13/12/2019

The benefits of EDI: an infographic

Electronic data interchange, or EDI, is widely adopted around the world by companies looking to gain efficiencies, visibility and cost savings. But if you’re new to the concept, it can seem overwhelming. 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! But what are the quantifiable benefits of EDI? We’ve gathered some data to explain the benefits at a quick glance.

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

15/08/2019

EDI for suppliers: What option is best for my business?

Picking up a new retail client can be such an exciting time. But some of their requirements can seem daunting when you’re facing them for the first time. One of the things retailers often ask is for their suppliers to trade with them via electronic data interchange, or EDI.

What is EDI?

EDI is the electronic exchange of business information, like purchase orders and invoices. This information goes straight in and out of the retailer’s software. It’s of benefit to the retailer because it’s more efficient than paper or PDFs, it gives them real-time visibility of their purchases and products, and it reduces costs. You can find out more about EDI in this whitepaper. For suppliers, it’s important to be aware of your options when it comes to EDI and to choose the best option for your business.

What are my options?

EDI webforms

The simplest solution for compliance is EDI webforms. 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. EDI webforms has a number of benefits:
  • No establishment costs
  • It’s easy to set up
  • It has an easy-to-use interface
  • You can trade with many retailers from the one portal
  • It’s accessible anywhere with internet
  • It’s cost effective.
  • No support cost.

EDI gateway

A more automated option is an EDI gateway. The fully integrated solution exchanges information with your customers directly to and from your ERP or accounting software. This option has the least impact on your current process and requires minimal manual processing because it takes the data from your software to send EDI documents to your customers. To gain even more benefits from your EDI gateway, it can be used to update other systems in your business. For example, when an order is despatched to one of your customers, it can automatically update inventory levels in your warehouse management system. This information can even be sent via EDI to your partners to keep them up-to-date with your inventory levels. Some of the benefits of using an integrated solution include:
  • using your existing software
  • no need for data re-entry
  • automating your manual processes
  • improving data accuracy
  • faster order processing.

Which option is right for my business?

It is important to choose an option that:
  • sets your business up for future adaptability
  • reduces the costs imposed on your business provides the most value.
There are a number of factors that you need to look at when deciding what EDI option is best for you, including:
  • The amount of orders you receive, the number of products you sell and the amount of information that is required from your customers As these factors increase, so does the amount of manual inputting you will be required to input into each form
  • The functionality of the software you currently use in your business For example, if you retailers require an advanced shipping notice with SSCC labels. Can your software produce these?
  • Your strategic goals For example, if you want to integrate with other systems or automate other business processes.
Use this table as a rough guide when deciding on an option for your business.[vc_column_inner width="1/2" css=".vc_custom_1565317545162{padding-top: 0px !important;background-color: #00b7f1 !important;}"]

Consider EDI webforms if…

[vc_column_inner width="1/2" css=".vc_custom_1565315132956{padding-top: 0px !important;padding-bottom: 0px !important;background-color: #1b75bb !important;}"]

Consider an EDI gateway if…

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

You trade with a small number of retailers

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

You trade with a large number of retailers

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

You receive roughly 30 or less orders a week

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

You receive more than roughly 30 orders a week

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

You sell a limited range of products

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

You sell a large range of products

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

Your customers don’t require too much data

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

Your customers require a substantial amount of information

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

Your software can’t generate the information required by your customers

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

You want automated processes

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

You’re just starting out with EDI

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

You don’t want to double-enter data

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

Interested in implementing EDI for your business? Get a free consultation from one of our EDI experts.
EDISuppliers

