand Inland Revenue (New Zealand government department)

What's next?

The government is currently looking for ways to increase the uptake of eInvoicing. The 2020 Budget here in Australia includes $120 million in funding to help businesses implement digital technologies. It also includes $3.6 million to make eInvoicing mandatory for all government agencies by the 1st of July 2022. If you want to get all the latest eInvoicing news, sign up for our newsletter below.

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30/10/2020

Budget announcements and its impact on eInvoicing

The Australian government recently released its budget for 2020 and it’s clear that digital transformation is high on their agenda – it included $800 million to improve access to digital services. Some of the initiatives announced were:
  • accelerating the creation of a single national business registry
  • expanding the government’s Digital Identity Program
  • accelerating the take-up of 5G technology
  • promoting Australian finance technology overseas and
  • helping businesses adopt digital technologies.
eInvoicing is also high on their agenda. eInvoicing enables organisations to send and receive invoices electronically, directly to and from their software. It removes the need for unnecessary data entry and inaccurate OCR scanning. Some of the benefits of eInvoicing include:
  • cost savings
  • easier invoice processing
  • faster invoice payments
  • fewer errors
  • exchange of invoices directly to and from software
  • improved security.

So what eInvoicing initiatives did the Government announce?

The Government set aside $120 million to help businesses adopt digital technologies, which includes $22.2 million specifically for small businesses. Small businesses in Australia have a long way to go, with some figures showing 90% of small and medium businesses still use paper-based invoices. The Government allocated an additional $3.6 million to help Federal Government agencies implement eInvoicing, which was announced in conjunction with a government eInvoicing mandate. Larger government agencies need to adopt eInvoicing by the 1st of July 2021, followed by all other agencies by the 1st of July 2022. The Federal Government also announced they’ll be looking at ways to mandate eInvoicing for State Government departments in the near future. This is just one of the steps to a more digital economy, with reports indicating government agencies, both federal and state, are responsible for around 10% of all business-to-business invoices. Another focus announced in this year’s Budget is to improve digital skills for workers and SMEs. $2.5 million will be allocated to help businesses with digital skills training. This funding will be used to develop a Digital Skills Finder platform to help workers and SMEs find training courses to further their digital skills.

What can we expect from the measures?

The Government have made it clear from this year’s Budget that they want to boost small business capability and increase the uptake of digital technologies. Overall, there are more than a dozen initiatives already planned to support businesses to adopt digital technologies. Expect to see Federal Government agencies implement eInvoicing early to comply with the mandate dates. And if you’re a supplier to government, expect to start receiving communications about issuing eInvoices. Now’s a good time to start preparing at your end and looking for eInvoicing providers. Just get in touch to find out more.

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28/10/2020

Getting EDI ready for peak season

Peak times can be chaotic for retailers. Christmas alone can account for almost 15% of all eCommerce transactions in a year. In 2019, sales during the Christmas period in Australia were forecasted to reach $52.7 billion. Managing an inefficient supply chain can be overwhelming at this time. Some of the main issues that businesses face are:
  • too many orders to fulfil for existing staff
  • increased costs during peak times
  • delays in order delivery for customers
  • not enough stock of goods.
The good news is there’s a way to help reduce these issues and make things easier for your business.

How EDI can help during peak season

Simply put, EDI (electronic data interchange) is the exchange of business information directly between business software. Think of a purchase order being created in one company’s accounting package, and it ‘magically’ appears in the supplier’s software; no email, no PDF, no manual data entry. Well, it’s not magic, it’s EDI!
Buyer enters the purchase order in their software Purchase order appears in Supplier’s software Supplier enters the invoice in their software Invoice appears in Buyer’s software
So how does it help businesses cope in peak times?

Reducing manual processing

Manual processes are a major issue businesses face during peak times. As orders increase, so does the work for staff. Using EDI, many processes are automated making it easier for staff to complete tasks faster and move on to others. Research shows around 75% of businesses believe they can process most inbound EDI/XML connections without a human touch. Studies also show that EDI can speed up business cycles by 61% and the order-to-cash cycle time by more than 20%. This means suppliers receive orders from customers sooner and they can process and deliver the goods faster. Overall, this helps reduce the risk of delayed deliveries and helps retailers keep stock at optimal levels. EDI can also be used by logistics companies to provide updates on deliveries. This helps reduce delays and gives more visibility for their partners during delivery.

