What is EDI Anyway?
EDI transmissions generally contain the same information that would be included in the “paper” version of the document. It’s essentially an electronic conversation between two businesses … or more accurately, between two business systems. Companies that send or receive documents from each other are referred to as "trading partners" in EDI terminology.
How Does EDI Work?
In some cases, a Value Added Network (VAN) acts as an intermediary between you and your trading partner. In the most basic form, a VAN acts as a post office that receives transactions and routes them to the appropriate recipient. It’s like a clearinghouse that simplifies communication between trading partners (i.e. you and your vendor or customer) and ensures that the data exchanged is structured and standardized.
What are the Bottom Line Benefits of EDI?
Accuracy – errors are reduced because data is not being re-keyed into another system. Improved accuracy results in a host of benefits including elimination of excessive shipping charges and the cost of returns for incorrect orders.
Efficiency – electronic documents are delivered far more quickly than their paper-based counterparts resulting in faster order turn around, happier customers, and competitive advantage.
Direct and Indirect Benefits - EDI can reduce direct costs such as paper & forms, postage, printers & toner, and document storage. Indirect benefits can include reduced lead times, more frequent inventory turns, better use of warehouse space, and improved cash flow (faster delivery, faster invoice, more timely payment).
EDI Solutions for Sage
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