14/05/2019

Costs of manual vs EDI procurement: A comparison

Placing orders

Think of a company that issues thousands of purchase orders a month. They’ll likely receive at least one invoice for every purchase order issued. Let’s look at the process for this simple scenario:
Buyer manually enters the purchase order in their software Buyer sends order to supplier via email Supplier manually enters the purchase order in their software Supplier manually enters the invoice in their software Supplier sends invoice to buyer via email Buyer manually enters the invoice in their software
Some organisations have put a price on manually processing a single invoice in the ballpark of $30. Some of the costs associated are:
  • Paper
  • Postage
  • Printing
  • Filing
  • Labour – This includes staff working on the processing of the transactions.
  • Error checking costs – Manual processes create errors and these errors can add costs to your business in order to correct them. This isn’t just additional labour hours to correct the issue. If the wrong number of goods to be sent is incorrectly inputted, it could lead you having an under supply or over supply of goods required.
Now let’s compare this process with 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
As you can see from the diagram the process is reduced and streamlined because of the EDI automation. The amount of manual inputting is reduced, saving time for your account team. Connecting partners’ ERPs reduces or eliminates the need for postage, filing and printing and paper costs. This scenario is just one of the steps in the procurement process. Other messages can be exchanged to automate other steps, such as:
  • Purchase Order Change – sent by buyer to supplier if the original purchase order has been changed.
  • Purchase Order Acknowledgement – sent by supplier to buyer to acknowledge receipt of the order.
  • Purchase Order Response – sent by supplier to buyer to notify them of any responses or changes to an order.
  • Advanced Shipping Notice – sent by supplier to buyer to let them know when and how goods will be shipped.

Receiving goods

When receiving goods from suppliers, a team is needed in the warehouse ready for the order to be delivered. Using a manual procurement process, it is hard for the receiving team in the warehouse to know what will be in each package sent or how it is packaged. It is also difficult for them to know when it will be sent. Once the delivery comes in, items need to be checked off manually and inspected to ensure no goods are damaged. This is sometimes done with pen and paper on a clipboard. This information then needs to be inputted into the ERP system or sent separately to the accounts team. Costs associated are:
  • Labour costs – accounts team and receiving team.
  • Stationary – paper, pens, etc.
  • Any errors occurred during this process.
With EDI, this process is simplified and more streamlined. Before goods are shipped by the supplier, they can send an Advance Shipping Notice (ASN) to the buyer. This details what is being sent, how it is being sent and when it is expected to arrive. The buyer can then prepare their warehouse with the right personnel and equipment to accept the goods once they arrive. This reduces labour costs and increases productivity. The supplier can also generate SSCC labels on the individual logistic units sent to the buyer (e.g. pallet, carton, container). This can be scanned by the receiving team, automatically sending the information to the buyer’s ERP.

Preparing payments

Once your goods have been received, any discrepancies are raised and need to be rectified before payment is made. This is often done using three- or four-way matching. Some of the discrepancies that may arise in the matching process are:
  • Inaccurate quantities received or invoiced
  • Incorrect prices
  • Received (including damaged) goods.
Typically, matching requires three documents to be reviewed:
  • Purchase order – confirms the order has been made
  • Receiving advice – details what has been received and the condition of the goods
  • Invoice – sent by the supplier requesting payment.
The accounts payable team collects and reviews each of these documents for the quantities, prices, and payment terms. This can be quite time consuming as this information can be in the form of paper documents, emails, faxes and PDFs; all stored in different places. Documents can also be lost or misplaced causing further delays to payment potentially missing discount opportunities. With EDI, the process is faster and more simplified. All required information is sent directly to your software via EDI. It can then be programmed to automatically match the information and identify discrepancies. If an issue is detected during matching it is filtered to be investigated by your accounts team. All successful matches are processed and scheduled for payment; no need for manual processing and paper-based documents, saving you money and time. Interested in implementing EDI for your business? get a free consultation from one of our EDI experts.
EDIRetailersSuppliers

08/04/2019

EDI more than just automating your supply chain

Looking for ways to improve processes is critical to any business, particularly in the areas of efficiency and cost reduction. Electronic Data Interchange (EDI) allows the exchange of business information directly between the software of your business and your customers and suppliers. It automates unnecessary manual processes while streamlining supply chain transactions. Companies commonly implement EDI to:
  • Gain better visibility into the supply chain
  • Reduce errors in exchanging paper or PDF documents
  • Reduce costs
  • Increase information security.
Let's have a look at these benefits in more detail.