Improving data and reducing errors

With less manual processing through EDI automation, the risk of errors is reduced. Less errors means data is more accurate and is more useful when it comes to forecasting. Data accuracy is critical for predicting demand and ensuring you have the right stock levels. Reducing errors is also important for avoiding ordering the wrong goods or amount of goods. These errors can impact your stock on hand for customers. In peak times, this damage your brand and potentially lose new customers. Using EDI removes most of the manual inputting making it harder for amounts to be incorrectly typed in.

Reducing costs

During times of high order volumes and demand, processes increase. This means businesses need more resources, including staff, to cope. EDI reduces costs through the automation of business processes. That can be the difference between needing to hire extra staff to help process orders or not. Another cost that increases as orders do are paper and filing costs. With EDI all documents are sent and stored electronically eliminating costs of printing and filing. If you’re interested in learning more about EDI and how it help your business this peak season, fill in the form below and we’ll get in touch.

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26/10/2020

Why government is so keen to implement eInvoicing?

Many organisations around the world are implementing eInvoicing, in particular government agencies. So why is government leading the charge? Here are a few reasons:

It benefits the economy

One of the key reasons government agencies are adopting eInvoicing is to stimulate the economy. It helps increase businesses’ cash flow because payment times are generally reduced. The Australian government even promises to pay eInvoices within 5 days for contracts less $1 million. In fact, studies estimate eInvoicing could provide the Australian economy with over $30 billion in benefits over ten years.

Benefits to government agencies

eInvoicing brings many benefits to government agencies themselves. These include:
  • Streamlined processes eInvoicing saves time processing invoices and payments by automating what would be manual processes. You don’t need to enter invoice information into your software, it just appears.
  • Fewer errors Less manual inputting also means less errors and more accurate data for reporting.
  • Reduced costs Because of the automation, workload and labour costs are reduced. And because there’ll be less errors, agencies avoid the added costs of fixing mistakes. Another critical cost that can be reduced is printing and filing. Overall, 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.
  • Faster payments eInvoicing can significantly speed payment processing due to automation. The average eInvoice is processed in 5 days, compared with 23 days for a regular invoice. This can help government agencies improve their supplier relationships and meet their promised payment terms.

Leading from the front

The government here in Australia is looking for ways to facilitate the adoption of eInvoicing. They’re leading from the front by implementing it with their own agencies first – they’ve mandated the use of eInvoicing for all Commonwealth government agencies by July 1, 2022. They’ve even promised $3.6million to help government agencies transition to eInvoicing and allocated $2.5 million to upskill workers and SMEs. There are a few agencies that are already accepting eInvoices. Some of them include:
  • The Australian Taxation Office (Australian government department)
  • The Department of Finance (Australian government department)
  • Services Australia (Australian government department)
  • The Treasury (Australian government department)
  • New South Wales Department of Customer Service (Australian state government department) – check out our case study
  • New South Wales Department of Premier and Cabinet (Australian state government department)
  • New South Wales Treasury (Australian state government department)
  • New South Wales Health (Australian state government department)
  • New Zealand Government Procurement (New Zealand government department)
  • New Zealand Inland Revenue (New Zealand government department) – check out our case study
If you’re looking at implementing eInvoicing, fill in the form below and we’ll get in touch with more information.

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15/10/2020

Why finance needs to become friends with technology

Finance teams constantly find themselves battling things like:
  • a need to reduce costs
  • greater workload with the same amount of staff
  • manual processes, which often lead to errors and
  • disparate sources of data, making it hard to find information when they need it.
The good news is that technology can improve these issues. And that’s why finance needs to become friends with technology.

