20/09/2018

What to look for in a supplier portal

In the past decade, the retail landscape has seen major changes because of increased competition, new business models emerging, a more integrated supply chain and the increase of online retailing. As the industry continues to evolve, more businesses are getting on board with EDI and realising community enablement is an important factor that needs to be considered. As a result, many retailers, large and small, are starting to look at supplier portals.
A supplier portal is a web-based portal that facilitates collaboration and allows suppliers to trade with their customer without having to implement fully integrated EDI. It allows the retailer to get the full benefits of EDI.
The first decision that most retailers make is whether to do this in-house or outsource. Building a portal yourself can be costly and time consuming. This is where outsourced supplier portals come in. Some EDI supplier portals support basic EDI documents such as purchase orders (PO), purchase order responses (POR), advance shipping notices (ASN) and invoices (INV). However, supplier collaboration in retail supply chain gets more sophisticated than just exchanging trading forms.

So, what should you look for in a supplier portal?

Supplier enablement and management

The portal should enable all your suppliers and trading partners to get on-board, regardless of their size and technical capability. It should be a place for you to be able to manage the onboarding, offboarding, relationships with your suppliers and more.

No costs imposed on your supply chain

To maximise uptake, your suppliers should bear no cost when joining a supplier portal and trade electronically. In fact, imposing costs is an inhibitor to your suppliers getting on-board your EDI journey.

Advanced technology

This ensures the portal can adapt to new requirements as your business grows and the industry changes.

Continued development

If your portal supplier has a focus on R&D, you can rely on them to keep your business at the forefront of technology. It's likely they'll be introducing new functionality to you regularly.

Security

It should follow the right standards and procedures to handle your sensitive business information.

Customisation

Every business has its own needs, and even your suppliers may have their own needs. A supplier portal should be flexible enough to be customised for your business.

Ability to walk up to EDI integration

Some suppliers may not want to, or be able to implement full EDI integration from day one. Does your supplier portal allow them to start out on a web portal, and walk up to integration when they’re ready?

Bi-directional trade

If you’re in the B2B space, why not consider a portal that can enable you to get EDI efficiency from both your suppliers and your customers?

A central place for all business collaboration

The supplier chain isn’t limited to just procurement messages. Consider these things when looking at a supplier portal:
  • Enable trade through the exchange of purchase orders (PO), advance shipping notices (ASN), invoices (INV) and more.
  • Allow you and your supplier to maintain real-time product data. This means you will always have up-to-date product data at the time of placing a PO.
  • Be a place to source new products and suppliers, to expand your trading network
  • Share other business information like MIGs, new store openings and more.
MessageXchange’s complementary service, Colladium, is a central place for all your trading requirements. It enables you to remove the barriers to EDI adoption and collaborate more efficiently with your trading partners. Want to find out more? Check out Colladium here. Or, talk to us today.
EDIRetailers
Prepare for STP

11/09/2018

Prepare for STP – Prepare for the future

In recent years, Australian companies have seen major reporting reforms required by the Government. SuperStream came into effect in 2016, and this year Single Touch Payroll (STP) becomes mandatory for all businesses. If you’ve experienced these changes, you’ll notice how big of a role technology has played. This is how Government, and many businesses alike, see the future. The Australian Government recently announced that they’ll be moving forward with e-invoicing, through which electronic invoices can be exchanged directly between software of trading partners. As well as this, MAAS and MATS are now mandatory for Superannuation funds. This reports contributions and account changes as they happen.
With the Government on a journey of digital transformation, it’s likely that other changes are on the horizon.
In mid-2019, the Australia New Zealand Electronic Invoicing Board (ANZEIB) will be established to provide direction on how e-invoicing will be rolled out in the next few years. E-invoicing is expected to help businesses save an estimated $30 billion in transaction costs in the first 10 years. It is also expected that the Pan-European Public Procurement Online (PEPPOL) interoperability framework will be adopted and ready to use by the end of 2019, making it easier for businesses to exchange invoices with companies in Europe, Singapore, Canada and the USA. These are all part of the Government’s digital transformation project to streamline B2G reporting and gain near-real-time visibility. It allows departments to have access to the same up-to-date information as businesses, their employees and super funds. Under these reporting initiatives, employers are required to report information in a standardised electronic format.
If you’ve chosen a technology partner to help you along the way, you’ll know how important it is to choose a long-term partner.
By selecting a long-term partner in the beginning, you’ll have a solution that will future-proof your business. It’s important that the solution you choose is flexible and complies with industry-wide frameworks to easily adapt to any new changes. It means that when the time comes for a change, you won’t need to go through the whole process of sourcing for a new provider and establishing a new gateway. Instead, you can use that time to focus on your business. Solutions like MessageXchange allow you to comply with Government legislation like SuperStream, STP and eInvoicing, as well as other needs like EDI. Want to find out more? Have a quick chat with one of our experts.
Single Touch Payroll (STP)
Your STP readiness checklist

