These are challenging times: expectations to save are high and revenues remain tight. It is likely these will persist for the foreseeable future. This means the time could be right for automating the purchasing-to-payment cycle, which is likely a process that is too labor intensive and slow. Automation means that your staff will have more time to solve contract administration challenges.

Overview

Several hundred thousand companies use electronic processes. State and federal governments and colleges do as well. The reason: cost savings due to using the X12 national EDI standard. A standard is a step ahead of a consortium.

Here are the steps once contract details and communication methods are finalized:

• The Purchase Order is sent to the vendor in an EDI format.
• A PO Acknowledgement is returned within 24 hours. This important document tells of any delays, short-ships, or late ships.
• A Shipment Notices is received from the vendor. Your receiving dock will know the goods are in-transit so they can be ready.
• An Invoice is received from the vendor. It automatically loads into the Accounts Payable application. Data entry is eliminated, and so are costly delays and errors.
• Payment is made using existing processes.

This process is thorough, quick, and economical because your vendors have done this for years with their private sector customers. Consider that your Purchase Order contains the same data as does a private sector PO. This means the existing thorough and time-tested Materials Management and Accounts Payable processes and control safeguards already used remain in place. The process automation improves speed and accuracy of all processes. The risk is avoided as your existing control systems are used; EDI is merely added for sending and receiving the data in a more useable format.

The first step is to ask the Materials and Accounts Payable manager about the number and complexity of purchasing documents.

Conclusion

Process automation for the purchasing-to-payment cycle speeds a labor intensive and inaccurate process. An investment in automation can have a quick return because the existing systems with tight controls are used. DCS knows the vendors’ requirements, so setup is quicker and more economical. Our DCS GROW™ development service ensures your EDI implementation will be smooth. On-going improvements are also easier when DCS is there to assist as needed. Your first step is easy, email us for our Free Assessment.