Gain better visibility into the supply chain

With a manual purchase order and invoice, can a buyer answer questions like:
  • Can the supplier fulfil my order?
  • When will the goods be shipped?
  • When can I expect my goods to arrive?
  • What is in each package I am about to receive?
In short, no. But all of these questions can be answered through other EDI messages exchanged in near-real-time. Often companies will exchange more than just a purchase order and invoice; they’ll exchange purchase order responses (which tells a buyer if the supplier can fulfil the order), advanced shipping notices (which tells the company how the shipment is packed and when it will arrive) and more.

Reduce errors in exchanging paper or PDF documents

Traditional procurement has many manual processes that are prone to error. Human mistakes occur for a number reasons including:
  • Inputting incorrect numbers or values
  • Missing or skipping key steps in the process
  • Transferring the wrong purchase order information
Here is an example of traditional procurement for a PO to Invoice process:
Buyer manually enters the purchase order in their software Buyer sends order to supplier via email Supplier manually enters the purchase order in their software Supplier manually enters the invoice in their software Supplier sends invoice to buyer via email Buyer manually enters the invoice in their software
With EDI, processes are automated reducing manual errors. For example, when a buyer places a purchase order (PO), it can automatically trigger an acknowledgement to let the buyer know it’s been received, and the order can be put into the supplier’s system. Here is an example of EDI procurement for the same process as above:
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
When the supplier is ready to ship the order, an advanced shipping notice (ASN) can be created and sent to the retailer to advise them of delivery. This can include information like how it’s packed, when it’ll arrive, the shipping company and more. The supplier can the raise an invoice in their software, which can be sent automatically to their customer’s software. Without EDI, all these processes would require manual creation greatly increasing the risk of errors.Through the use of EDI many areas of the supply process are completed with no additional manual inputting of information. Want to learn more about EDI? Download our introduction to EDI whitepaper.

Reduce costs

In low-margin businesses, reducing costs is critical. Think of a company that issues thousands of purchase orders a month. They’ll likely receive at least one invoice for every purchase order issued. Without EDI, that’s a lot of manual handling. Some organisations have put a price on manually processing a single invoice in the ballpark of $30. You can see how it adds up! EDI vastly simplifies the supply chain process through automation. Some examples of costs reductions are:
  • Manual data entry costs: EDI automates many manual data entry processes, reducing the amount of labour required.
  • Transaction costs: No physical sending of documents to your partners reduces costs related to printing, postage and filing.
  • Receiving and shipping related costs: By receiving shipment information from suppliers prior to delivery, you can prepare in advance for receiving goods. By streamlining the receiving process, you can achieve reductions in labour costs.
  • Error correction costs: Errors in the supply chain can result in extra costs being incurred. With the elimination of manual steps in your processes, errors are reduced. If errors do occur, they can be found and corrected much faster.

Increase information security

In today’s business environment, information security is a prominent issue. Sending sensitive information through unsecure channels can add risk to your business. You could be sending these via email, post or even SMS, which can easily be sent to the wrong person or even intercepted. EDI can send this information more securely than conventional methods. Using secure message communication types such as Secure File Transfer Protocol (sFTP) or AS2 decreases your risk. EDI adds a layer of authentication to the process which is required for the information to be sent. It also limits the connection to specific partners reducing the risk of your sensitive business information being sent to the wrong recipient.

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

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

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

16/11/2016

5 tips for speeding up your supply chain

More than ever before, it is becoming absolutely business critical to focus on extracting the best possible performance and efficiencies from your supply chain. Quick delivery, item traceability, and courteous service are now baseline expectations. To lift performance of any system, you need to determine not only your end-to-end performance, but also identify bottleneck points. The maximum throughput capacity at your bottlenecks will fundamentally impact your overall supply chain performance. In addition to specific bottlenecks that might need more capacity or faster processing speed, you should also aim to lift overall supply chain performance and capacity by implementing systemic improvements and adjustments to workflows. Here are 5 tips for systemic improvements that can help you dramatically lift overall supply chain performance.

