Whether you are new to the business world, you might not be familiar with the term “electronic data interchange”, but now is the time to do your research. In an increasingly technological world, more and more companies are turning to web EDI services to help them run more efficiently.
But what exactly is EDI, and how can it increase the success of your business? Here is everything you need to know on the basics of electronic data interchange.
What exactly is electronic data interchange?
EDI is the quick and easy paperless exchange of business documents. This could be anything from important contracts to detailed invoices. The exchange of these documents is not just fast, but also completely secure. You can send your documents from anywhere in the world to any destination in the drop of hat.
Electronic data interchange is a accomplished using a software, so the sending and receiving of documents is completely automated. This means that every business using EDI converts their docs into a standard format that is easily interpreted and completely universal.
Who uses EDI?
Companies all over the world are using electronic data interchange, no matter how small or big their business. EDI is used in all major industries, including automotive, retail, finance, and even aerospace. It is the most efficient form of communication, and even has translation capabilities.
What processes are involved?
Once you have secured your EDI software, there are three steps involved in sending your documents. The first is to ensure all data is collected and prepare the documents for sending. Once the document is generated, the next step is to translate it into standard EDI format. If you are sending to a foreign country, you can even have the data translated into another language.
Lastly, it is time to transmit the documents to the recipient. This is quick, easy, and completely secure. Depending on the EDI service you are using, there are several methods for transmission.
What are the benefits of using an EDI software?
If you have already deemed electronic data interchange as an unnecessary service, you might change your mind when you read up on the benefits. First and foremost, the most significant benefit is cost reduction. The automated EDI service has been shown to cost just ⅓ of paper-based services like postal and fax.
With automated document exchanges, your employees can focus on more important tasks throughout the company. Overall, your business will run more efficiently, and not just because of the increased productivity of your team members. EDI also speeds up the ordering and delivery time of your product – as much as 30% faster.
Another major perk of using electronic data interchange is the environmental friendliness of the service. By going completely paperless in your document sending and receiving, you won’t just cut costs. You’ll also significantly reduce your CO2 emissions. Invest in an EDI software to show that your business values environmental sustainability.
Lastly, there is less margin for error when EDI is in the mix. The average paper-based invoice is riddled with up to 5% errors, but this can be avoided with an electronic service. Since electronic data interchange is a software that requires little human interaction, there is much less risk of human error.