Here’s where technology can help

Automate your whole procurement process with electronic data interchange (EDI)

This can significantly improve the processes of ordering and invoicing for any finance team. So, what is it? Simply put, EDI is the exchange of business information directly between business software. Think of a purchase order being created in one company’s accounting package, and it ‘magically’ appearing in the supplier’s software. EDI can help:
  • Reduce manual processes EDI can ease a lot of pressure on finance teams that find themselves processing an increasing amount orders. You’ll no longer need to input data into multiple systems or email documents to buyers and suppliers. This leaves you more time to focus on the other tasks that might come up.
  • Reduce costs EDI reduces manual processes and significantly reduces the amount of labour needed to process orders. This is especially beneficial during peak times of the year where casual assistance can be required. On top of this, EDI is all digital so you can save a lot on printing and filing.
  • Reduce errors and improve data accuracy EDI also reduces the risk of errors, making the data more reliable for reporting. You could use that data to monitor suppliers’ performance around responding to orders or delivery times.

Remove manual handling of invoices with eInvoicing

Another bit of technology that can help finance teams is eInvoicing. Invoicing makes up a huge chunk of finance teams’ time. Electronic invoicing, or eInvoicing, enables organisations to send and receive invoices electronically, directly to and from their software. It removes the need for unnecessary data entry and inaccurate OCR scanning.

eInvoicing can:
  • Reduce manual processes eInvoicing automates a lot of the manual processes involved in invoicing. No need to input the invoice information into multiple software and attaching to an email before sending to the customer. Everything is done within your existing ERP or accounting software.
  • Reduce costs Reducing manual processes simplifies invoicing for any finance team leaving you more time to work on other tasks. It also helps reduce the need to additional staff cover during peak times. The sending and filing of these eInvoices are electronic reducing your paper use and filing costs.
  • Data accuracy Manual processing is reduced limiting the risk of errors and improving data accuracy. Fewer errors means fewer disputes with partners and the need to follow up or correct invoices.

Use the data from your automated processes for more

If you leverage technology, the likelihood is that you can now use the data at your fingertips in more in-depth, insightful ways.
  • Two-, three- or four-way matching Is your team manually checking orders before they pay invoices? This is something that can be completely automated. Two-way matching checks the quantity and price on the order and the invoice to make sure you’re paying for exactly what you ordered. Three-way matching also checks what was shipped (on a despatch advice). And the bee’s knees, four-way matching, checks what the suppliers has agreed to send from the order response.
  • Invoice reconciliation With a feed from your bank and visibility of your invoices, our technology can reconcile your invoices. Imagine the time that could save!
  • Reporting Now that all the raw data is at your fingertips, you can use it to report on anything. It might be DIFOT (delivered in full on time) performance, the amount of invoice discrepancies or something else. The options are only limited by your imagination.
If you’re interested learning more about how eInvoicing or EDI can help you, request a call from one of our EDI experts.

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04/09/2020

When is the right time to implement eInvoicing?

eInvoicing lets companies exchange invoices electronically, directly to and from their software. It removes the need for unnecessary data entry and inaccurate OCR scanning. Businesses are increasingly adopting eInvoicing to:
  • reduce costs involved in processing invoices
  • process invoices faster
  • make faster payments
  • reduce data entry errors
  • move to a more secure way of exchanging invoices.
So when is the right time to implement eInvoicing? Here are some signs that it’s now time.

Your customers and suppliers are implementing eInvoicing

As businesses and government agencies enable eInvoicing, there’ll be a bigger push for their customers and suppliers to join them. Some organisations are providing incentives to make the transition more attractive. For example, government agencies here in Australia who can receive eInvoices have promised to pay them in five days for contracts up to $1 million. So, if you have multiple partners who are using eInvoicing, now might be the time to get on board. You’ll can start exchanging eInvoices with them, and future proof your investment by connecting with other customers and suppliers as they come on board.

Data entry is taking up too much time and resources

If you’re struggling to keep up with all your work, or if you’re looking to hire extra staff to help with invoice processing, it might be time to look at eInvoicing. Invoice processing can be time consuming for accounts payable and receivables teams because of the manual inputting, which is prone to errors. Processing a paper invoice is estimated to take 23 days, and that’s when the process runs smoothly. As a business processes more invoices, this can take even longer. eInvoicing is significantly streamlined and automated, reducing processing time. eInvoicing can reduce it by up to 65%.

