EDI Technology to Improve the Order to Cash Process

Electronic Data Interchange, or EDI has become our staunchest ally when it comes to optimizing the supply chain and boosting productivity. Applying this technology to the order to cash process (O2C), in other words, from when the order is placed until payment is made, means greater security and fewer economic costs for businesses. This is why large companies, especially in the retail scope, already have solutions of this type which automate many of the tasks.

But how does this system work?

The first thing you need to know is that EDI lets you exchange structured data with other companies according to previously agreed message standards. The messages are always sent by electronic means, securely and with minimal human intervention. This way, we manage to cut the time spent on each task and improve communications with any trading partner. For example, a company can immediately connect with customers, suppliers, logistics operators, banks, government agencies, etc. regardless of their profile and technological capacities, thanks to the use of standards such as XML, EDIFACT or ANSI X12.

A growing system

The adoption of EDI in the O2C process is increasingly spreading in Mexican companies. The reasons for this growth were discussed a few weeks ago in a Workshop held by GS1 Mexico, with the presence of EDICOM and some large multinational companies like Wal-Mart, Unilever or Nestle.

Bear in mind that EDI solutions let you send a large number de exclusive messages for each phase of the purchasing process. These include purchase orders, catalogues, receipt notices or invoices. But they also implement other messages and systems that expedite the movement of goods, such as the DESADV, three-way match processes or the incorporation of RFID tags. In this earlier post, we explained the EDI messages most widely used in logistics.

In addition to the cost savings and speeding up procedures, with the rollout of EDI in the O2C, suppliers and distributors are able to synchronize their product data by means of electronic catalogues. Moreover, this technology provides traceability throughout the whole process, allowing the implementation of continuous replenishment.

Two decades of experience

EDICOM has led the field in development of EDI and e-billing solutions for 20 years in Europe and Latin America. Thanks to the EDICOMNet B2B communications infrastructure, the international e-invoicing platform or the EDICOMData catalogue, thousands of companies worldwide have simplified and enhanced their daily tasks in the order-to-cash process.