Replacing EDI Software with Automated Invoice Processing
EDI, or electronic data interchange, is a system that allows two parties to transfer electronic documents between accounts payable and accounts receivable. Compared to traditional methods of invoice processing, EDI is quicker and more efficient.
This platform replaces the cumbersome task of handling a variety of invoices received via email, fax or postal mail. EDI is commonly used between companies to increase the efficiency of data transfer. Working with invoices in electronic format eliminates the time and costs associated with sorting paper documents.
However, EDI is not a perfect solution and comes with its own costs, namely those related to its intermediary services. Automated invoice processing software can achieve the same results as EDI but without the costs.
Despite its popularity in many accounting departments, many suppliers don’t have EDI implemented, and have no plans to do so due to its costs and the training involved. As a result, the accounts payable team will often deal with a variety of both paper- and EDI-based formats, which create additional bottlenecks and more work.
Even if every vendor sends invoices via EDI, their accounts payable department will need to review and process invoices manually. An automated solution allows companies to bridge the gap between invoices received via EDI and non-EDI methods.
Eliminate Third Party Data Transmission
Although EDI streamlines much of the document workflow, an intermediary provides a number of electronic services in addition to document transmission, also known as a value-added network. This network is often operated by a third party company. For many businesses, a value-added network is an integral part of EDI software implementation, and comes with its own transaction costs. Automated invoice processing software performs many of the same functions as EDI, but operates without a third party and its costs. The software recognizes and extracts data from invoices before importing the data into a business system. All of the work is done electronically, similar to EDI, but without the need for an intermediary.
Reduce Costs by Switching to Invoice Processing Software
Invoice processing software is easy to implement and can take the place of EDI software. It has a high degree of accuracy, and can dramatically reduce costs. Unlike EDI, invoice processing software does not require any third party service, leading to more cost reductions. Thanks to technological advancements in AI and computer vision technologies, invoice processing can eliminate bottlenecks within the AP process and turn the department into the profit center it can be.