EDI, standing for Electronic Data Interchange, is the electronic transaction of business data between business partners that follows a standardised format. EDI facilitates the ability for one business to send information to another. Many business documents are transacted through EDI, however the two most common are purchase orders and invoices. The expenses incurred with traditional business communication (mail handling, paper, reproduction, filing, storage and retrieval) are effectively eliminated, and EDI has been found to reduce associated administration costs by at least 35%.

Why should my business use EDI?

Another benefit of using EDI over traditional transaction methods is the elimination of data entry errors. This further reduces your cost of doing business, and frees up your staff to perform higher value tasks. The real-time nature of EDI also allows increased visibility which allows for more strategic business decisions. Consequently the reduced order processing and delivery times allow for reduced inventory levels. With less inventory on hand, there is less precious capital tied up in product and more cash-flow.

As a business grows and begins trading with bigger customers, they may quickly find that their trading partners require them to transact with EDI. In order to be compliant with these types of customers, small businesses may be provided with an EDI web portal to make or receive orders. When starting out your business may be able to shoulder this administrative burden, but it does not make for a scalable process. Thankfully with the right technology EDI can be implemented into your business processes, and you too could reap the benefits.

ALTSHIFT is a consultancy firm that implements cloud business solutions, and consequently we have also done a wide array of EDI connections as part of bigger cloud ERP projects. If you are thinking about scaling up your business but not sure whether your systems stack is up to the task, get in touch with one of our experts for a consultation.