If your company relies heavily on stock purchased from vendors, chances are the volume of the invoices and the frequency at which they’re received is substantial. If the volume of invoices is at a level that causes difficulty in managing and processing them manually, then it may be time to consider EDI.
Consider also the ways in which vendors send invoices to your company. You may be receiving invoices in multiple different formats like email, paper and PDFs. This will inevitably slow down processing times, even delaying payment to vendors. EDI allows for the transfer of documents in a standard format, making processing quicker, and removing delays in issuing payment.
If you are placing a large number of orders with vendors, you may have the bargaining power to ask vendors to start sending invoices using EDI. This would ensure that the majority of invoices are captured the same way, allowing for even faster processing times and further EDI cost benefits.
Again, if the number of vendors that you’re buying from is substantial, it may be difficult to accurately process invoices quickly to meet the agreed payment terms. Not all of these vendors will be using the same method of transferring documents to you, either, which drives up the time taken to process invoices and, as a result, the cost.
On the other hand, if you’ve a small number of key vendors, the volume of invoices might not be as high nor the resources needed to process them.
Ultimately, the aim of using EDI is to reduce the time and cost involved in processing documents received from your vendors.
One of the major benefits of EDI is managing hundreds and thousands of documents that would otherwise need to be managed manually.