UncategorizedShort-term and Long-term Cost Savings with EDI

November 10, 2020by CloudGen Admin

The digital footprint enhances the business transformation these days, eases up the communication, and allows a better flow of information and is facilitated by the stunning technological advancement – EDI.

The productive and efficient collaboration between the supplier and distributor at all stages removes the unwanted data movements. The perfect and seamless integration of the large and small suppliers enable their EDI operations to be more simple and smooth.

But, the crucial and the most important factor to consider her is about the cost savings and how implementing EDI in the right way enables us to do so.

Our article helps to get a clear picture of short and long term cost savings with EDI..

Short Term Cost Savings with EDI

The benefits that EDI offers are unmatched with any of the other business implementation strategies especially in supply chain. The cost reduction attained is partly due to reduced expenses. With the elimination of unnecessary toll and errors, the running cost or the working capital cost decreases.

The amount of time invested in reconciling the manual errors can be reduced to a great extent by employing digitization. The charges related to data tracking and transmission also decreases drastically. Also, the reduced storage needs, the area required to keep the paper-based documents intact, can be minimized, which in turn provides space for stocking and expansion.

With the significant cost-saving, one can expect to grow and enhance the business in the manifold and with ease. The space that the vocation need today for expansion and to get the same at the minimal cost and without additional investment, the best option is to opt for EDI.

Long Term Cost Savings with EDI

The long term benefits of installing EDI for the business are:

Advance Shipping Notices

With a significant reduction in time, the cost of manually storing the data related to the shipping and logistics for the long run can be reduced. An approximated reduction of around 2 percent per order is a huge benefit for the business in the long term.

Easy and Quick Order Processing

There is a tremendous increase in customer satisfaction because of easy and quick order processing procedure through EDI.

Transaction Cost Saving

A business process is indulged in a variety of transactions. Right from the preparation of the invoice to the generation of receipt, there is cost involved at all stages. The more the number of transactions, the higher will be the returns or cost investments for the business. The various transactions involved in business whose cost is reduced are as follows:

  • Time invested in the transit of the communication
  • Time spent on the manual reconciliation of accounts
  • Money spent on manual errors
  • Cost related to archiving and storing invoices
  • Reduced cost of labor for value-added work (like of data entry).


The most expensive and costly segment for any organization is a chargeback. The penalties levied for non-compliance is a huge loss for the business. With everything digitized, the instances of the chargeback related to early/late delivery, ASN/EDI violation, improper labels, purchase order violation, and shortage of products can be reduced to a great extent.

New Integration

With real-time integration, on-boarding of new partner at any point of time is easy and quick. Without the need to implement any new structure, one can easily add to the existing model without any additional expense. The standardized format of communication ensures a smooth and steady communication channel without any hassle and disturbance.

Storage Cost

Accurate and brief ordering blended with reduced paperwork cuts down the need for space to store and keeps the data. It, in turn, brings down the cost of sorting and handling the data. With the idea of go green, as you decrease the storage needs at one end, the space for the business expansion, on the other hand, is released.


With the global connectivity and digital mode of communication, the interaction between the various trading and business partners has been streamlined a lot. The speed and efficiency is everything for small organizations and strategy of managed business is the key for large organizations.

The best and the most effective implementation of the EDI lead to a sophisticated and well implemented channel of communication. The high EDI standards help in easy implementation and adaption of business.

EDI is an absolute game-changer for decades. The EDI is proven to be the best, creating long-term associations with various stakeholders, evolving new products and services, and initiating new marketplaces, and ensuring the eco-friendly working culture.

CloudGen’s SmartEDI, a Cloud-Enabled EDI solution is completely meant to cut-down the complexity as well as the costs associated with EDI implementation. SmartEDI is designed to add true business value to the core B2B transactions with world-class visibility.