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Home » Articles » Reporting Solutions » EDI and Reporting Standards

EDI and Reporting Standards

Less paperwork, considerable reduction in errors and quicker exchange of critical business information and documents is the aim of most small, medium and large enterprises across the world. The old practices and processes of data interchange have been improved and amends have been made to cater to the present pace of the global market. The biggest blessing that has come upon the business world is standardization for exchange of information between enterprises.

What is EDI?

Electronic Data Interchange (EDI) is a standard for exchange of critical business information. EDI gives your enterprise the advantage of lesser paperwork, wipes out manual tasks like printing hard copies and mailing it out, reduces manual entry and re-entry of data. The EDI software is synonymous to error free data exchange. Time has come to be the most critical of all factors in the rapid and constantly changing business scene. Gaining control of your business processes determines the fate of your business more so when time is a constraint. The EDI software keeps you in control as data can be shared within minutes of its creation, shortening the delivery time and in turn reducing inventory. This is a great boon to inventory-driven industries like retailing, manufacturing and mass merchandising. EDI is the utilization of computers to exchange business information and for formatting using globally recognized standards and formats. Common business information and documents are sent and received electronically through secure private networks like VANs (Value-Added Networks) and the Internet. This is favorable for business documents like production planning schedules, purchase orders, invoices, customs declarations and ship manifests. The EDI software is creating a new revolution towards a paperless business world. Today even SMEs are able to adopt EDI for their business transactions, unlike in the past when only large corporation could afford such measures for business excellence. Organizations rely on EDI to enhance efficiency, visibility and response to market conditions. EDI governs the format and content of all electronic documents that companies send and receive to and from business partners, customers and vendors. The EDI standards have a framework that enables the translation, interpretation and validation of the electronic business documents in a practical way.

There are four sets of EDI standards which prescribe the character sets, data elements and formats used in the exchange of business documents:

UN/EDIFACT - This is recommended by The United Nations and is the only international standard and is popular outside North America. The documents in this standard are called messages TRADACOMS - Developed by the Article Numbering Association (ANA) and is popular in the UK retail industry ODETTE - This is a standard used within the automotive industry in the UK . ANSI ASC X12 - This is a U.S. standard and is popular in North America. In this standard documents are called transaction sets TA and EDI combination Is there a most common EDI cycle? The most common EDI cycle looks something like this: edichart

What can an organization gain from EDI?

  • Does away with and decreases manual data handling, rework and errors
  • Information transfer takes place more accurately and quickly
  • Builds healthier business relationships
  • Betters business controls and productivity
  • Abbreviates transaction processing cycles
  • Cuts costs
  • Automates everyday transactions
  • Brings down inventory levels
  • Increases data accuracy
  • Depresses freight costs
  • Lends to better in-stock positions
  • Improvement of cash-flow management
  • Triggers a competitive advantage
  • Renders Quick Response capability

Why is the shift to EDI a good decision?

At this juncture in the business world there could be no better decision when it comes to data interchange than to switch to EDI. The EDI software will allow your personnel to develop and enhance your business relationships while machines process your business transactions. EDI's "information partnering" additionally strengthens your internal and external business relationships. Your business can advance the supply chain by making quick, affordable and accurate information available. The edges that EDI software powers you with lets you reduce operational costs by automating daily tasks and reworking your business processes. Get your EDI Software advantage

Is training required for EDI software implementation?

EDI is an easy to understand and use electronic system and requires no advanced or specialized training. An implementation guide is published to clarify the methods of business processes, communication and networks to make it easier to begin electronic data interchange.

How does communication on an EDI system take place?

Communication is key in any business enterprise, be it internally or externally. In EDI terminology "trading partners" are organizations that send and receive documents from each other. A third-party network or VAN poses as a sort of postal service between trading partners. In the usual case, a carrier handles the communication between trading partners. Your EDI system can communicate with all your trading partners who use a carrier in one session with that carrier. Imagine the time and money you would spend on individual communication with each of your trading partners, EDI saves you exactly those - time and money.

What is the EDI software's data structure like?

A standard communication protocol like TCP/IP is used to transmit an interchange envelope. In an interchange envelope individual electronic transmissions between different trading partners are grouped. The envelope carries specific information such as the sender and receiver of documents. Different applications have different types of EDI envelopes. Each of these electronic envelopes has functional groups within them that contain documents of one kind, like invoices. Functional groups are an option in UN/EDIFACT standards and common in ANSI X 12 standards. The integration of business solutions and processes across organizations has become easier with the emergence of the electronic era. If you can save time and money to have better and more effective communication you have struck the jackpot. With such developments in the business scene the only thing you will have a scarcity of is paperwork. Seamless communication and a paperless office is without doubt a temptation.