10/09/2018

Your Single Touch Payroll (STP) readiness checklist

If you’re about to start your STP compliance journey but aren’t too sure how to go about it, don’t worry. We’ve put together this guide on what you need to get STP ready.

Technology

Update your payroll software to the latest version You need to make sure that your payroll software is STP enabled. Work with your payroll software provider to update your software to the latest version. Of course, if you develop your own payroll software, make sure that your software can export the data that the ATO requires. STP file format and ATO connection If your payroll software is not connected to the ATO, you can work with a sending service provider (SSP) like MessageXchange, to transmit your STP files on your behalf. In this case:
  • Check if your software can generate payroll files in the ATO-required XML format. If not, check with the SSP if they can map (‘translate’) your payroll file to the format required by the ATO
  • Find out if you need any configurations or testing to start your STP process
  • Find out how you will receive the ATO’s responses.

Internal process

Review your payroll process to ensure:
  • You are paying your employees correctly
  • You are handling employees’ entitlements correctly
  • You employees’ details (address, date of birth, name) are up to date and in the correct format.
Under STP, you are not obliged to provide payment summaries (previously group certificates) to your employees, but you can still choose to do so. Decide if you want to continue to issue payment summaries.

Employees

Inform your employees that you are no longer obliged to provide payment summaries. The ATO will make the information that was available on payment summaries visible in their myGov account. They’ll see this under ‘income statement’. Advise your employees to set up a myGov account, if they haven’t already. With a myGov account, they will be able to see their income statement, year-to-date tax and super information online. The ATO have published information on how to setup MyGov accounts. Still have questions? Download our comprehensive guide to achieving Single Touch Payroll (STP) compliance.
Single Touch Payroll (STP)
Things to know about STP

07/09/2018

5 things to know about Single Touch Payroll (STP)

Whether you’re a business getting STP compliant early or one who’s starting the search after a deferral, here are five things to know.

1. How to count your employees for STP

Counting employees is required to work out when you need to be compliant with STP. Businesses under 20 employees have until the 1st of July 2019 to comply, whereas businesses with 20 or more employees have been required to report using STP since the 1st of July 2018. You'll need to include the following in your headcount:
  • Full time employees
  • Part time employees
  • Casual employees who are on your payroll on 1 April and worked any time during March
  • Employees based overseas
  • Any employees absent or on leave (paid or unpaid)
  • Seasonal employees (staff who are engaged short term to meet a regular peak workload, for example, harvest workers).
And don't include these in your headcount:
  • Employees who ceased work before 1 April
  • Casual employees who did not work in March
  • Independent contractors
  • Staff provided by a third-party labour hire organisation
  • Company directors
  • Office holders
  • Religious practitioners.
If your organisation is part of a company group, all employees employed by all member companies of the wholly-owned group must be included.

2. Businesses with 19 employees or less

If your organisation has 19 or less employees, STP reporting has been made mandatory from the 1st July 2019.

3. What STP means for your employees

Although STP mainly affects employers, there are certain things your employees should be aware of. The Government suggests you inform your employees that you’re no longer required to provide them with a payment summary. Under STP, they will be able to view their payment summary, now called ‘income statement’, in their myGov accounts, at the end of the financial year.

