EDI is Growing in Popularity – Is Yours Giving You Headaches?
Electronic data interchange (EDI) allows exchange of electronic format documents between computers. Rather than sending paper back and forth, this allows different businesses and/or departments within a business to exchange electronic files directly. With an EDI for your accounts payable system, you can receive your invoices more quickly and make timely payments while reducing the internal time your employees spend managing their invoices.
However, there’s a big obstacle to making EDI work in your organization. And that’s the implementation. Specifically, it’s challenging to get the IT support necessary to successfully test and implement EDI for each vendor. It’s not easy to coordinate your IT team with the IT teams of your vendors so you can both work on the same project at the same time.
The solution is third-party EDI implementation. When using third-party software, the software provider is the one who handles all the IT concerns and makes sure the implementation goes through like it’s supposed to.
The Benefits of EDI
If implementation is such a challenge, why bother? As is the case with any business system, once you get EDI up and operating you’ll start to realize exactly how many benefits the system can offer. After a successful EDI implementation, you can expect the following benefits:
- Easy invoice tracking and real-time visibility to invoice status.
- Reduced time for processing invoices.
- Lower costs associated with invoice processing and the use of paper products.
- Shorter order processing times and faster payment turnaround.
- More accurate business documents, which leads to fewer stock-outs, canceled orders, or re-working orders.
- Improved data quality. No more errors from poor handwriting, lost paper, keying errors, etc.
- Improved service, which results in more productive client relationships.
- Time-sensitive vendors won’t have to worry about credit holds or business delays
Once you’re using NextProcess’ AP system for your business, it takes as little as 24 hours for an invoice to be received, processed, and released to your accounting system. And that’s if it’s a paper file. It takes even less time using EDI since the invoices are loaded into the AP system the moment you receive them from the vendor.
Preparing For EDI Implementation
When you’re ready to get started with accounts payable automation and electronic data interchange, there are a few steps you should take before jumping into implementation. First, it’s important to take stock of your existing process. Perform a strategic review to figure out what is and is not working for your business right now and come up with a list of goals for your AP automation.
You’ll also want to make sure all the involved decision makers are on-board with AP automation. If upper-level finance executives are hesitant about the need for change, you’ll have to convince them it’s a good idea. Show why change is needed, demonstrate ROI, and provide evidence that automation and EDI will actually help the company. Click here for an article about how to pitch business process automation to your boss so they’ll think it’s a good idea.
Once you have a vision that everyone is on-board with, it’s time to choose your AP automation provider. This isn’t a case where just any software will do. You’ll want to find one that fills all your needs, is easy to customize to your business, and has a user-friendly interface. And you need to get it from a company you can trust to provide implementation support.
How A Third Party Can Help
At NextProcess, our SaaS accounts payable solution has standard EDI implementation with and without image and acknowledgment files. We also handle custom loads that function similarly to EDI but which don’t necessarily fall into standard EDI models, such as flat files. You can easily integrate your invoice data with any vendor. And we manage the entire process from project planning and development to ongoing troubleshooting and support. This lets your business focus on providing more value to your customers.
Unlike many of our competitors, NextProcess has an implementation rate near 99%. In contrast, it’s pretty well known in the enterprise IT/software industry that 1/3 of implementations fail entirely, 1/3 get scaled back and/or change scope, and only 1/3 are fully implemented. So make sure you go with the company that can deliver on their promise to successfully implement your new software. If you think your business will benefit from EDI contact NextProcess and let’s talk.