A Sample EDI Document Flow

This process occurs with every customer; the goal is process automation and error resolution at the lowest, reliable cost. Time wasting Web forms are eliminated. EDI is effective with most customers whose total annual sales are over $100,000,000. Fine-tuning existing procedures and systems yields ROI’s over 50%.

(Read a description of the typical Order-to-Payment cycle for Vendors).

Customer Purchase Order Arrives

You Send a PO Acknowledgment

[Time passes - The order is shipped]

You Send a Shipment Notice (ASN)

You Send an Invoice

Customer Sends Payment

Shows their final version of the transaction. You must spot an error now. Automation helps.

You make a promise by confirming:
* Price
* Quantities
* Dates
* More
They look for
* Short-shipments
* Late-shipments
And if unhappy, contact your competitor.

They look to ensure you fulfilled the agreement (scorecard). The Shipment Notice is sent the day the shipment occurs to tell them the exact quantities shipped. It automates their check-in process, so errors here such as wrong quantities are difficult to correct.

Their ERP system and then their Accounts Payable staff scrutinize it for errors. If they are in doubt, they deduct.

Errors deducted. Both your buyer and your Accounts Receivable staff can easily scrutinize it for errors. If in doubt, deduct.

The improvements can best be gathered using a steering committee as several departments are involved. And, their “ownership” will be enhanced.
Note that business processes are unique to each company. The above is an example of a standard process.