Why do suppliers reject EDI invoicing?

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EDI invoicing is nothing new. In fact it has been around since the 1970’s, so why do organisations that venture down this route still find it so hard to on-board suppliers?

It’s not just the number of suppliers that are able and willing to adopt EDI, but also the time it takes to get suppliers on-board. 

To get an insight into the issues, let’s first step through the typical supplier adoption process:

1) EDI service provider contacts supplier.

2) Supplier contact details tend to be the billing clerk / credit controller who is 'unable to make it happen’…they have to confer with their team leader.

3) The team leader speaks to the ERP team.

4) The ERP team speaks to the infrastructure team.

5) There may also be a 3rd party outsource provider or two in the mix.

And so it goes on, lets be honest half of these people wont even answer their phones until the fifth attempt...

On the supplier’s side, setting up EDI requires technical skills, time and commitment to make it happen.

What you also find is that the supplier may not have the emotional buy in to set up an EDI connection. As a result, the EDI vendor and/or the customer has to treat each connection as a mini-project, making sure all people within the supplier organisation are in sync - which obviously adds cost and time to the EDI project.

The net result of this is:

Supplier adoption is impacted – only suppliers with good IT and infrastructure skills and significant transaction volumes will participate.
• Those that do come on board take forever to set up and go live.
• The cost to get suppliers on-board – and management overheads – can be significant.

Is there a better way? We believe there is:

Download our Free E-invoicing Guide to High Supplier Adoption 

People can sometimes get hung up on EDI. The reality is, the receiving organisation simply wants high quality transaction data that can be automatically uploaded into their systems in order to process quickly and efficiently.

Let’s contrast the painful and laborious process of setting up suppliers on EDI with the following, non-disruptive approach:

• Supplier receives an email requesting them to send their next (and every subsequent) invoice as a PDF to a buyer-specific email address.

• The request is received by the billing clerk who can make it happen.

• Their next invoice – which happens to be ready that very same day – is emailed to the address detailed on the communication they received that morning.

• The e-invoicing provider converts the PDF immediately into the relevant EDI or XML structure and delivers it straight into the buyer’s processing application.

The result of these procedures is easy e-invoicing and easy EDI.

Too simple to be true? Definitely not.

Almost every billing application can generate a PDF. What you may not be aware of is that when a PDF is generated by an application, in almost all instances it will be a text PDF, with data items such as invoice number, line quantity and amounts carried within the PDF itself.

The best e-invoicing technology should take advantage of this data layer and map the data within it to an XML or EDI structure. This technology doesn’t use OCR – but instead maps the data that has been placed there by the supplier’s billing application – which often guarantees 100% data quality. The data may be carried within a PDF, but the service is akin to mapping one flavour of XML or EDI file to another.

EDI is prevalent in many sectors, but it is not all encompassing. To extend the value of EDI and make it accessible to the masses, a fresh view is required and solutions needed which don’t disrupt the supplier.