You’re seeing too many data entry errors

Processing invoices manually or using OCR scanning can be error-prone. If you’re seeing a high error rate, it could be worth considering eInvoicing. The data is only input once – when the supplier inputs it into their software. And it’s no re-entry or scanning required – the source data is used all the way through the process. eInvoicing can reduce errors by 37% compared to manual invoicing.

You want to reduce costs

All businesses are looking for ways to reduce costs. One process that’s often forgotten is invoicing. Traditionally, costs attributed to invoicing can be:
  • Printing: even if you’re using PDFs, invoices may be printed. You’ll need to pay for paper, ink and even printer maintenance.
  • Labour: you need people to process invoices and this only increases as your business grows.
  • Filing: if you’re storing hard copies of your invoices, the costs can add up.
Overall, it’s estimated to cost $30.87 to process a paper invoice and $27.67 for PDF invoices. If you’re processing more and more invoices, these numbers start to add up. For suppliers, eInvoicing can:
  • reduce accounts receivable costs by up to 44%
  • reduce archiving costs by up to 32%
For buyers, it can:
  • reduce the cost of receiving an invoice by up to 90%
  • reduce the cost of archiving accounts payable invoices by up to 67%
  • cost less than $10 to process
  • reduce accounts payable labour by 25-40%.

You’re undertaking a digital transformation review

Businesses often look to digital transformation to improve business process and performance. The result of it should also provide more accurate data to help with analysis and decision making. Finance teams can realise fantastic benefits when they implement eInvoicing. eInvoicing can automate the invoicing process and significantly reduce manual inputting. This improves data accuracy for reporting and decision making, making it easier to see real-time liability position. The other great thing is that it works with your existing accounting software, so there’s no need for further investment.

Low cashflow

High competition in the business environment has led to an increase in credit sales, particularly in Australia. This has led to a high volume of suppliers struggling with cashflow. Economic downturns have added further pressure, so now more than ever, businesses are looking for ways to collect receivables as quickly as possible. eInvoicing helps to speeds up the time it takes to get to a customer. It also speeds up invoice processing and payment for buyers. Studies show eInvoicing can improve on-time payment by more than 15%. If you think it’s time for your business to implement eInvoicing, request a call from one of our EDI experts.

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04/09/2020

How to onboard suppliers to EDI: The key to maximising ROI

In tough times, like now for a lot of businesses, we scramble to find cost savings. We search for the lowest hanging fruit. Easy wins. The things that’ll give us the best bang for our buck. One thing to look at is automating your procure to pay processes. This is where electronic data interchange (EDI) can help.

What is EDI?

Simply put, EDI is the exchange of business information directly between business software. Think of a purchase order being created in one company’s accounting package, and it ‘magically’ appears in the supplier’s software; no email, no PDF, no manual data entry. Well, it’s not magic, it’s EDI! New to EDI? Learn the basics in our whitepaper, an introduction to EDI.

What are the benefits of EDI?

There are a few reasons why more and more businesses are shifting to EDI especially during tough times. These include:
  • cost savings
  • reduced errors
  • greater visibility into your supply chain
  • improved efficiency
  • automated processes
  • easier supplier reporting.

The key to EDI: getting your suppliers onboard

It all sounds fantastic, right? But it only works when your suppliers are onboard too. There are a couple of important reasons why:
  • It maximises your ROI Every business wants to make sure they’re getting the most out of their investment. The best way to do that with EDI is to ensure your suppliers are trading through the same method. The cost savings you’ll see from EDI are per supplier. The reduced savings you’ll see are per supplier. And it’s the same with the other benefits.
  • You use one process with all your suppliers Businesses that don’t onboard all their suppliers have different processes for each. All this does is stop your team from eliminating errors and saving time. This is especially the case when receiving invoices. If you still receive email and PDF invoices your accounts payable team still need to manually input the figures into your system

You’ll face pushback. But that’s ok!

