FINANCIAL EDI CHANGING THE CASH MANAGEMENT BUSINESSWhat is Financial EDI?Financial EDI (FEDI) is the computer-to-computer exchange of payment and payment-related information between companies using a standard format. Unlike other forms of EDI, such as exchange of price quotes or purchase orders, financial EDI always involves a bank because a financial transaction (a payment) is being effected. Due to this fact, a new business opportunity now exists for banks in the cash management industry. Who Uses Financial EDI?In the most general sense, the marketplace for financial EDI consists of two distinct segments. o Originators - companies or government agencies who electronically initiate payments and the associated remittance information to their suppliers using the standard EDI format. o Receivers - companies and government agencies who electronically receive payments and the related remittance information using the standard EDI format. In financial EDI, a bank acts as the financial intermediary between originators and receivers for both the actual payment and the associated payment data. How Does Financial EDI Work?In the classic EDI scenario, the following actions take place: o The buyer, or originator, electronically extracts payment information from the company's accounts payable system, o Formats the data into an EDI standard (ANSI 820 transaction set), o Transmits an ANSI 820 file to the company's bank, o The bank then takes the 820 data and puts it into the format necessary for it to be carried through the Automated Clearinghouse Network as an ACH transaction, o The ACH network then delivers the payment and data to the seller's bank. The bank credits the seller and, o Electronically transmits the payment-related information in the 820 format to the seller's accounts receivable system where the payment is then posted automatically. Benefits of Financial EDI?By using financial EDI, all the steps described above are done electronically with the payment and related information exchanged from one computer system to another, with no manual intervention. Today, of course, most payments are made by check with a hard copy of remittance information attached. The manual processing which results by using paper is less efficient, less accurate, and most importantly, more expensive than electronic processing. This is why financial EDI is a rapidly growing way of doing business. Benefits of Financial EDI for BanksFor banks in the cash management industry, offering financial EDI services is one way to defend the revenue generated by current check business, whether it is in disbursements or collections, since over time, a great many of these payments will be converted to electronic EDI transactions. However, because of the investment required, not every cash management bank will be an EDI player. Electronic processing. This is why financial EDI is a rapidly growing way of doing business. By Ken Kinlock at kenkinlock@gmail.com |
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EDI Roll-out is my favorite area of concentration. Would like to pass on some issues/concerns from a company just getting into the EDI arena:
"My company is in the process of getting EDI up and running. We plan to do extensive parallel testing with our first 5 trading partners to ensure everything is working properly.
I was wondering how long it would take to start rolling out other trading partners after that.
Here are the factors to consider: -We're going to receive 810 invoices from our vendors through EDI and possibly other documents. -We will have already have set up 5 initial trading partners before attempting to roll out other partners. -EDI is new to me and the rest of the employees in my company. Is it realistic to think that we could roll out one vendor per week for 3 weeks? And then 2 per week for the next 8 weeks after that and finally advance to 3-4 per week?" Yes, it is "possible". However, you have numerous unknowns that will impact your ability to get it done. - Your EDI experience is admittedly slim, making it difficulty to respond appropriately to issues that arise. And there will be a lot of them, happening quickly. - You have no control over your trading partners. You may call them all and let them know you'd like to turn them on. However, many trading partners require a testing cycle and simply not have the time to slot you in immediately. Also, some Trading partners require a "lot" more work than others. - You have not indicated how many of "your" folks would be involved in the effort. This is actually quite a bit of work, with a great deal of coordination and details that need to be managed. - You have not indicated if you have all of the affected business groups in your organization prepared and ready to assist. Implementing EDI is not just a technical endeavor. It requires understanding, buy-in, and support from all of the groups that will be impacted. See the full article on EDI Roll Out See my other blogs See other blogs about EDI |
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| Find out about EDI Global Identifiers and EDI Directories | |
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Payment automation and unintended consequences "The Payoff" and, more generally, ec-bp, advocate automation and related supply-chain efficiencies; our general attitude is that "trimming the fat" is always a good thing. That's why we explain the latest techniques in EDI (electronic data interchange) and ERP (enterprise resource planning), and how to make the most of them. There's a "de-skilling" or "deprofessionalization" aspect of this that worries us, though. It will take a bit to explain. |
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The JWH EDI Services Electronic Commerce Messaging System may be a right for you if you already have an EDI translator, EDI personnel, or do your own mapping and only need EDI VAN communication.
