As a small business you try to keep light of foot, keeping your overheads low, being as dynamic as possibly, and wanting to look as big as possible to large potential clients.  That’s actually why EDI for small businesses is a big advantage.

Benefits of EDI For Small Businesses

A lot of the larger retailers and wholesalers, in fact most medium sized ones now as well, require their suppliers to use EDI systems to take their orders, invoice them and effectively speed up the transaction time and cut costs in the process.  If as a small business you adopt the same systems you will find that retailers and wholesalers will more readily want to deal with you.

But in addition to that there are several other benefits to adopting an EDI system when you’re a small business.

Limit Headcount With EDI

As you business grows you want to keep headcount to a minimum, and where you do hire you want it to be dynamic people who add value to the business.  The issue many small businesses come across is that they have to start hiring administrators early on to handle orders and accounting, because the volume of orders once handled by the start up team can no longer be dealt with by them.  This sudden inefficiency seems necessary at the time due to increased sales, and investment in software to manage it at this stage seems premature the sales volumes aren’t guaranteed.

However, by implementing EDI at the stage where headcount would have to be hired to manage these back office duties, savings can be made and efficiencies developed into the business culture which will serve it well as it continues to grow.

Increase Cash Flow With EDI

Another major stumbling block of fast growing start ups is cash flow being strangled by larger customers who order large quantities but then take longer to pay for that stock.  EDI systems not only speed up the transaction time, often reducing a week from order commencement to delivery, to perhaps just 24 hours.  But it also gets the invoice in the system much faster, in an automated system in fact, so its likely the invoice will be paid much faster than if being handled through two back office teams.  This increased cash flow should help the small business to continue to grow and benefit from large order quantities rather than suffer from them.

Develop New Business Strategies With EDI

EDI data allows a unique perspective, enabling you to see real time transaction data, and historical patterns in data which allow for taking pre-emptive steps to develop products, promotions and marketing strategies to keep up with and perhaps surpass market trends and demands.  Real time assessment of what is selling today and what the patterns have been over a longer period will help a small business manage their manufacturing quantities to ensure they do not over produce products which are old news, and start to develop new products which are now in more demand.