1. Cross Docking

For situations where your supply chain involves distribution to a large number of regular locations, a cross-docking terminal used as a distribution hub can lead to a dramatic improvement. Items enter the cross dock on one side and only briefly remain in the dock before being loaded directly to outbound transport on the other side. The result can be lower lead times, less handling, lower transport costs, and more efficient transportation.

2. Data quality

Shipping, invoicing, and payments require large amounts of documentation. Data quality problems can quickly lead to shipping errors, mis-allocated inventory and unpaid invoices. Serial Shipping Container Code (SSCC) labelling can be used to electronically track any “package” of items within your supply chain, providing trace-ability. Electronic Data Interchange (EDI) gateways and cloud-based services allow the secure, automated exchange of eInvoices and shipping documentation with both suppliers and customers. These technologies can also be directly integrated with ERP systems and other business software systems, ensuring no human data entry is required, eliminating most data quality problems and removing paperwork-based bottlenecks.

3. Carrots and Sticks for suppliers

Contractual KPIs can be used to improve performance by making adjustments to timings of supplier deliveries. This is common practice for large retailers to reduce delivery lead times and therefore the amount of inventory held, while ensuring predictability in the supply of goods.

4. Real-time visibility and analysis

Technologies such as scanners and Internet of Things (IoT) sensors are able to generate a huge amount of real-time data regarding the flow of items within your supply chain. Up until recently, many organisations still used “batch” data collection and reporting, which effectively meant that it was only possible to detect problems in the rear-view mirror, hours or perhaps days afterwards. For many organisations, real-time (or nearly real-time) access to datasets can allow better traceability and customer service for clients, in addition to making it possible to apply predictive analytics to detect and avoid problems before they cascade into bigger issues. There's a common misconception that EDI is slow and outdated, but new transmission protocols allow companies to view their data is near-real-time.

5. Multiple supplier strategies

Whenever possible, ensure there is competitive tension for key items in your supply chain. While this may seem a little like a procurement issue rather than a supply chain issue, real-time supply chain visibility offers the chance to have automated trading strategies which adapts sourcing as supply chain issues occur – without human intervention.
EDI

02/11/2015

Supply Chain Week 2015: What We Learned

It’s been a huge two weeks as a Gold Sponsor of GS1’s Supply Chain Week. There were many great topics, but here are a couple of our highlights:

Data and omnichannel retailing

Now is an interesting time for brands, because we are increasingly seeing them compete with their customers. Consumers can purchase runners from a Nike store, but they can also purchase them from Rebel Sport. They also have the added choice of viewing and buying in store or online, or a combination of both. With omni-shoppers now spending 350% of what their bricks and mortar counterparts spend, companies are now more than ever looking to give their customers a unified experience, and one that sets their brand aside from the rest. As customers demand enriched information, having clean and accurate data can really help boost a brand’s omnichannel strategy. In this age where everything is just a click away, if customers can’t find something from you, they will find it from your competitor. The importance of data doesn’t stop at the product though. Customers expect to see information about the product and your service; stock level, returns policies, delivery tracking and more. Having the data customers want, when they want it, is now an essential of a business’ omnichannel strategy.

End-to-end supply chain visibility

A huge part of the supply chain is visibility. Companies want to be able to track goods so they can plan and manage issues that may arise in the transportation process. This not only provides the company with smoother processes, but enables them to give superior customer service. GS1 has been driving the new supply chain industry standard, EPCIS (Electronic Product Code Information Services), which defines the standard message set for data capture and exchange about a product. Unlike regular product data, EPCIS holds information about the movement and status too — the what, where, when and why. The introduction of this new standard will mean a big shift for the industry and GS1 is aiding this by providing a centralised system where manufacturers, distributors and retailers can register information about their products and retrieve them as required. EPCIS is a big move for the supply chain industry, which has seen little development in recent years. Speak to us to find out how we can help your omnichannel strategy or implement EPCIS in your business.
EDI