Computers and software have a great impact on how business transactions are carried out in the present time. Today there are codes that can automate accounts, logistics, employee performance checks etc. However, in an organization, all systems need to exchange information with each other, and this happens via a digital transfer of data or an electronic data interface. So if your company uses EDI services, your paper invoices, purchase orders etc., will be seamlessly transformed into an electronic format.

The Advantages Of Having An EDI Software For Your Company


Lowers The Chances Of Errors

In a traditional setup, a human employee performs all the functions that EDI software can perform. So an employee is responsible for generating the purchase orders, generating fax, generating and sending invoices etc. However, humans are prone to errors, and even the most efficient employee has an error rate that is higher than a computer.

So by replacing human interface with software, EDI lowers the chances of errors in an organization. Since the chances of error are reduced to a minimum, EDI software makes sure that the efficiency of the organization increases manifolds.

Lowers The Turnaround Time In A Company

Turnaround time is defined as the time that is required to complete a specific task or fulfill a request. So if a customer has ordered a product from your company, the time in which you deliver the product to the customer is your turnaround time.

Customers and business associates greatly appreciate it when your business has a low turnaround time. This is because a low turnaround time improves the dynamicity and profitability of any business. As customer satisfaction rates go up, you can expect more orders and a boost in your company’s profit. Likewise, if your business partners are satisfied with your prompt service, the chances of forging worthy collaborations increase manifolds.

EDI software can have a major role to play in lowering the turnaround time of a company. Since EDI software allows for the automatic transfer of data from one point of the supply chain to another, the delay in transferring the data is reduced to a great extent.

It Helps A Company To Track The Flow Of Goods And Services


Since the EDI software allows quick transfer of data as and when a business transaction is set into action, this software allows the managers to track the flow of goods in real-time. For instance, if a company gets a fast update on the number of raw materials it has received, then the managers can get a picture of how much more they need to order.

Opportunities For Quick Correction

With an electronic system, there are chances for making quick corrections. If there is indeed an error in filling invoices, a manager can quickly make amends. However, in the case of paper invoices making amends is a tedious process.

For instance, if software places an order for a hundred spare parts instead of a thousand, then the change can be communicated quickly in an electronic system. However, if a physical paper has to be sent, then it might be too late for the supplier of spare parts to make amends. And a fresh order might have to be raised for the extra spare parts.

Improving Business Opportunities


Getting EDI software helps gain many business opportunities. Since the company’s workflow becomes more efficient with EDI software, the company can take up more work. It can work with multiple suppliers and also improve its market reach since its operations become more fast paced.

It Raises The Overall Profit Margins In A Business

Many people might think that engaging human labor is cheaper than installing software, but in the long term, the software reduces cost since it improves the efficiency of the business. As orders get completed faster, a company can do more work in less time and hence its net output over a period of time increases.

Moreover, when a company replaces a paper-based system with an electronic one, the cost of purchasing paper and printing ink also goes down, and this further improves the profit margins of a company.

Improves The Safety Of Transactions In An Organization


Many people feel that a completely electronic system is vulnerable to data outrages and data erasure. However, EDI is completely safe when it comes to data safety as it uses an encryption-based system to transfer data.

Moreover, most companies have a software team that regularly backs up the data that is transferred between systems. So the chances of data loss are minimal. In contrast, a paper invoice or purchase order, once lost, can be extremely difficult to trace. And regenerating a purchase order can be quite problematic.

Improves The Environmental Sustainability Of An Organization

EDI software transmits data electronically; hence it reduces paper consumption in a company. Production of paper necessitates the cutting down of trees. Deforestation harms the environment, and many environmentally conscious companies phase out the use of paper because they do not want to harm the environment.

Moreover, the expenses made towards installing EDI software can be shown to be incurred for corporate social responsibility (CSR). Many companies are required to spend a certain percentage of their profits towards improving the environment or society at large. Since EDI lowers the carbon footprint of a company, the cost of installing EDI can be shown to be a part of CSR spending in a company’s balance sheets.


An electronic data interface is a great investment from a commercial point of view. It automates the process of data transfer and makes the process of invoice and purchase order generation entirely paperless. Data from a number of organizations shows that the adoption of EDI saves 65-80% more than a paper-based system.

The quick and real-time transfer of data reduces operational costs and improves the efficiency of a company. The chances of making errors are also reduced to a great extent. All these factors lead to improved brand reputation, customer satisfaction and stakeholder confidence in an organization.