Electronic data interchange called EDI which uses standard format to share information through computer to computer. Most of the information are business document and form. Moreover, companies using EDI for their trading partners. From this, businesses gain the ability to track status and measure performance throughout the entire process. For example, the following are the benefits of using EDI instead of traditional paper on PO (purchase order).
1. The process takes seconds or minutes instead of days
2. The PO goes from the buyer’s computer through a network to the vendor’s computer with no human intervention at all. Eliminate data entry error.
3. The buyer receives rapid confirmation of PO receipt.
Cost saving on using EDI include: human handling costs, supplies and storage costs.
Reduction of inventory costs through shortening order processing and delivery cycles, and generally lowering inventory levels. As goods can be delivered more quickly.
If a company can receive an electronic invoice in a timely manner, the buyer can take advantage of discount terms, effectively paying less for the product. The seller, in turn, can receive payments sooner, improving its cash position and allowing it to pay less for its supplies by taking advantage of discount terms.
Therefore, using EDI brings many benefits to the companies. Especially on purchasing products from distributors. The immediately discounts will show on electronic mail and the buyers can report the best prices to customers. This may create more business for the companies and gain more profits.
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