4. Maintaining security of your payroll data

With STP, you are required to report sensitive information of your employees to the ATO on every pay run, such as their salaries, allowances, pay as you go (PAYG) withholding and superannuation. Therefore security should be a top priority. When searching for an STP solution provider, check they adhere to rigorous security requirements. These include having a recognised security certification (such as ISO 27001), complying with the ATO’s Operational Framework and being whitelisted for STP by the ATO.

5. Australia isn't the first country to implement STP

There have been similar initiatives implemented in other countries, such as the PAYE RTI, implemented in the UK in 2013. According to a UK Government research, there have been positive changes to the reporting experiences of employers. 80% employers found end of year (EOY) reporting under RTI easier than or in line with their expectation, with 91% expecting the next EOY to be easier than in 2013. 75% of employers experienced minimal burden at EOY with RTI. 67% said that RTI has been very easy or fairly easy to deal with. As a sending service provider (SSP), MessageXchange has worked with a number of payroll software companies to provide a secure gateway for customers to achieve STP compliance. If you are using one of these providers, we’ve got you covered. And even if your payroll software is not listed there, let us know and we can help get you STP ready. Ready to go? Request a quote here. Need more info? Download our comprehensive guide to achieving Single Touch Payroll (STP) compliance.
Single Touch Payroll (STP)
Single Touch Payroll search

29/05/2018

4 things you need to know before choosing a Single Touch Payroll (STP) solution provider

If you are reading this article, chances are you are aware of the ATO’s Single Touch Payroll (STP) initiative that all Australian businesses will need to comply with from 1st July 2019. However, if you need a quick recap, check out our previous post here. We understand that looking for an STP provider at this time can be a stressful experience, especially with the end of financial year reporting drawing near. That’s why we have put together a short list of considerations that we think will make your search easier.

1. Security is the top priority

The STP initiative requires employers to report sensitive information, such as employees’ salaries and allowances, pay as you go (PAYG) withholding and superannuation to the ATO, on every pay run. This means that security should be a top priority. You should check if they adhere to rigorous security requirements. For example, they should meet the following conditions:
  • have and able to provide you with an ATO recognised security certification (such as ISO27001)
  • comply with the ATO’s Operational Framework
  • be whitelisted by the ATO for Single Touch Payroll
Meeting these requirements ensures that an STP solution provider has the technical processes and internal measures in place to adequately protect your data, giving you peace of mind when you have a third party dealing with your sensitive information.

2. Flexibility in supporting different file formats

You want an STP solution that is able to adapt to your specific business requirements, reduce time and effort that you can invest elsewhere. One way is to choose a provider that is able to process either the ATO’s XML file, or give you the option to upload any file format conforming with the dataset of STP to the ATO. For example, MessageXchange’s STP solution allows you the option to either upload your STP file through a web browser or post the reports from your software. Find out more here.

3. Single Touch Payroll readiness

A solution that requires minimal changes to your current software can also allow you to quickly and easily become STP compliant. This is especially important if your software is unable to produce an STP compliant file, meaning you need a solution that can map your file to the ATO’s defined XML format. Some solutions, such as MessageXchange’s Single Touch Payroll solution, will let you introduce different types of messages, such as SuperStream messages and Standard Business Reporting (SBR2) services that comes with SuperTICK, SuperMatch, TFN declaration, Practitioner Lodgement Service (PLS). Consider an STP provider that can support your business for more than just your current STP requirements. This means that you will be prepared for any new ATO requirements in the future.

4. System reliability

The ATO requires businesses to report to them each time they pay their employees. Therefore, you want an STP solution provider with minimal service downtime. Choose a provider with high system availability to make sure your reports to the ATO are not delayed. Think about these points when doing your research. Want to know how our STP solution can help you? Speak to one of our Account Managers today. Fill out your information here and we will be in touch shortly.
Single Touch Payroll (STP)

09/05/2018

We are now whitelisted by the ATO for Single Touch Payroll 2018!

