Electronic Data Interchange (EDI) is an electronic exchange of business data presented in a standardized way. EDI can also help companies decrease error rates and improve accuracy. EDI is something a lot of folks like to talk about, but in practice, it can be a bit difficult to separate the facts from the jargon. With Sage 100, your purchase orders can immediately become sales orders. Sage 100 is innovative and EDI ready. Why do you need EDI? Keep reading to learn more.
Higher accuracy rate
When you use a traditional approach, data is inputted manually in many places. Some of those you may have control over, but others may be outside of your oversight. This can lead to errors creeping in multiple ways:
- The data entry is done manually and so some mistakes are inevitable.
- Different nodes in the network use different input measurements without anyone realizing, for example, some measurements are in inches and some are in centimeters (this caused the loss of a NASA orbiter).
- Not all parts of the network interact perfectly, so some data will be entered in silos which is not visible in other ones.
- Some data is not entered, for example, because paperwork is misplaced, and no one realizes or keeps track.
Some of these problems may be quite minor. Yet, others can cause all sorts of problems, from huge financial losses to misses in production schedules. EDI reduces the risk of human data entry error, and it also ensures that the different nodes in the network are automatically connected to each other in the right way. As a result, accuracy is greatly improved.
With lower data entry costs, you would immediately expect labor costs to be cut as there is less need for manual labor. That is definitely a benefit of EDI.
In addition, EDI can also save costs in other ways. One cost saving is that you can strip out redundancies from your business processes. For example, EDI allows you to keep a closer eye on the inventory in your warehouses.
That makes it easier to identify areas where there is too much or too little stock. It also lets you spot the bottlenecks where a failure to fulfill orders or need to pay rush prices for product costs more money than is available in the budget.
So, simply by offering access—and an overview—of what is currently happening in your organization and its processes, EDI can present you with significant cost savings.
Speeds up processes
No one likes to wait longer than normal for a bill to get paid. Still, businesses are often used to chasing customers for payment.
EDI can help with speedier bill payment and invoicing. It enables this by cutting excess time out of other business processes which otherwise slow down bill payment. You probably recognize some of these from your own organization, including:
- Individual financial documents need to be manually passed by multiple parties, instead of being visible at the same time through a single platform.
- Paper-based payment is subject to delay based on bank clearing schedules.
- It is easier for multiple invoices or payments to be combined, saving bank costs.
When you implement EDI into your Sage 100 system, you can quickly and conveniently get rid of all the bottlenecks preventing quick payments.
Makes the supply chain more transparent
One of the challenges of being involved in a complex supply chain is that – like any chain – it has multiple links. With an eye on only one of the links, it’s difficult to know what is happening with the others. At the same time, your supply partners may feel equally frustrated on their side as they also have limited visibility.
Think of having the ability to share real-time inventory with your prospects and clients through your Sage 100 system. When a prospect is ready to place an order, you will always have stock information available at your fingertips.
EDI can improve supply chain efficiency by providing more transparency. People, in different parts of the supply chain, can see instantly what is going on in real time. They can then adjust their input so that you avoid product runs, excess warehousing charges, expedited shipping fees, disappointed customers and all the other costs which come with an inefficient supply chain. Specific examples include:
- Just-in-time inventory management can cut costs.
- More eyes are focused on possible shortfalls, so any necessary alerts will be pushed sooner.
- Staff and resources can more easily be allocated to the right link, at the right time.
- Automatic data exchange means there is no delay caused by lack of information from a partner in a different time zone or on vacation.
These are significant benefits of EDI. A smoother supply chain works to everyone’s advantage, both financially and in terms of satisfaction.
Security of information
Have you ever thought about where the information in your supply chain ends up? Maybe you guard commercially sensitive information carefully. Nonetheless, security is only as strong as the weakest point in the system. If your driver, supplier, stock person, or any other employee are printing out documents and throwing them trash bins without shredding them, vital information about your business could be at risk.
Corporate espionage is not just a thing of the past – it is growing in scale and costs businesses hundreds of billions of dollars a year.
On the other hand, EDI offers a consistent standard. For instance, every employee with access is subjected to standardized security protocols. There is also less need for hard copies of information, which means less paperwork lying around.
Sage 100 EDI Integration by TrueCommerce
TrueCommerce is the only EDI solution exclusively endorsed and distributed by Sage for Sage 100. This web-based integration makes it simple and affordable to comply with your customer’s EDI requirements.
TrueCommerce EDI solution connects you with your greatest business opportunities now and into the future by delivering easy to use, robust, and scalable EDI solutions.
- Flexible, Customizable, Fully Integrated Solution.
- Fully Automated Solution Transforms Your Business Processes.
- Built-in Process Controls Reduce Transaction Errors.
- End-to-End EDI Solution from a Single Trusted Source.
In your personal life, you probably appreciate how digital technology such as your smartphone saves you time and money while making it much, much easier to organize your life. These same benefits are available at the business level through EDI. Your company can become more efficient, save money and reduce redundant paper trails, while delivering better results.