EDI on the Street

Host 1

Welcome to EDI on the Street.

Host 2

EDI on the Street. Here at GraceBlood.

Host 1

That’s right. We talk all about EDI.

Host 2

All things EDI.

Host 1

All things EDI and how it impacts the supply chain.

Host 2

Yeah. You know, it’s interesting because we think about the supply chain, and there are so many moving parts, right?

Host 1

Oh, absolutely. And today we’re going to be focusing on a really interesting area. We’re going to be talking about how CFOs and other financial leaders are really taking advantage of EDI data and using it to make smarter decisions for their company overall.

Host 2

Absolutely. Yeah. I think when a lot of people think about EDI, they think about the electronic exchange of information like invoices, purchase orders, all that stuff, which is very important—don’t get me wrong. But there is a huge amount of data that flows through these systems that CFOs can really use to get a competitive edge.

Host 1

Yeah. So it’s not just about the day-to-day paperwork. It’s about, like you said, getting that competitive edge. They’re using it to improve their profitability and also drive growth for the future.

Host 2

That’s right. And we’re going to talk about how this helps reduce costs, strengthen relationships with partners, and ultimately just support better decision-making across the board.

Host 1

Yeah. And it all starts with just thinking about the role of a CFO. Back in the day, a CFO was kind of like a bean counter, right? They just looked at historical data and reported on it.

Host 2

Yeah. But nowadays, CFOs are much more involved in the strategic direction of the company. They’re looking forward, and they’re using this EDI data to help shape the future of the business.

Host 1

Okay. So let’s get into some of the nuts and bolts of EDI. For people who may not be super familiar with it, at its core, EDI is about automating the exchange of crucial business documents. You think about invoices, purchase orders, shipping notices—all this stuff that used to be done with paper is now being done electronically.

Host 2

Which is great for efficiency, but also for data accuracy. Like you were saying, before, you had so many errors when people were manually entering data. Papers getting lost. People typing in the wrong numbers. It’s just a mess. But with EDI, it’s all automated.

Host 1

And I imagine that EDI helps speed up certain business cycles that are really critical to a company’s financials.

Host 2

Oh, absolutely. Like the order-to-cash cycle.

Host 1

Oh, yeah. Order to cash. Like how quickly can you get paid after you make a sale, right? Because if you’re waiting 90 days to get paid, that’s going to impact your cash flow.

Host 2

Right. But if you get paid in 30 days or less because it’s all automated, that’s going to make a huge difference. The same thing goes for procure-to-pay, which is basically how you pay your suppliers. If you can automate that process, then it’s going to save you time and money and reduce errors because you’re not having to manually process all these invoices.

Host 1

Yeah. So it’s really a win-win all around. And I imagine this has really big implications for CFOs because they’re the ones who are ultimately responsible for the company’s financial health. So if you can give them a real-time view of their financial operations, that’s got to be incredibly valuable.

Host 2

Oh, it’s incredibly valuable. They can see things like supplier performance. Are your suppliers delivering on time? Are they meeting their contractual obligations? They can also see customer activity. Who are your best customers? Are they buying more or less than they used to? You can use that information to segment your customers and create targeted marketing campaigns. You can also track cash flow. How much money is coming in and out of the business at any given time? They can see if there are any potential problems on the horizon and take steps to correct them before they become big problems. And it’s not just about looking backward. It’s about looking forward. You can use this data to make revenue projections.

Host 1

So, like forecasting?

Host 2

Exactly. Forecasting. Then you can say, “Okay, we’re likely to make this much money next quarter.” Based on historical trends and current data, you can start to plan accordingly. Make sure you have enough inventory on hand. Make sure you have enough staff. Make sure you have the cash flow to handle that increased demand. It’s really powerful stuff.

Host 1

So it’s really not just about the automation itself. It’s about how that automation fuels all of this data analysis and strategic decision-making that can really impact a company’s bottom line.

Host 2

Absolutely. In a positive way. And it gets even better.

Host 1

Oh, okay. How so?

Host 2

When you connect this EDI data with your other business systems.

Host 1

Like what kind of business systems?

Host 2

Like your ERP system. For example, Dynamics 365 Business Central. When you connect your EDI data to that system, you can get a really holistic view of your business operations. You can see how your sales are impacting your inventory levels. How your procurement is impacting your cash flow. All of this stuff is connected.

Host 1

So it’s really about breaking down the silos.

Host 2

Breaking down the silos between different departments and getting everyone on the same page, using the same data to make better decisions. That’s how you really start to optimize your business.

Host 1

That’s amazing. So it sounds like EDI data is really like this hidden gem for CFOs and other financial leaders that they can use to really transform their operations.

