EDI electronic data interchange technology can optimize the operations of every department within a company. This is made possible by applying it to any type of document exchanged between the partners in a commercial relationship (orders, invoices, delivery notes, etc.).
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- What is EDI?
- What is an electronic invoice?
- What is GS1?
- What is the eIDAS Regulation?
- What is PEPPOL?
- What is an Electronic Signature?
What are the main EDI applications?
EDI makes the operations of the sales, purchasing, administration and finance departments more agile and efficient.
As a work system, “Electronic Data Interchange” is designed to automate the integration of your commercial documents in the ERP or Internal management System. The greater the number of commercial partners (customers, suppliers, logistics operators, etc.) and EDI messages interchanged, the greater the benefits.
These benefits translate into considerable cost reductions which, depending on the scope of implementation, can be as high as 90% compared to the same process carried out with documents sent and received by mail, fax or email.
Some of the main EDI applications are summarized below along with the benefits for the companies that integrate these electronic messages into their standard management.
Integration of orders with EDI (ORDERS)
Purchasing departments must dedicate significant resources to generate, send and track the purchase orders sent to their suppliers. For suppliers, processing and recording these orders in their systems involves a considerable amount of work on the part of sales or administrative staff.
To be sure, these are critical operations for both buyers and suppliers. Ultimately, providing efficient, high-quality service to their end customers depends on each one of them.
If you are an issuer of purchase orders
- You only need to register your order with the supplier in your ERP once.
- The information from this order is transformed into the standard in which the supplier expects to receive orders.
- An efficient EDI application recognizes the addressee in the electronic document structure and sends it to the supplier automatically through secure channels.
- You receive a message notifying you when the order has been received and processed at the destination.
- If there are any problems or if it takes longer than usual for the order to be processed, you receive notifications and alerts to that effect.
If you are a supplier
- You receive orders from your customers in their EDI solution.
- They are automatically transformed into a data structure that your ERP can import.
- The order data are integrated into the management system and ready for processing.
- Your customer receives an automated confirmation that you have received the order and that it is being processed.
Integration of delivery notes with EDI (DESADV)
A delivery note is a document that is included with the goods that are shipped to the customer. It is a critical commercial document used to verify that the goods actually received match the purchase order.
The possibility of running these checks prior to the invoice being issued means that adjustments can be made to the invoice if there are any discrepancies with respect to the initial order.
If you are the recipient of the goods
- Your supplier issues a shipping notice when the goods are ready to be sent.
- When you receive the message it is automatically integrated into your management system or ERP.
- The received document must be matched up with the original purchase order so that any differences can be detected before the goods are received.
- You issue a confirmation notice to the supplier if everything is in order.
- Your warehouses are notified in advance of the arrival of a new shipment. This allows them to plan ahead, making the unloading and storage processes more efficient
- If the delivery note comes with bar codes for identifying the shipped units, the verification process at destination is simplified by merely reading the bar codes on each unit.
If you are the supplier
- From the received order, a delivery note is generated in your ERP, selecting the actual number of units of each reference that will be shipped.
- Your EDI solution takes the data from the delivery note and sends them to the destination in the form a Shipping Notice which is received by the customer in the desired format.
- Your customer checks the shipping notice against the original order. This process is usually fully automated since all the commercial documents generated by EDI are traced (orders, delivery notes, invoices, etc.).
- You receive a notice confirming that everything is in order.
- This allows you to expedite the delivery and unloading process, since the customer is informed in advance of shipments that will be arriving. This reduces the order processing times at destination.
Integration of invoices with EDI (INVOICE)
The automation of invoicing processes is a strategic element that can result in savings up to 90% compared to managing these documents manually.
The volume of invoices often processed by accounts payable departments requires the adoption of measures to optimize the operations associated with review, validation, registration and payment to the supplier. Similarly, invoice issuers are forced to devote costly resources to critical tasks. Among these critical tasks are the periodic invoicing of customers, which also involves printing, enveloping, postage and mailing. In addition, you must perform periodic checks to verify the receipt and status of the invoice in the accounts payable department.
Often, the volume of invoices handled by the accounts payable department requires the adoption of measures to optimize the operations associated with their review, validation, registration and payment to the supplier. Likewise, the issuers of the invoices are forced to dedicate costly resources to critical tasks. These critical tasks include the regular billing of customers which means printing them, addressing the envelopes, applying the postage and sending them. There are also controls that must be run periodically to verify reception and the state of the invoices with the accounts payable department.
The integration of electronic invoices allows you to automate practically all of these steps. It offers issuers and recipients competitive advantages that translate into higher efficiency rates and, consequently, important cost savings.
If you receive EDI invoices
- Your EDI solution receives an invoice issued by a supplier.
- The invoice undergoes a mapping process that generates a data file to be integrated in your ERP.
- The data are transmitted securely to the local network, where the invoice is registered in your management system.
- The fact that the documents are automatically registered in your ERP simplifies the process of matching and validating them with other documents already in the system like purchase orders and delivery notes.
- If the validation process is successful, your system marks the invoice as ready for payment and a confirmation massage is sent automatically to the supplier's EDI solution.
- In addition to the invoices you receive from suppliers who have EDI solutions, you can also integrate the ones sent to you by suppliers who do not use this technology. See our EDI web portal solutions.
If you issue EDI invoices
- You generate invoices in the ERP.
- Your EDI solutions gathers the data from these documents and runs them through a mapping process to adapt them to the structure in which the customer wishes to receive them.
- Your EDI software recognizes the addressee of the invoice and forwards it automatically through the established communication channels.
- Your client receives the invoice.
- You receive a notice that the document has been processed. If, however, there are errors if too much time elapses, you will receive alerts informing you of this.
- If you have an EDI solution, you can issue 100% of your invoice electronically. This means that you can even send them to customers who do not use this type of technology. See our solution for the publication of EDI invoices.