Our Single Touch Payroll (STP) services (submit and update) have been certified (whitelisted) by the ATO for the latest version of STP (PAYEVNT.0003 2018).

What does this mean?

The ATO has whitelisted (certified) MessageXchange as a Sending Service Provider (SSP) in Production. This means we can transmit Single Touch Payroll files in Production from an ATO whitelisted (certified) payroll software or via uploading files from Colladium. We are also compliant to SBR2 platform and Operational Framework requirements.

How does this benefit you?

You are now able to do Production Verification testing (PVT) through your MessageXchange STP gateway. If you haven’t started, we have included the following steps to guide you through this process:

1.      Get your service certified

All payroll software providers (DSPs) are required to complete a 'Certify a service' form to whitelist your service for the production environment. The ATO will then provide you with a new ProductID to conduct production verification testing (PVT) in the ATO’s production channel.

2.      Begin production verification testing (PVT)

Submit your first STP message to the ATO.
  1. Notify DPO@ato.gov.au with participating employer details
  2. The ATO will schedule support for the production verification testing (PVT)
  3. Lodge the production PAYEVNT for the participating employer
  4. The ATO will send back receipt of lodgement
  5. The ATO will verify the lodgement
  6. You’ll receive acknowledgement of outcome from the ATO.
Once your testing is completed and approved by the ATO, your product will be certified and listed on the SBR Product Register for Single Touch Payroll. You have now completed production verification testing (PVT). Participatingg employers may be transitioned to Single Touch Payroll! Still have questions? Contact us for more information or to sign up.
Single Touch Payroll (STP)
Single Touch Payroll

25/08/2017

Are you ready for Single Touch Payroll?

From the 1st of July 2018, businesses with 20 employees or more  will need to report payroll information to the ATO at the time their payroll is processed. Business that fail to comply may face penalties.

What is Single Touch Payroll?

Single Touch Payroll, or STP, is an initiative introduced by the Australian Government to provide real-time visibility of businesses and their payroll. It will streamline businesses reporting by allowing reports to be submitted to the ATO at the same time as paying employees. It removes the need to provide annual reports to the ATO. Single Touch Payroll reports will include information about employee salaries and wages, pay as you go (PAYG) withholding information, superannuation contributions and more. While Single Touch Payroll will be mandatory for employers with 20 or more employees, it will be optional for those with less than 20.

What does this mean for your business?

If your business has 20 or more employees, you will need to submit STP information to the ATO at the time of payroll processing. You can begin to submit STP information now, but it will become mandatory from the 1st of July 2018. The ATO has already defined STP messaging standards, including a message implementation guide and transmission protocol. To ensure compliance by the 1st of July 2018, businesses must be able to:
  1. submit STP information in the correct XML format and
  2. submit the XML message to the ATO using the defined ebMS3 AS4 protocol via an accredited STP solution.
MessageXchange is Single Touch Payroll enabled, including ISO 27001 certified, and can assist businesses with compliance. Our secure Gateways can connect to your existing software, map native files to the required STP XML format and send these files via our existing ebMS3 AS4 connection to the ATO. Find more information and request a quote here or contact us to have a chat.
Single Touch Payroll (STP)

31/07/2017

The key to efficient transport bookings and deliveries

When it comes to EDI, a lot of us think about procurement-related messages – orders, invoices and sometimes even product data. But I’d like to shift your thoughts to another use for EDI… transport messages. As a consumer yourself, you’ve probably received notifications when your shipment has left the warehouse, when it’s about to be delivered and even when it’s been delivered. In the B2B world though, things are quite different.
Many companies have very little visibility into where their shipments are and when they’ll arrive.
Sure, they may have received an ASN (advanced shipping notice), which may state the expected delivery date, but it generally doesn’t mention the time, nor does it account for any shipping delays. This means your receiving staff need to be ready all the time, interrupt their work or take themselves away from other tasks they should be working on. If no staff are available to receive a delivery, or if too many deliveries arrive at once, shipments may even be turned away. This is costly to any business, not to mention the impact to customers and your reputation. By establishing EDI connections with your transport companies, you can book shipments (transport instructions), query its whereabouts (responses) and have notifications triggered at various stages of the journey. You’ll be able to plan for the arrival of shipments, manage your staff’s time more effectively and you’ll have the ability to let customers know when their goods will be delivered. For those of you who use drop shipping, you can use this data to give your customers a seamless omni-channel experience, letting them know where their products are and when they’ll arrive. For companies who send a large amount of goods, you’ll never have to logon to your freight company’s portal again.
Use these transport messages to book and track everything from your existing ERP or freight management system.

