Three things businesses need to know about their EDI capability

Understanding your EDI capability


Modern business processes often feel like you're entering uncharted waters, especially when navigating the growing digital landscape. However, with the unknown also comes growth opportunity, and businesses can no longer afford to stay on the sidelines and let manual data entry steal another win.

Embracing EDI capability empowers businesses to navigate these waters with confidence, knowing they have the tools to streamline operations and improve efficiency.

Cue EDI, or Electronic Data Interchange.

What is EDI capability?

To be EDI capable means a business can exchange documents electronically. However, this is not just any electronic document; it must be in an agreed format with your EDI trading business partners.

The next question is why?

In short, Electronic Data Interchange (EDI) plays a vital role in integrating critical B2B systems. The fundamental driving force is eliminating traditional paper or PDF-based processes and replacing them with an EDI solution that streamlines operations, improves business agility, and assures transparency across the entire business cycle.

For instance, EDI software can significantly reduce the time and effort required for order processing and collections, leading to faster fulfilment, enhanced cash flow and improved customer satisfaction. These capabilities become critical when trying to boost operational efficiency, especially in the realm of accounts receivable.

Here's what you need to know about EDI and the value it adds to your AR team and other business processes.

Three things you need to know as an EDI-capable business

The need for real-time data insights

Real-time data is your best ally in collections and invoicing processes! However, when relying solely on traditional manual processes, data and document retrieval can be time-consuming and often lack the ability to showcase real-time insights.

In contrast, EDI software gives businesses full transparency in real-time with their trading partners. This, paired with streamlined documentation, elevates the entire supply chain management and allows businesses to make more informed decisions whilst leveraging data to continually improve workflows.

EDI solutions reduce the cost of operations

PDFs, when used on their own, are not great for your business financially. EDI capability speaks directly to the drip and fixes the leak. One way of doing this is by eliminating the operational cost of manual processes. Not only does it reduce the need for admin-heavy tasks, but it also reduces the likelihood of errors, which often lead to disputes with your business partners.

Tools such as AR automation leverage EDI to allow your AR team to leverage the benefits of your internal electronic business documents to free up your human resources, boost customer engagement, and focus on more value-driven tasks.

Your EDI capability enhances security and compliance

With upcoming plans from SARS to modernise VAT in South Africa, businesses will likely be expected to become EDI-capable somewhere in the near future. This means all South African businesses will likely be required by law to establish themselves as an EDI-capable organisation, and be able to send out e-invoices instead of paper or PDF documents that hold little value when it comes to real-time data transmission capability.

Although this may seem daunting at first, it brings many business and security benefits, which help AR teams fortify their financial integrity in a growing threat landscape, reassuring businesses about the protection of their sensitive data.

Seamless integration of EDI solutions with System1A

Ultimately, to retain their competitive edge and grow their business, companies are required to not only trim the dead roots but cultivate rich soil for the harvest. For AR teams especially, this means switching from manual processes to embracing the switch to EDI solutions to streamline operations and enhance cost savings.

Curious about how we can help you send and receive electronic documents while improving your cash flow and automated AR tasks?

We provide one application to manage all your company's accounts, communications, deliveries, interactions, payments, receipts and reporting.

Get started today! Request a FREE trial or FREE consultation.