EDI wins the bangs for bucks contest

Time to take a fresh look at Electronic Data Interchange – EDI projects are delivering fat returns and boosting profits.

EDI used to be something businesses were mostly forced into. When you supply big retailers for example, you must send electronic invoices directly into their accounting system. There’s no choice in this – your paper invoice simply won’t be accepted. So there was often an element of ‘must do’ with this sort of EDI project.

Suppliers still have to use EDI to supply Mitre 10 or The Warehouse, but EDI projects are now being used strategically to drive substantial returns on investment. The three biggest reasons businesses now do EDI projects are:

  1. integrate web sales into ERP systems,
  2. reduce cost of sale, and
  3. enable drop shipping to avoid holding inventory.

Integrate web sales into your ERP system

This is a common EDI project because the return on investment can be so substantial. Nearly all companies have a website, and most of them want to offer sales cart functionality. It lets you capture that ‘hot moment’ when a consumer decides to buy. Enprise offers a number of ways to integrate your website to EXO, so we can implement the solution that best suits your business.

Reduce cost of sale

These projects use EDI to slash administration effort. You can take a sales order with several hundred lines that would take an hour to key in, and bring it into your system automatically. A common project is purchase order/sales order integration. This uses a customer’s purchase order to automatically create a sales order and bring it into your accounting system. Or, instead of emailing your purchase orders to suppliers, you create the purchase order and it sends to the supplier’s accounting system automatically. Enprise is often asked to automate the stock movements associated with the sale or purchase and generate the invoices as well.

Maintaining supplier pricing is another way to reduce cost of sale. For example, I might take your suppliers price list and update the supplier costs in your EXO system. Purchase orders for that supplier will contain all the new costs. With hundreds or thousands of stock items, you save a staggering amount of admin effort.

Drop shipping removes any need for inventory

‘Drop shipping’ is big in the US and trending in New Zealand. Customers order from your website without you having to hold any stock. The order goes to the supplier who manages shipping. The transaction is automated and so are all compliance procedures. An automated paper trail enables easy auditing and accounts for stock movement.

I work with businesses that have sweetened their bottom line by $80,000 per year with the right EDI project. Time to think strategically and take a fresh look at what’s possible in your business. 

About the author

Elliot Cooper

Elliot Cooper is Enprise Group's CEO. He is a qualified accountant with deep accounting and financial controller experience.

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