Newsletter

Sign up to get the latest EDI updates

Stay up-to-date with industry news, useful blogs and whitepapers, expert tips and more.

EDIRetailersSuppliers

19/05/2017

B2B predictions in retail and supply chain for 2017 and beyond

The retail industry is in the midst of huge change. There’s an ever-increasing amount of competition from online-only stores, the rising cost of brick and mortar retail space, a bevy of information available for consumers and many shoppers conditioned to find the lowest price. Slow economic growth has forced households to reduce their spending, and retailers are following suit. The flow on effect from this is being seen throughout the whole supply chain, right down to suppliers and manufacturers. With the new financial year approaching, here’s how we predict retailers and suppliers will become even more efficient in 2017 and beyond…

Movement towards the ‘holy grail’ supply chain

While organisations have been using EDI for years, they’ll now start to look to the ‘holy grail’ supply chain. Not only will data flow seamlessly between a company and their goods suppliers, but this information will integrate with other service suppliers like transport and logistics providers. Organisations will try to streamline their business processes as much as possible, so when an order enters an application, everything thereafter follows like clockwork.

Emergence of standards

The Digital Business Council’s eInvoicing standard was released last year, with the network set to go live in the coming months. The initiative presents a common standard, which will reduce the barriers to electronic invoicing for all businesses. With support from Government, this standard is set to grow, just like it has in Europe and South America. We’ll see businesses start to adopt GS1’s transport instruction and response messages to get yet another level of visibility into their supply chain. Organisations will be able to access information from when they ship goods, to when they’re on their fourth, fifth or sixth leg of delivery.

Focus on smaller suppliers

Many organisations have their top trading partners using EDI, but now they’ll start to focus on the others. Very few supply chains use 100% electronic trade, but with new tools like Colladium that address cost the cost of EDI for small suppliers, as well as the issue of cost from supplier churn, companies roll out these solutions to achieve 100% electronic trade.

Integration with more than just suppliers

The data held in EDI messages is extremely valuable. In a typical EDI scenario, the automated process brings great efficiency to your business, but it can bring efficiency and benefits far beyond that. In 2017 and beyond, we’ll see more businesses leverage this data for things like bank reconciliation and extending finance to suppliers. We’ll see EDI, which was once used to bring efficiency to an organisation’s supply chain, now bring efficiency to other areas like finance.
EDIRetailers

23/03/2017

5 things to consider when choosing an integration provider

Choosing an integration provider isn’t a small decision; it’s likely to be a long relationship. A lot of our customers have been with us for over 10 years and they often turn to us for our expertise. Doing your homework at the beginning will help you find the right provider for your business. This includes your current needs, as well as those that might arise in future. Here are five things to consider when choosing an integration provider.

1. Do they meet your technical requirements?

Before beginning the search for an integration provider, it’s important to look inward at your business and its objectives. You need to be clear on what you want to achieve to ensure the provider has an appropriate solution.
  • Who are you looking to exchange messages with? Thousands of trading partners, or just one? Are they suppliers, retailers, customers, a network like eInvoicing or STN (Superannuation Transaction Network)? Where are they based? What levels of capability do they have?
  • What messages do you need to exchange? Procurement messages, finance messages, reports, contracts? Is this likely to expand in future? Can the provider cater for the types you need?
  • What services do you require? An integration and mapping solution, a webform solution, a pass-through solution? A solution to offer to your trading partners? Technical support and expertise?
  • And how much work are you prepared to do? Do you want a completely automated solution with built-in business rules and matching, or are you willing to do some manual work? Do you have resources within your business that will complete some work, or are you planning to outsource it all?
  • How flexible is their technology? Can it expand as your business does? Is it cloud based or installed? Can it cater for all future messages you might want to add down the track?
Once you have everything jotted down, you can rank the importance of the requirements – for example, ‘non-negotiable’, ‘important’ and ‘nice to have’. If you start with outlining your needs, it’ll make the process of eliminating providers much easier.

