When a business is required to bake EDI into their system, they usually start by…
- Figuring out what EDI exactly is, and…
- Gathering an understanding of the features they need
Let’s quickly answer A: What is EDI?
EDI, or electronic data interchange, is the electronic communication of business transactions such as purchase orders, confirmations, invoices and shipping updates between suppliers and retailers. The fundamentals of EDI used to happen on paper and via fax. Today they happen electronically, powered by cloud-based software. When a supplier is EDI compliant with their trading partner(s), they experience fewer chargebacks and, ultimately, develop strong - and profitable - relationships.
What to Look for in EDI Software
When looking at EDI software options, there’s a lot to sift through. Here’s what we recommend suppliers look for.
If you sell globally or ever anticipate doing so, you want your EDI software to comply with X12 and EDIFACT standards. X12 is the North American standard. EDIFACT is used throughout Europe and Asia.
You want your EDI software to map not just with your current trading partners but also those you’d like to have a relationship with one day. You also want an EDI provider that updates mapping when trading partners make changes. This ensures compliance, prevents errors and reduces the likelihood of chargebacks.
You can bring your products to consumers through trading partners, wholesale, online marketplaces, your own ecommerce platform… the list goes on. What you want is an EDI platform that can handle all the channels.
Not everybody who has access to your EDI platform needs to see everything. Look for permissioning that can limit what internal team members can see. You also want an EDI platform that can grant access to other systems such as your 3PL, WMS and ERP.
Would you rather move 100 documents one at a time or all at once? That’s batch processing – and it’s a huge time-saver.
Within an EDI system, validation checks are mission critical to preventing chargebacks. They get created through mapping protocols and system settings.
This almost goes without saying but you want your EDI software to adhere to all EDI document exchange protocols, the most common of which are VAN, API, FTP and SFTP.
Document tags are crucial when it comes to communicating, organizing and managing workflows as efficiently as possible. With tags, all parties are on the same page as orders move through the system.
The right reporting out of your EDI system can help your team make intelligent decisions. Look for inventory reporting that can adhere to trading partner frequency requirements and custom reporting options that can tell you things like the total number of one SKU across multiple orders, invoice and shipment details within specific time periods or real-time item reports that can show what has – and what remains to be – shipped.
The Right Partner Can Make All the Difference
You’re not an EDI expert. Nor should you be. With the right EDI partner – one that can provide custom solutions, in-house development and integration support, and US-based customer support – figuring this all out won’t be as daunting as you might think.