Onboarding to EDI has long been an issue of contention between companies and their suppliers. We’ve seen it all; their systems aren’t capable, they don’t have the knowledge, they can’t meet your deadline or it’s too expensive. We haven’t been involved in one onboarding project where all suppliers get onboard without any pushback. But that’s ok…

Have options ready

That’s ok… As long as you have options. This is where it’s really important you have a great EDI provider. Their experience and tools in this space can help you overcome all of this.

Consider staging your onboarding

This’ll make it more manageable. Plus, you’ll learn as you go. You could segment by:
  • Those who you send the largest order volumes This’ll get you the some of the biggest benefit straight up.
  • Your most troublesome suppliers If you’re spending lots of time rectifying these mistakes, think about onboarding this group first.
  • Suppliers who can get going quickly, or who have experience in this area They’ll likely be able to get onboard fastest.
  • Or something else!
You can tackle each type of supplier within each of your stages. Each group will require a tailored communication so make sure it’s clear on what they need to do and by when. Once you’ve sent out your communications, you’ll need to do some testing. This will vary between suppliers using a portal and those who are integrated with their software.

Seek help

If you’ve chosen the right EDI provider, they’ll be able to help you and call on their experience to get your suppliers onboard. If you’re interested in learning more about onboarding your suppliers to EDI, check out our free webinar!

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04/08/2020

What are my eInvoicing options?

eInvoicing is changing the way we send invoices and other documents to our partners. Simply put, eInvoicing enables organisations to send and receive invoices electronically, directly to and from their software. It removes the need for unnecessary data entry and inaccurate OCR scanning. 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. You can think of it like a telephone network – your phone and your friend’s phone are corners one and four, and your network provider (like Telstra, Optus or Vodafone) are corners two and three.We’re seeing eInvoicing rapidly expand around the world, especially in government agencies. In Australia, the government has promised to pay suppliers with contracts less than $1 million in 5 days if they issue eInvoices. It can be difficult for suppliers to decide what’s best for their business. Here are some of the eInvoicing options you have as a supplier.

What are my options

Portal based eInvoicing

This option is the fastest to implement and has the least up-font costs. You can enter your eInvoices in a website and send them to your customer via the Peppol eInvoicing network. These are then received into your customer’s software.

MessageXchange offers businesses a free portal, Colladium, which can be used to send eInvoices to businesses on the Peppol network.

There are a few benefits of using portal-based eInvoicing:
  • It’s easy to set up
  • There’s generally no establishment fee and low to zero monthly costs
  • It can be accessed anywhere – you only need an internet connection
  • They often have an easy-to-use interface.

eInvoicing integration/gateway

The more automated option is an eInvoicing gateway or integration. This allows you to send and receive eInvoices directly from your ERP or accounting software. This means you don’t need to do any additional manual processes. Once you’ve entered the invoice in your existing software, it’s then sent to your customer’s software for them to process. There are a number of benefits to an integrated eInvoicing solution:
  • It uses your existing software
  • You can find cost savings (paper, printing and labour costs)
  • There’s no need for data re-entry
  • You’ll see fewer errors
  • It’s secure through encryption at rest and in transit.

What are my options

It’s important to choose an option that is adaptable and flexible for your business. Two of the main factors to consider are:
  • The amount of orders you receive As your orders increase, so does the amount of manual inputting.
  • Your strategic goals Whether you’re looking to automate your processes or just comply with your buyers eInvoicing requirements or incentives.
Use this table as a rough guide:[vc_column_inner width="1/2" css=".vc_custom_1565317545162{padding-top: 0px !important;background-color: #00b7f1 !important;}"]

Consider portal based eInvoicing if…

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Consider an eInvoicing gateway if…

[vc_column_inner width="1/2" css=".vc_custom_1565317604253{padding-top: 0px !important;background-color: #eeeeee !important;}"]

You issue a small number of invoices a month

[vc_column_inner width="1/2" css=".vc_custom_1565317619229{padding-top: 0px !important;padding-bottom: 0px !important;background-color: #eeeeee !important;}"]

You issue a large number of invoices a month

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You have a small amount of eInvoicing enabled customers