2. Does their business align with yours?

Make sure their business culture and service offering is right for you. Some companies have a very methodical way of working, whereas others can tailor their approaches to suit each client. Before getting started, discuss how the company would work with you, including what will happen after the solution has been implemented. Establish what level of guidance is needed along the way and be clear on what is chargeable and what’s not.

3. Do they have the right experience?

Do your research into the solutions they’re providing to their existing customers. Niche industries can have certain requirements that others don’t have. Ask the company what industries they have experience in and what challenges your particular industry faces. On the flip side, a company that has experience in various industries can be advantageous; they can apply things learned from one industry to others, and add useful features to their products and services. For example, the highest security required by some of our customers is applied to all gateways, regardless of your industry. Look at the company’s current customers to see if they’re companies you aspire to be like. Are the companies at the forefront of electronic messaging, and for example, excel in their supply chain efficiency? Asking for references is one of the best ways to find out about a company. Have a chat with the provider to see if they can put you in touch with a client or two. Lastly, pick their brains about what’s happening in your industry and in electronic messaging more generally. They may be able to shed some light on upcoming initiatives or changes. After all, technology is ever changing.

4. Does their support model work for your business?

Getting the solution up and running is the first step. But the ongoing support and maintenance is just as important. Think about the following things.
  • What type of support will you need? Do you have an in-house team that can assist with technical enquiries? Or do you need your provider assist with all enquiries?
  • Where is their support located? Do you need support to be based locally or will an overseas support centre suit you? Do you need to be able to phone someone straight away or is email support sufficient?
  • How easy is it for the provider to execute additional requirements? If you choose to add other requirements at a later stage, how long will it take for requirements to be gathered and development to be competed?
  • What are their support processes? How quickly will they respond to your enquiries? How can their support team be contacted? Are they available when you’ll need them?
  • Do they actively monitor your gateway? Is it solely your responsibility or does your provider monitor the gateway for you? Do they have automated monitoring? And can it be tailored to your needs?

5. Is their pricing model suited to you?

Look at the pricing models of the providers you’re considering to see which one suits your business. Find out how the provider charges; is their charging model quite complex? Do they charge per message? Based on data consumed? Number or kilocharacters? Are their plans capped or uncapped? Also look at their charging model for ongoing support. As touched on earlier, be clear about what’s chargeable and what’s not. This will ensure you’re both on the same page and will reduce likelihood of conflict in the future. — These are some of the key things to consider when selecting the right integration provider for your business. Spending time doing this research will pay off; a long, healthy relationship is beneficial to your business and theirs.
EDI

20/01/2017

3 ways to slash your Days Sales Outstanding

Cash may be king, but almost every business faced the issue of extending their clients’ credit, especially in B2B situations. Recent low inflation and interest rates have made it easy for many businesses to ignore the true cost of extending trade credit to clients. Even the most profitable products and efficient workflows can quickly lead to disaster if clients are not paying their bills. Complacency surrounding inefficient invoicing and payment collections can easily turn into write-offs that hit your organisation’s bottom line. Benchmarking and monitoring Days Sales Outstanding, or the more specialised permutations of DSO, form a key part of any analysis of cashflow and receivables. In the end you will need to do more than just hassle your slow-paying clients and call in third party debt collectors. To dramatically reduce your DSO over the long term, consider the following:
  1. Making it easier for your clients to transact 100% electronically with you as a supplier
  2. Segmenting your client base; tailoring credit terms and payment options to client segments
  3. Offering simple carrots for rapid or upfront payment.
While modern ERP and accounting systems are excellent at managing invoicing and payments internally, they don’t address many of the real procurement issues that lead to slow payments. Electronic data interchange allows businesses to automatically exchange information between each other’s ERP systems or key business applications. This offers a very real opportunity to dramatically reduce the amount of human intervention required in the end-to-end sales-to-payment process. A key issue that leads to slow or disputed invoice payments is incorrect or missing information. By shifting to EDI or eInvoicing with your trading partners data entry errors are almost entirely eliminated. You’ll also achieve more timely visibility into supply chain and invoicing issues. Ideally, if you want to slash your DSO in the longer term, you should focus on continuously reducing the end-to-end friction of doing business with clients. While you are likely to always need to extend trade credit to regular clients, you can reduce procurement and invoice related delays and overheads for both you and your client. By improving your competitiveness and efficiency, you will have much more flexibility when deciding how you want to optimise your trade credit terms and margins.
EDISuppliers
EDI

