How to easily reduce corporate costs? Make full use of EDI

Inflation is rising, the energy crisis is progressing, corporate costs are rising. Companies are therefore always looking for new ways to save. One of the ways is digitization. If you have already started with digitization, stop and try to think if you can't get even more out of it - for example, involve more business partners in electronic data interchange.

Companies that have well-optimized processes will have an advantage in the coming crisis. Companies that have not yet started should analyze existing processes as soon as possible and look forways to simplify them.

One of the most effective ways is to eliminate paper documents and forms. A lot of things can be solved online, either when communicating with customers or with business partners. 

Electronic data interchange as basis of digitization

Suppliers and customers exchange orders, delivery notes or invoices through electronic data interchange (EDI), thus reducing the costs associated with the distribution of paper documents. They save the time of buyers and invoicers and eliminate the error rate associated with manual data processing. However, the EDI solution only works after the involvement of both parties – the customer and all suppliers.

When to involve suppliers in EDI?

Customers usually start by involving the key suppliers who make up the largest part of their turnover. They quickly see the saved finances. But 80% of the turnover does not necessarily mean 80% of the administrative burden. Even a fraction of small suppliers produces hundreds of documents that companies continue to process on paper or via e-mail.

Involvement of large partners is a great strategy when starting electronic data interchange – say for the first 6 months. But your long-term goal should be to involve all suppliers, including the smallest ones.

"Saving manual work, speeding uplogistics and accounting processes, and a better overview of ordered and delivered goods are important to us. Suppliers will appreciate speeding upi nvoice processing and eliminating problems with 'stray' invoices. They will also immediately receive a message about receipt of an invoice or problems with its processing. Thanks to this, they can solve problems in invoices immediately and not after checking the balance," says senior accountant and EDI consultant at Alza Monika Ježková.

How to motivate suppliers to engage in EDI?

If the partners already use some EDI software, just connect with them. If they do not yet have EDI in their company, it is necessary to explain its advantages to them, or offer them help with the implementation.

It's easy with suppliers who use informationand accounting systems that support EDI. They usually realize the benefits quickly and do not have many arguments against.

However, there are suppliers:

• who use a system that does not support EDI,
• for whom implementation would be costly
• or those who exchange so few documents that even the financial savings would not be worth it.

You can offer these suppliers a simplified web solution, e.g. ORiON webEDI. The web portal will be up and running in one afternoon without complex implementation and training. Although it does not provide complete automation, it will deliver all orders on time and prepare delivery notes.

How suppliers are involved in EDI communication

There are two forms of involvement:

• company arranges it itself (must entrust its employees with this)
• or their EDI supplier will help them with this if they offer this service.

Involvement using internal staff

It is necessary to designate one employee who will be responsible for the entire project, oversee the deadlines and the procedure. The advantage of an internal person in this position is that they have better insight into the company, can prioritize the involved suppliers and evaluate the progress of the project almost immediately.

But it also has a darker side – internal projects are often suppressed because other priorities emerge. The employee then works on the EDI only partially and the involvement drags on.

Involvement through EDI provider

You as a customer know your partners better, but the EDI provider knows all the possibilities of the software and its advantages directly for the segment of the given supplier.

If you want to be sure that partner onboarding goes according to plan, entrust it to your EDI supplier. They will take care of all communication with suppliers and guarantee you there sult. You just confirm the volume of parties involved and the dates.

At GRiT, we offer our clients project-driven involvement, where we take care of everything. We involve hundreds of suppliers every year. For example, at the beginning of this year, IZOMAT stavebniny only communicated with three suppliers via EDI and did not move forward."Within half a year, GRiT approached and involved dozens more of our suppliers. We only provided the list of suppliers and the rest of the administration was handled by GRiT. We continue to involve suppliers so that we can make full use of the EDI," says Stanislav Božek, Financial Director of Izomat.

We also helped the Czech and Slovak chain of pharmacies Pilulka with their involvement, which even considered introducing EDI as a condition of cooperation. "GRiT, which helps suppliers with EDI integration, made our work a lot easier. Some suppliers are initially not happy that we want something from them, but once they implement EDI, they are glad. EDI makes it easier for them to process orders too,"says Pilulka's COO, Michal Hanáček.