[vc_column_inner width="1/2" css=".vc_custom_1565317619229{padding-top: 0px !important;padding-bottom: 0px !important;background-color: #eeeeee !important;}"]

You have large amount of eInvoicing enabled customers

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You just want to comply with a handful of buyers’ requirements

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You don’t want to double-enter data

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You’re just starting out in eInvoicing

[vc_column_inner width="1/2" css=".vc_custom_1565317619229{padding-top: 0px !important;padding-bottom: 0px !important;background-color: #eeeeee !important;}"]

You need a flexible solution that grows as your business does

[vc_column_inner width="1/2" css=".vc_custom_1595395392804{padding-top: 0px !important;background-color: #ffffff !important;}"][vc_column_inner width="1/2" css=".vc_custom_1565317619229{padding-top: 0px !important;padding-bottom: 0px !important;background-color: #eeeeee !important;}"]

You want to reduce errors

If you’re interested in learning more about eInvoicing options, fill in the form below and one of our experts will get in touch.

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E-invoicing

23/07/2020

3 reports retailers need

A real benefit that’s often forgotten when it comes to electronic data interchange (EDI) is improved reporting. We all know that EDI reduces the amount of data entry errors, but not as many people leverage that data for reporting. EDI allows you to get accurate insights to make informed, data-driven business decisions. From tracking the performance of your suppliers to seeing how many orders you’ve sent, we’ve picked three reports all retailers should be using.

Purchase orders with outstanding invoices

EDI feeds invoices directly into your software so you can easily identify which ones are yet to be paid. This data’s important to keep track of a business’ liabilities and financial position. Keeping on top of outstanding invoices will improve your business liquidity and help maintain positive relationships with suppliers.

Order to shipment lag and order fulfillment rate

Advanced shipping notices (ASNs) are sent through EDI when goods are shipped. They let the buyer know what’s sent, when and how. It’s easy to grab this data from EDI messages to measure the amount of time between a purchase order being issued and the goods being shipped, as well as how much of the order has been fulfilled. This data can be used by retailers to measure supplier fulfillment rates, so you know your in-stock position. It’ll also make it easier for you to identify trends in a company’s ability to supply goods.

Purchase order date to receipt of goods date

Having an understanding how long it takes between placing an order and goods being received is imperative for retailers. The good news is retailers can easily track this metric from the data in EDI messages (like receiving an ASN and scanning SSCC labels as goods come in) to monitor supplier delivery in full on time (DIFOT) performance and optimise order management and stock levels. If you’re interested in improving visibility and gaining valuable insights, request a call from one of our EDI experts.

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EDIRetailers

08/07/2020

Two-, three- and four-way matching: Made easier with EDI

Paying invoices can be a time-consuming task, especially for retailers who pay tens of thousands of invoices a month. Before payments are made, they need to check the goods have been received and the price and quantities on the invoice are accurate. The last thing they want is to be paying for things they shouldn’t be. But sometimes mistakes happen. They can be a result of human error like data entry mistakes. Or it could be something more sinister. The accounts payable team usually compares the quantity and price on an invoice against the purchase order, as well as the stock that’s been received. Unfortunately, the more checks that are done, the more time consuming the process is. That’s where EDI can help.

What is two-way, three-way and four-way matching?

It’s where the accounts payable team checks the quantity and price of an invoice against what’s been ordered and agreed to, and what’s been received. The number of documents checked determines the type of matching (eg. two documents = two-way matching and so on). So what documents are checked?[vc_column_inner width="2/6" css=".vc_custom_1593754872084{padding-top: 20px !important;padding-right: 0px !important;padding-bottom: 20px !important;padding-left: 0px !important;}"][vc_column_inner width="1/6" css=".vc_custom_1593753592414{padding-top: 20px !important;padding-right: 0px !important;padding-left: 0px !important;background-color: #1b75bb !important;}"]

Two-way matching

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Three-way matching

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Four-way matching

[vc_column_inner width="1/6"][vc_column_inner width="2/6"]

Purchase Order (Check price and Qty)

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Order Acceptance/Response (Check Qty)