06/12/2016

What is electronic data interchange (EDI)?

We get a lot of questions from people who have been asked to trade using EDI, what it actually is. Put simply, electronic data interchange is the electronic exchange of structured data, or messages, between business applications. The aim of EDI is to minimise manual labour, ensure accuracy, speed up the exchange of messages and gain visibility into the trading process. Many large organisations, particularly retailers or those with a large supply chain, utilise EDI to streamline their processes and save costs. To better understand EDI, its use and benefits, let's look at an example of a typical exchange without EDI:
  1. A retailer enters a purchase order in their ERP system.
  2. The retailer sends that purchase order through email, post or fax to the supplier.
  3. The supplier validates the purchase order to ensure that all required information is provided and they have stock on hand.
  4. The supplier enters the purchase order into their ERP system or accounting package.
  5. The supplier sends a purchase order response to the retailer by email, post or fax.
  6. The supplier picks and packs the order and sends a despatch advice.
  7. The supplier enters the invoice into their application and sends it to the retailer.
Imagine the time, money and data entry errors involved in this process. What if we could just connect the ERP systems or accounting packages of the retailer and supplier? Well that’s what EDI does. If two organisations are connected via EDI, the flow of messages is completely automated:
  1. The retailer enters a purchase order into their ERP.
  2. A map can be built in the gateway to convert the message into the format needed by the supplier, like an XML, EDIFACT, iDoc, flat file or CSV.
  3. The purchase order is sent to the supplier’s application, where they can run validations. If the validation is successful, the purchase order appears within second of it being sent.
  4. A despatch advice is generated in the supplier’s application and sent via EDI to the retailer.
  5. An invoice is generated in the supplier’s application and sent via EDI to the retailer.

What are the benefits of EDI?

From a financial standpoint alone, EDI can lead to huge cost savings for organisations. There’s the time staff spend on data entry and chasing up issues, the improved cash flow because invoices are received sooner, accurate data always being on hand and much more. Let’s look the benefits in greater detail.

Cost savings

A lot of paper and printing is involved in traditional transactions. There's also the storage, filing, reproduction and document retrieval. All these processes involve labour costs, which EDI can significantly reduce. Studies have found the implementation of EDI can remove 90% of invoicing costs. Errors are another issue. Manual data entry comes with inherent data issues because of the high number of processes involved. An EDI solution reduces these manual processes drastically, reducing the likelihood of errors and removing the cost of following up the errors.

Increased speed and data accuracy

EDI can speed up trading cycles dramatically. Instead of waiting days to receive an invoice, you can receive it in seconds of it being sent. Data quality also improves when you implement EDI; studies show that it can reduce transaction errors by as much as 40%. There's also a reduced number of lost faxes and mail and less data entry errors.

Greater efficiency

One of the key draws of EDI technology is the automation of otherwise-laborious processes. EDI enables staff to spend their time on higher-value tasks, rather than data entry. The near-real-time visibility that EDI provides also helps companies achieve fewer stock-outs and fewer cancelled orders.  It’s near-real-time nature also allows organisations to track the trading process and be confident to make decisions based on the information available.

Newsletter

Sign up to get the latest EDI updates

Stay up-to-date with industry news, useful blogs and whitepapers, expert tips and more.

EDI