EDI Blog

Value of EDI compliance for wholesalers and distributors

Price of EDI compliance for wholesalers and vendors

As a wholesaler or distributors, you might work with a few dozen or a few hundred brands and manufacturers. Each one of your trading partners may offer 10 to 200 different products and SKUs. Each brand or manufacturer has their own system, and their own way of formatting their business documents, product information and more.

Try as they might, none of them can match up to your system perfectly. Data gets truncated, or with manual data entry, a detail gets placed into the wrong field. So you have to contact individual sellers every time it happens, tell them about the problem, and then wait for them to fix it. In the meantime, these errors are showing up in your own system and on your company website.

Or imagine you ask to be notified a couple days before a shipment is supposed to arrive, only you don’t hear about it, and so your warehouse’s receiving area is backed up because you got a couple surprises in one day.

Finally, when it’s time to pay the invoices, someone on your staff has to pull the original purchase order, the advanced shipping notification (if there was one), and the shipping manifest to make sure everything matches up. If it isn’t, you have to go back to your receiving department to confirm the quantities reported on the receipt are correct, go back to the merchant/buyer to determine if the invoice price is correct and/or go back the seller and ask for an explanation. If it does, you can pay the invoice.

Sounds pretty terrible, doesn’t it?

That’s because it is. It is terrible. Large retailers have already figured this out and that’s why they are so adamant and insistent that any new vendor they work with has EDI and is capable of following their compliance rules. They have a standard set of rules and practices, and they expect each of their vendors to fully follow those rules down to the letter. A retailer or buyer you’ve worked with may have even imposed an EDI and compliance requirement on you.

Take a cue from retail

Wholesalers and distributors should considering doing the same with their trading partners, both the manufacturers and brands that supply the products and the retailers who buy the products. EDI and EDI compliance makes it so much easier for wholesalers and distributors to exchange accurate transactions, business documents, product details, communications such as advanced shipping notification, even the way boxes are supposed to be labeled.

You’re probably tired of dealing with trading partners that don’t give you all of the information you need, formatted in the way you need it.

Likewise, you may have gotten on some of your buyers’ bad sides by not being in compliance yourself.

Either situation results in a lot of extra work for you and your employees to rectify the situation and smooth things over. It’s a waste of staff hours, resources and opportunity playing a not-so-fun version of Whack a Mole to fix every information mix-up or losing out on sales because the data doesn’t fit the system, either yours or theirs.

EDI compliance and business relationships

EDI and EDI compliance doesn’t just help you keep your financial house and warehouse clean, it helps you maintain good relationships with your buyers. Some retailers have started to impose fines on their trading partners for failing to comply with their EDI requirements. They’ll automatically deduct the two to three percent fine from the invoice payment, and it’s up to the vendors to prove they were in full compliance. With EDI compliance and testing, you wouldn’t have to worry about the fine. Your system will be set up to give every trading partner exactly what they need.

You no doubt know how difficult that can be. Each buyer and seller, even if they have identical ERPs or accounting systems, have nuances to what information they require and in which field, meaning each trading partner requires a unique setup. Then, once you get it figured out, that trading partner may make a change, putting you back out of compliance.

This is where an EDI solution like Fulfillment EDI can make all the difference in the world. What EDI does is make sure our system complies with all participating retailers’ systems; you only have to tell us what your business requires. We have current EDI maps for thousands of trading partners and have a tested system for creating new EDI maps, too.

Maintaining communication

After your information and requirements has been mapped, our system works like a translator between you and all of your trading partners, exchanging exactly the information needed by each organization. If one of your partners changes their requirements, EDI staff makes the adjustments to your EDI for you and tests the system for compliance. With the EDI EDI services, you don’t have to worry about compliance again.

If you’re a wholesaler or distributor dealing in large volumes, there are three things that are very hard to accomplish without EDI and compliance: Getting paid and paying others timely; taking advantage of on-time discounts; payment accuracy automation via 3-way match. With EDI compliance, you can do all three of those things, and keep your trading partners happy by always providing them with accurate information.

At EDI Here, EDI compliance isn’t so difficult with our EDI system. You only have to match to one system — ours — and we’ll make sure you match and comply to all of your trading partners, both buyers and sellers. If you would like to learn how to use EDI for your wholesale or distribution business, please visit the EDI website for additional information or to speak to one of our EDI experts.

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