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Order Receipts and Packaging Slips (Check Qty)

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Invoice (Check price and Qty)

[vc_column_inner width="1/6" css=".vc_custom_1593753317822{padding-top: 20px !important;background-color: #f9f9f9 !important;}"][vc_column_inner width="1/6" css=".vc_custom_1593753325484{padding-top: 20px !important;background-color: #f9f9f9 !important;}"][vc_column_inner width="1/6" css=".vc_custom_1593753338153{padding-top: 20px !important;background-color: #f9f9f9 !important;}"][vc_column_inner width="1/6"]And why do businesses choose to use two-, three- or four-way matching?
  • It saves money It helps businesses avoid overpaying for items, paying for duplicate items and paying for things they haven’t received.
  • It safeguards the business By checking the audit trail, it decreases the risk of paying fraudulent or incorrect invoices.
  • It helps you pinpoint trouble suppliers Verifying invoice amounts and price can help make sure your suppliers are not taking advantage of you. Suppliers who consistently make mistakes on invoices can cost your business and could be a sign to look for alternatives.
  • Prepares businesses for audits Auditors are specifically on the lookout for financial discrepancies. Compiling these documents in advance of an audit and checking that the numbers line up using the three-way matching process is a big step in the right direction.

How can EDI be used with two-, three- or four-way matching?

EDI (electronic data interchange) is the exchange of business information directly between business software. Think of a purchase order being created in one company’s accounting package, and it ‘magically’ appears in the supplier’s software; no email, no PDF, no manual data entry. Well, it’s not magic, it’s EDI! So how does EDI work with verifying invoices? EDI gets all the data you need in your software – purchase orders, purchase order responses, shipping notices and invoices. It doesn’t require a person to type them in, they just appear. Once all the documents are received, a workflow can match each invoice with the corresponding purchase order, purchase order response and shipping documents. It’ll automatically check that the invoice price is what was agreed on, and the invoice quantity is not more than the amount of stock you received. It saves your accounts payable team time by automating the process. The benefits of using EDI with two-, three- or four-way matching are:
  • automated document matching
  • reduced time to make payments
  • reduced labour costs
  • more time for your accounts payable team to work on value-adding tasks
  • less human errors.

Implementing two-, three- or four-way matching

There are few things to think about before you start using two-, three- or four-way matching in your business.

Decide what you want to achieve

You can take verification to different levels of details, these could be:
  • Making sure you’re not paying for more than you ordered
  • Making sure you’ve received what you’re paying for
  • Or something else.
This will determine what level of matching is best to achieve your goals.

Decide what messages and fields to match

Depending on what you want to achieve will determine what messages and data you’ll compare: Two-way matching You’ll probably match:
  • the price in the purchase order (PO) with the price on the invoice and
  • the quantity in the purchase order with the quantity on the invoice.
Three-way matching In addition to the checks in two-way matching, you’ll probably match:
  • the quantity of the goods shipped by the supplier.
This information can be found on the advanced shipping notice (ASN) or despatch advice. Four-way matching In addition to the checks in three-way matching, you’ll probably match:
  • the quantity of the goods confirmed from your supplier. This information can be found in the purchase order response (POR), which you can ask your suppliers to send to you through EDI.

Decide what messages and fields to match

Once you know what messages you will be using you can get started with implementing EDI. Working with an EDI provider The first thing is choosing an EDI provider, check out our blog to learn more about what to think about. After that, your EDI provider will build out your business rules to automate the checking of EDI messages. When your business rules are set to your requirements then you are able to go live. Onboarding your suppliers Suppliers can only start sending you messages (i.e. POs, invoices, ASNs and/or PORs) once you have onboarded them.
  • Your EDI provider can easily connect to suppliers that already have EDI capability.
  • For the suppliers who aren’t EDI compatible, it may be worth providing them with a portal option to start sending messages quickly and easily to you. For MessageXchange customers, we offer a free portal, Colladium, to help onboard suppliers.
If you’re interested in learning more about two-way, three-way or four-way matching, fill in the form below and one of our experts will get in touch.

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EDIRetailers