The power of our global EDI network is available on your server, your cloud platform or your application.
Move past the ancient VAN technology. JWH EDI Services Electronic Commerce Messaging System will bring your EDI operation into the 21st Century. READ MORE |
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Traveling in Europe? You will probably need to make a FERRY RESERVATION. Réservation Ferry en français Stop by and see our Reservations Center. |
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WAZZUB, is a Brilliant Concept; It has NEVER Been Done Before ~ Make no mistake. WAZZUB is a multi-billion dollar project. It has been in the making since 2007 with over $2,000,000 already invested. It’s the new Internet Phenomenon; it's here to stay and you are one of the first in the world to know about it. So, it's very important to understand what you have in your hands. This Baby WILL go VIRAL. ~ Timing is Everything ~ You can set yourself up for life financially - for F*R*E*E - and earn Massive Passive Residual Income every month like nothing else out there. ~ This can happen at LIGHTNING SPEED because it's always FR*E*E for all ~ The more F*R*E*E members you invite, the more money you will make. You could earn about $1.00 per person in your "UNLIMITED" width x 5 generations-deep WAZZUB family. (depending on the company growth) Sign up for WAZZUB today. See the new Perfect Internet Home Page today. |
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ec-bp.com The Forum for Supply Chain Integration
ec-bp was established in 2005 as the advocate for lowering the barriers to the adoption of EDI, and our email newsletter has been published every month since that time. Our focus has expanded beyond EDI to encompas the full gamut of supply chain practices and technologies. In addition, our readership has grown to become the largest of any similarly focused publication, and has expanded to include more than 90,000 professionals involved in nearly every aspect of the supply chain. Today’s supply chain is more than simple transport of EDI documents. The complexity of maintaining compliance with trading partners, managing the ever increasing amount of data, and analyzing that data to drive constant improvement in processes and service take supply chain professionals far beyond the basics of mapping EDI documents. |
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Seen this garbage truck in your neighborhood yet? China National Heavy Duty Truck Group Wuyue Special.Vehicle.Co., Ltd. focuses on development, manufacture and marketing of Howo trucks. We market Howo trucks in more than 50 countries and districts all over the world. Founded in 1935, We are the oldest and largest heavy-duty truck producer in China and have subsidiaries all over the world including truck factories, diesel engine factories, axle factories. |
| See us for the largest selection of used garbage trucks: all makes and all models! | |
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Have times changed or what? Back in the old days, you placed orders with your supplier by phone, fax, mail, and by walking into their store. They entered your order into their system, picked and delivered your products, and mailed you an invoice. Your AP clerk took the invoice, did the 3 way match, put it in the stack to be paid, and you mailed a check at the end of the month. |
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| Our affiliated manufacturer located in Shenzhen City, China, is specializing in all kinds of precision mold, die casting mold and section injection mold. They also provide multi-style die casting part and automobile parts etc. They have adopted international advanced CAD/CAM system and various special mould-designing software. They can provide you one-stop service working off your diagram. They have obtained ISO9001 authentication. Their ERP system ensures quality and delivery time. We are sure that you will have great benefits from this business opportunity. Any questions? Please do not hesitate to contact us. |
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What is a Social Supply Chain? Social supply chain is using "social media technology" all across the entire supply chain : from supplier's suppliers to customer's customers. It means integration of social media technologies (collaboration, sharing) to connect and encompass the participants across the whole supply chain. The customer-facing side of companies is getting busier. Customers use social media to connect with their peers from a marketing standpoint to promote and advertise their services and capabilities. Social media is now particularly important in customer service environments. Consumers are able to communicate with customer service departments through Twitter and Facebook. In the supply chain, companies have begun using social media to work with suppliers, vendors and customers. As an example, they can have discussions on issues and arrive at a concensus. |
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| Food Distributor for organic and natural products. Wholesale distribution throughout North America. We are a broker for organic and natural products. We specialize in locating organic products you sometimes can't get from your local distributors. We set you up with a relationship with a supplier. Our ORGANIC FOOD WebSite is not everything we can get, just a robust sample. |
| See KC Jones BLOG about Railroad History We cover New York Central, New Haven Railroad and other Eastern Railroads. |
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See Penney Vanderbilt BLOG about Golf and Vacations, especially on the French Riviera We have a lot about Nice, France. Not only do we cover golf on the French Riviera, but also Northwest France, Quebec, Golf Hotels and THE US Open |
