EDI (Electronic Data Interchange) can be defined as being an electronic interchange of various business information with the use of a standardized format. This process allows the company to easily send information to any other company through an electronic channel, as opposed to using paper. A business that does a lot of work electronically is normally referred to as being a trading partner. An EDI company provides the software needed for the communication channels to be set up.
There are countless different business documents that can easily be exchanged with the use of EDI software. However, the two that are really common are invoices and orders. At the bare minimum, EDI can replace mail preparation and the handling that is associated with the regular business communication channels. Even so, the true power behind EDI is important: it standardizes all the information that is communicated through business documents. This is vital since it creates a truly paperless exchange.
Just think about the regular invoice every business uses these days. Companies often create these invoices with the use of a computer. Then, they print an invoice paper copy so that it can be mailed or directly handed over to customers. After being received, customers mark up invoices and then enter them right into the computer system that they use. We are faced with a clear transfer of data from the computer of a seller to a computer of the customer. EDI helps by minimizing manual steps or completely removing them.
EDI advanced a lot in the past few years. The software used these days makes a huge difference in business operations. For instance:
- Traditionally, an exchange of documents takes days. With EDI the process can be done in just a few hours.
- After the customer receives the invoice and pays it, there is a need to confirm this with the seller.
The truth is that there are huge differences between traditional exchanges and EDI exchanges. We are looking at something that is really fast and that can streamline the entire process.
The only problem with EDI is that both companies involved in a transaction need to use the system. There can be differences between the formats used but the vital aspect is the use of EDI, which is not as common as you might believe at first glance.
To sum up, you need to seriously consider contacting an EDI company. A specialist can easily help you to streamline business operations. Management becomes a lot faster and it is a certainty that your accountant is going to thank you for the addition that you made. It is always important to minimize the time that is spent on business operations that are not producing money. These transactions are among them.
Using EDI helps you to easily make operations faster, so you should consider the opportunity that is available right now. Just make sure that you compare all the different EDI companies that you can work with and see which one is the best for you, based on what is offered.