An EDI invoice (Electronic Data Interchange) is an electronic invoice that is automatically transferred between two parties, for example suppliers and customers, without manual handling. It is sent in a standardized format that can be read directly by different systems, eliminating the need for paper or PDF. EDI invoices are mainly used when large volumes of invoices are handled in specific formats, which can be beneficial in certain industries.
If you want to learn more about the benefits of electronic invoice management, you can read on here .
EDI invoice vs. e-invoice
Today, e-invoices are increasingly used compared to EDI invoices. E-invoices are sent via a VAN (Value-Added Network) operator, which provides flexibility as the supplier can send the invoice in any format. A VAN operator ensures that the invoice is delivered in the format the customer wants, which makes it easy to get started and customize the flow. In contrast, e-invoices involve a cost per transaction because the operator charges a fee for the service.
EDI invoices, on the other hand, are handled directly between two parties without the involvement of a VAN operator. This means that there are no transaction costs for the actual transfer of data. However, there may be other costs, such as infrastructure, software licenses, development and integration of systems as well as maintenance and support. However, these costs can be more favorable in the long run for companies that handle large volumes of invoices in specific formats, as they do not have to pay per transaction.
Advantages of EDI invoices
Using EDI invoices has several advantages:
- No transaction costs: Unlike e-invoices sent via a VAN operator, you pay nothing per invoice transfer, which can be cost-effective for large volumes.
- More efficient processes: Eliminates manual handling and automates invoice flow, saving time and reducing the risk of errors.
- Lower total costs for large volumes: For companies that handle large invoice flows, EDI can be more cost-effective over time.
- Environmentally friendly option: Reduced paper use and faster transmission have positive effects on the environment.
When is EDI a good choice?
EDI invoices may be the best choice for companies that handle large amounts of invoices in specific formats. Despite initial costs to set up and maintain the system, EDI flows can be more cost-effective in the long run, especially when transaction costs are avoided.
It is also important to consider the company's specific needs and conditions before making a decision. For smaller companies or those with variable invoice flows, e-invoices via a VAN operator may be a more flexible and simpler option, despite the transaction costs.
Summary
Choosing between EDI and e-invoice depends on the company's volumes, format needs and cost structure. While e-invoices offer flexibility and simplicity at a cost per invoice, EDI can be more profitable for businesses with high volumes and specific format requirements.
If you want to know more about how EDI or e-invoices can make your business more efficient, contact Conrab for advice and tailored solutions.