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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E-invoicingEDIRetailersSuppliers

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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E-invoicingRetailersSuppliers

26/06/2020

The benefits of eInvoicing for businesses: An infographic

eInvoicing automates the exchange of invoices directly between businesses’ software and its use is growing across the globe as a result of the benefits it brings. Australia and New Zealand have joined forces to to make trans-tasman eInvoicing easier using the internationally-adopted Peppol eInvoicing framework. Any business within this network can now send and receive invoices straight from their accounting software to their customer's software. No more emails, no more PDFs and no more manual data entry. If you're new to eInvoicing, check out our blog, traditional invoicing and eInvoicing: a comparison. Here are just some of the reasons businesses are turning to eInvoicing.

For buyers

A major benefit for those receiving eInvoices comes from the fact you'll no longer have to manually enter an invoice again. Think of the time savings and the mis-keying errors that'd disappear. Here are some stats:

For suppliers

A major benefit of eInvoicing is the speed of it. It can ultimately lead to faster payments, which means better cash flow for you. Let's have a look:

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E-invoicingRetailersSuppliers

15/05/2020

5 ways to make savings in your business when times get tough

A lot of us have had a chuckle at this meme:But it’s no joke. It’s times like these that often spur us into action. Whether you’re looking for ways to overcome the current economic downturn, prepare for the next one or you’re just looking for ways to reduce costs, have a look at these five things you can do to make savings:

Automate your supply chain

If you’re still emailing orders and invoices, you’re probably doing more data entry than you need. It might look like this:
  1. Buyer manually enter purchase order in their software.
  2. Buyer send order to supplier via email or post.
  3. Supplier receives order and manually enters the purchase order details into their software.
  4. Supplier manually enters the invoice into their software.
  5. Supplier send invoice to buyer via email.
  6. Buyer manually enters the invoice in their software.
This is where EDI can help. EDI connects your software with the software of your partners, automating most of the process. Here’s the difference:
  1. The buyer enters the purchase order in their software.
  2. It’s automatically sent to the supplier and appears in their software.
  3. The supplier actions the PO and then creates the invoice in their software and sends back to the buyer.
  4. The invoice then appears in buyer’s software.
This can save your staff a lot of time, allowing them to work on more high value tasks. It helps suppliers process and send invoices faster, which can improve cash flow. For buyers, invoices can be processed faster and some suppliers even offer discounts for early payments. The automation from EDI can also generate significant cost savings for businesses. Manual data entry errors and the costs associated with fixing them are also reduced through automation. Suppliers can send shipment information through EDI, allowing buyers to prepare in advance and better allocate their warehouse staff and resources. This can reduce receiving costs, particularly labour, for buyers. Check out our blog for more information.

Automate your accounts payable

Often errors are made by incorrectly entering invoice data. Not only does it stop staff from working on higher value tasks, but it can be costly to rectify the errors. EDI makes it easy to implement two- or three-way matching. Two-way matching involves automating the process of checking invoice quantities and values against that on the purchase order. Three-way matching goes one step further and also checks delivery information to verify the invoice is for the same quantity that’s been sent. It not only saves your team time, but can also reduce labour costs.

eInvoicing

eInvoicing allows you to send invoices directly from your software to your partners’. It uses the international Peppol standard to send and receive eInvoices. It’s different from EDI in that you only need to connect to the Peppol network through an Access Point to you can exchange eInvoices with anyone else in the network. eInvoicing produces savings by:
  • Reducing the amount of work required send invoices. This reduces costs and allows your accounts receivables teams to focus on value adding activities.
  • Helping increase cash flow for suppliers by speeding up the preparation and sending of invoices.
  • Helping buyers speed up their payment processing, allowing them to make good on early payment discounts.
Want to learn more about eInvoicing? Check out this blog.

Automate goods receipt

Receiving goods from suppliers can be a time-consuming process. It can be difficult to know when goods will arrive and therefore can be difficult to plan. This only wastes time, money and resources. A way to make savings in this area is to ask suppliers to send you advanced shipping notices (ASNs) directly to your software through EDI. ASNs detail what your supplier is sending, how it’s packed, when it’ll arrive and more. This allows you to prepare to have the right warehouse staff to receive the shipment, saving you money on labour and allowing you to allocate staff more efficiently. Receiving ASNs from suppliers will also allow you to automatically record stock as it comes in. SSCC labels (the barcodes on each unit your supplier sends) correlate to a unit (e.g. a box or container) on the ASN. Scanning each pack as it comes in reduces manual inputting, saving your warehouse team time and reducing the risk of costly inputting errors. It also means your stock levels will always be up-to-date.

Consider alternative models with suppliers

A large cost for retailers can be for warehousing and logistics and that’s why savvy retailers are turning to drop shipping. The drop shipping model sees the supplier hold stock. When the retailer makes the sale, they pass the details onto the supplier to ship the order to the customer. EDI can create even more efficiency in this model by:
  • Sending orders directly to suppliers when the order is placed
  • Reducing errors and the related costs
  • Keeping you updated on suppliers’ stock levels, helping you avoid shortages of goods.

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E-invoicingEDIRetailersSuppliers

08/05/2020

Portal to integration: Why switch?

