What Does it Mean to be EDI Capable?
What Does EDI Capable Mean?
EDI capability refers to the ability of a business to use EDI to send and receive EDI documents electronically with partners, vendors, suppliers, and other customers. This includes things like whether the company has the software needed to send and receive EDI messages.
To become EDI capable there are two options, either running an EDI solution on-premises in an own or 3rd party data center or buying the EDI capability as an EDI cloud service.
It’s crucial for an enterprise to be able to send and receive standardized electronic documents like EDI X12, EDIFACT, Tradacoms, and many more. When your organization is EDI capable, you are at an advantage in the business world with a greater chance for success. Utilizing these standard data formats is the most significant aspect of EDI since the exchange of documents will be effective only if both, the sender as well as receiver systems are working with similar data formats.
Being EDI capable means the ability for businesses to exchange business documents/data with their trading partners electronically such as,
- Invoices
- Purchase orders
- Advanced ship notices
- Bills of lading
- Inventory documents
- Customs documents
- Shipping documents
- Payment documents
Why Should You Care About being EDI Capable?
If you work with any type of business, you should care about EDI because it allows companies to communicate in a standardized way which is more efficient, saves money and time by reducing errors and increasing accuracy.
How Does EDI Work?
EDI works by exchanging documents electronically. This means that instead of sending paper copies of contracts, invoices, and other documents, businesses send them digitally in a standardized format.
There is a 3-step process to send and receive EDI documents,
- Connection to ERP - Receive messages in internal format from the ERP system
- Conversion - Transfer messages from the internal format to the message standard
- Communication - Technical dispatch via the agreed communication protocol
How Does Making your business EDI Capable Benefit Your Business?
EDI has been around since the 1970s, but its use has only increased in recent years. In fact, according to a recent study, more than 75% of businesses are now using EDI to communicate with their business partners. That number is expected to increase as more businesses adopt EDI technology.
Being EDI capable is an advantage. Retailers seek out EDI-capable suppliers when considering new items. They focus on relationships with those who are ready for EDI. And you’ll fast-track the on-boarding process, so your products are in stores and online sooner.
Generally, any sized organization can reap the benefits of being EDI capable. Other than offering standardized communication for sending and receiving business documents such as Purchase order EDI 850, Invoices EDI 810, Payment order/remittance advice EDI 820, Functional acknowledgements EDI 997, to trading partners, vendors and etc. EDI solutions create benefits in cost savings, speed, accuracy, effectiveness, and security.
Here are a few more benefits of becoming EDI capable,
- Increase efficiency and accuracy through automation
- Be ahead of your competition
- Pack and ship orders faster
- Ability to transact with more partners
- Heightened security
- Faster processing speed
- Better for the environment
- Reduce cost
Want to Become EDI Complaint?
When you’re ready to send out invoices, PO acknowledgements or other outbound documents Commport offers a number of EDI solutions to help you increase your business efficiencies.
Drop us a line today for a free quote!