Companies of all sizes endeavor to improve the overall operational efficiency of their supply chain and invoicing system. This is the reason why owners of these businesses do not think twice about using electronic data interchange (EDI) to achieve this objective. Electronic data interchange refers to the exchange of vital business information between companies and trading partners in a standardized electronic format. Industry experts say companies can exchange a wide variety of commercial documents among their trading partners using electronic data interchange. The two most important being purchase orders and customer invoices.
EDI Invoicing – Why are companies of all sizes automating their invoicing system using EDI technology?
Industry specialists explain the process of generating and sending customers invoices using EDI technology is known as EDI invoicing. Under this system, companies receive EDI compatible purchase orders from their trading partners, requesting them to supply certain products. The description and quantity of the goods to be sent are always specified in the purchase orders of these buyers. On receiving the necessary information, owners of these companies start delivering the products and generating EDI invoices on their customers. The experts go on to point out the following three benefits of EDI invoicing:
- Faster processing of commercial transactions
Companies opt to automate their invoicing system using EDI technology because of the speed at which they process commercial transactions. Under the manual system, employees have to prepare each and every customer invoice after receiving confirmation of sales. After this, they have to mail such documents to respective trading partners. The customer’s invoices can remain in transit for more than the day before the buyers receive them. On the other hand, companies can complete such transactions in a matter of minutes under EDI invoice processing.
- Accuracy of recording commercial transactions
The manual preparation of customer invoices is prone to inadvertent human errors. With the increasing volume of commercial transactions, companies need to handle these omissions, and mistakes become a serious problem. Fortunately, this is not the case with EDI invoicing. Under this system, companies and their trading partners agree to a specific format through which they generate customer invoices. Taking such a step automatically minimizes the chances of the erroneous recording of essential details of such documents.
- Cost savings
Industry experts admit that most companies may be skeptical of automating their invoicing system with a suitable EDI technology in initial stages. Fortunately, when owners of these businesses see a significant increase in collections, they have no objections to implementing this technology. This is because their buyers receive their invoices within a short period. This enables them to clear their outstanding dues immediately. Moreover, companies do not have to incur huge expenditure on office supplies as EDI invoicing creates a paperless environment. This saves these businesses a lot of money in the long-run.
EDI invoice processing enables companies to streamline the internal efficiency of their supply chains. The automation of customer invoices allows these businesses to process large volumes of commercial transactions in less time accurately. Owners of these companies also notice a significant reduction inadvertent human errors common in the manual system. They also do not have to incur huge expenditure on office supplies. This, in turn, results in cost reduction and saving of precious money and time.