Suppliers have two main ways to comply with their retailers’ EDI requirements: EDI webforms (web portal-based EDI) or integrated EDI. Portal or web-based EDI is often the go-to choice for suppliers just starting out. EDI web portals They’re usually easy to setup and simply use a web browser to send messages to your retailers. The process normally looks like this:
  1. You receive the order to your EDI portal
  2. You send the order details to your warehouse team to prepare order
  3. You then manually enter the purchase order response (this lets the retailer know what you can fulfill)
  4. Once the order is finalised, your warehouse team prepares the advance shipping notice (ASN – this lets the retailer know what’s being shipped, how and when)
  5. You send the information to your accounts receivable team
  6. Your accounts receivable team input the information into their software to prepare the invoice.
If you receive a lot of orders, this process requires a lot of manual inputting, which is time consuming and error-prone. Integrated EDI Integrated EDI simplifies this process through automation, eliminating manual reinputting.
  1. You receive the order in your existing software automatically which you can send to your warehouse team. If you have a warehouse management system (WMS) and integrate it to your ERP software then the order can be automatically sent to your warehouse team.
  2. Once your warehouse team check your inventory, you can then send a purchase order response (POR) back to the retailer. The POR is prepared using the existing information from the original order. You can also automate the sending of the POR by integrating your WMS with your ERP software to send PORs without inputting anything.
  3. You then manually enter the purchase order response (this lets the retailer know what you can fulfill)
  4. Once the order is prepared and ready for shipping, you can then send an ASN to the retailer. If you use an WMS, you can integrate with your ERP and automate the creating and sending of the ASN. An invoice will then be automatically sent to the retailer using the information from the POR.

Why do suppliers switch to integrated EDI?

There are a number of reasons why business switch to EDI:
  • You can use your existing software
  • There’s no need for data re-entry
  • You can automate manual processes
  • It improves data accuracy
  • It helps with faster order processing.

Making the decision: EDI web portal or integrated EDI?

There are a few factors to look at when deciding if integrated EDI 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 your software For example, if your retailers require an advanced shipping notice with SSCC labels. Can your software produce these? We go through this a bit further in this blog.
  • Your strategic goals For example, if you want to integrate with other systems or automate other business processes.
Use these points as a rough guide to know when to consider integrated EDI.
  • You trade with a large number of retailers
  • You receive more than roughly 30 orders a week
  • You sell a large range of products
  • Your customers require a substantial amount of information
  • You want automated processes
  • You don’t want to double-enter data
  • You need a flexible solution that grows as your business does

How to get started

There are a few things you can do to prepare for the switch to integrated EDI.

Who should be involved?

To get buy in from your business you’ll need to get relevant departments involved. These include:
Management
Often will be the first you need to get involved. Make sure to calculate your cost savings and ROI with your current:
  • costs of processing orders
  • costs of rectifying order mistakes
  • costs of resolving disputed/returned shipments
  • costs of producing invoices
  • costs of resolving disputed invoices.
For more information on calculating costing savings and ROI check out our whitepaper.
Information Technology
To get buy in from your IT team, you should think about these things:
  • Will they need to buy or install any new hardware or software? Some solutions require new hardware or software to be installed. Here at MessageXchange, we don’t require our customers to install any new hardware or software. We simply connect to your existing software.
  • Will they need additional resources to implement EDI? This is dependent on the EDI solution you use. With our technology, your software only needs the ability to import and export messages and exchange them via a secure connection protocol. Check with your IT team whether they can currently do this. If not, what resources will they need?
  • Does the provider adhere to your security policy? IT teams are often aware of security risks to your internal systems. Put their mind at ease by showing what measures your EDI provider takes to keep your data secure. MessageXchange is ISO 27001 certified and having developed the software from inception, owns its intellectual property.
Finance
Another department that’s processes are influenced by EDI is finance. It’s important to not only show the savings EDI can make for the business but also the reduction in manual processing, leading to:
  • improved efficiency, allowing staff to work on higher value tasks
  • fewer errors: less time and costs to fix mistakes
  • reduced costs: no need to printing and archive paper invoices.
  • more accurate data for decision making.

The nitty gritty

Before implementing integrated EDI, you’ll need to think about these things: Who are you trading with and what messages do you need to exchange? Retailers will often send you information packs to get you started with EDI that will include the messages they need you to exchange. It could be purchase orders, purchase order responses, advanced shipping notices, invoices and more. Ask your retailer or speak to your EDI provider if you don’t know what’s required. Next, you’ll need to know the file format you’re required to exchange: This is likely to be EDIFACT D01B or D96A or XML. If you don’t know what your retailer is expecting, have a chat to your contact there or your EDI provider. You’ll also need to find out what your software is capable of, in relation to:
  • The documents your software can use. For example, if your customer requires an advanced shipping notice and SSCC labels does your software support that?
  • The file formats it can import and export, like XML or CSV.
  • The connection protocols it accepts, like sFTP or API.

Our process

We try to make our process as simple as possible for businesses:[vc_column width="1/4" css=".vc_custom_1588897810318{padding-top: 0px !important;padding-right: 10px !important;}"]

Let us know what you want to achieve and we’ll suggest the best solution

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Start our partnership

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EDISuppliers

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.

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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…

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Consider an EDI gateway if…

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You trade with a small number of retailers

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You trade with a large number of retailers

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You receive roughly 30 or less orders a week

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You receive more than roughly 30 orders a week

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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

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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

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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

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You’re just starting out with EDI

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You don’t want to double-enter data

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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.

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EDIRetailersSuppliers

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.

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EDIRetailersSuppliers

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