The Benefits of EDI Services for Small Businesses

Getting an Electronic Data Interchange (EDI) solution for your small business can drastically improve your operation. With it, your business can save time and money, reduce your team’s manual labor, and create better, more streamlined relationships with your trading partners.

The concern is that EDI is usually associated with larger operations, making it difficult for smaller businesses to understand how an EDI solution can benefit them or why one would be worth pursuing. This guide seeks to answer those questions and more, including:

• What is EDI?
• Why do large distributors and retailers often require EDI?
• What are the benefits of EDI?
• How do you manage the challenges of EDI implementation?

What is EDI?

EDI is a system or method of exchanging business documents with trading partners, including your suppliers, customers, carriers, 3PLs, or other supply chain connections. It is an automated solution that replaces snail mail, faxes, and emails as a way of exchanging ingoing and outgoing documents like purchase orders, advance ship notices, and invoices.

The system uses transaction codes to standardise these documents across your business as well as your trading partners. Plus, you can connect your EDI to your ERP (or other systems) to autofill most information that would typically need to be retyped. This means you can streamline your workflows to reach new levels of efficiency for your team.

Why Do Large Distributors and Retailers Often Require EDI?

Some larger trade partners such as Tesco and ASDA require all their partners to use EDI before doing business– regardless of size. This is a common scenario, and is often seen as a barrier to growth for SMBs.

If it’s a barrier to expanding their product mix, why do retailers make EDI requirements at all? Because EDI enables them to standardise their documents across a huge range of vendors. This ensures that every incoming document has exactly the details which that specific retailer needs for their ERP and internal processes. At the same time, it helps eliminate human errors and streamline tasks in the retail business itself.

The advantages of EDI go beyond the ability to trade with large retailers, and far outweigh the cost and time associated with implementing an EDI solution. One of the most significant benefits is that choosing to buy an EDI solution early on gives your business the ability to save a tremendous amount of cumulative time, effort, cost, and reduce stress as the years go on.

What are the Benefits of EDI?

How do you think standardised automation can benefit your business? Well, what would it mean to process and share invoices or shipping orders quickly? How would your team benefit from not having to retype the same information for every order? Below are a few of the major benefits of investing in EDI, from productivity, to accuracy, to business growth.