Host 2

And it’s not just about cost savings. It’s about revenue growth. It’s about risk management. It’s about improving customer relationships. It’s about supplier relationships. It really touches every aspect of the business in some way.

Host 1

Okay. So let’s dive into a few specific examples of how EDI data can be used to achieve these benefits that we’ve been talking about.

Host 2

Sure. Let’s start with financial visibility and forecasting.

Host 1

Okay. So how can EDI data help CFOs get a better grip on their cash flow?

Host 2

One of the big things is that EDI provides a real-time record of invoices being sent, payments received, and outstanding balances. CFOs can develop really accurate cash flow forecasts, which is huge because then you can see potential problems coming down the road instead of just being surprised by them. Let’s say you have a customer who’s consistently late with their payments. You can see that in the EDI data, and you can take steps to address it.

Host 1

Like what kind of steps?

Host 2

Well, you could talk to the customer and try to work out a payment plan. You could offer them a discount for early payment. You could even charge them a late fee if necessary. But the point is you have the data to back up your decisions, and you can be proactive instead of reactive. That’s really important in today’s business environment because things move so quickly. You can’t afford to be behind the curve. You need to be ahead of the game. EDI data can really help you do that.

Host 1

Absolutely. So that’s cash flow. What about revenue and expense trends?

Host 2

Well, EDI data can also help you track those. You can see how your sales are trending. You can see how your costs are trending. You can use that information to make better budgeting decisions. For example, let’s say you see that your sales of a particular product are declining. You can investigate why that is. Maybe there’s a new competitor on the market. Maybe the product is becoming obsolete. You can use the data to figure out what’s going on, and then you can make adjustments. Maybe you need to lower your prices. Maybe you need to discontinue the product. But you’re not just guessing. You have the data to back up your decisions.

Host 1

And I imagine that data can also be useful for optimizing working capital.

Host 2

Absolutely. Working capital is essentially the cash that a company has on hand to fund its day-to-day operations. If you can optimize that, then you’re going to be in a much better position to grow your business.

Host 1

Absolutely. So how does EDI data help with that?

Host 2

Well, it gives you visibility into your payment cycles. You can see how long it takes you to collect payments from your customers, and you can see how long it takes you to pay your suppliers. You can use that information to negotiate better terms. For example, let’s say you see that you’re consistently paying your suppliers within 30 days, but it’s taking you 60 days to collect payments from your customers. That’s a problem because you’re essentially financing your customers’ operations. You can use the EDI data to go to your suppliers and say, “Hey, I’m a good customer. I pay on time. Can you give me some extended payment terms?” They might be willing to do that because they want to keep your business. Then you can go to your customers and say, “Hey, I need you to pay me faster, or I’m going to have to start charging you late fees.” That’s how you optimize your working capital.

Host 1

Okay. So it’s really about using the data to your advantage.

Host 2

Exactly. To negotiate better terms with both your suppliers and your customers. I imagine that can have a significant impact on your bottom line. What’s really interesting to me is that we can take this data and apply more sophisticated analytical techniques to it, like predictive analytics and machine learning, and use those to really get ahead of the curve and anticipate things that might be coming down the road.

Host 1

That’s right. So how does that work?

Host 2

Well, with predictive analytics, you’re basically using historical data to identify patterns. Then you can use those patterns to make predictions about the future.

Host 1

Okay. So, for example, you might be able to predict which customers are most likely to churn.

Host 2

Exactly. Or which products are most likely to be returned. Then you can take steps to prevent those things from happening. With machine learning, you’re essentially teaching computers to learn from data. The more data you feed them, the better they get at making predictions.

Host 1

So it’s like this continuous learning process where the computers are constantly getting smarter.

Host 2

That’s right. That can be really powerful for CFOs because it can help them make better decisions about everything from pricing to inventory management to risk management.

Host 1

Absolutely. Okay. So we’ve talked a lot about the benefits of EDI data. But let’s talk about some of the challenges because I imagine it’s not always easy to extract this data and make sense of it.

Host 2

You’re right. It’s not always easy.

Host 1

So what are some of the hurdles that CFOs face?

Host 2

Well, one of the big challenges is that EDI data is often siloed. It’s spread across different systems, and it’s not always easy to bring it all together in one place.

Host 1

So it’s like a data integration problem.

Host 2

Exactly. Even once you’ve brought the data together, you need to be able to make sense of it, and that can be difficult because it’s often very technical. It’s not like looking at a spreadsheet.

Host 1

So you need people with specialized skills.

Host 2

Exactly. To be able to understand and interpret this data. Those people can be hard to find and expensive. It’s not always easy for companies to justify the investment in building out these capabilities, especially small- and medium-sized businesses. They might not have the resources to hire a team of data scientists or build custom software to analyze their EDI data.

Host 1

So that’s where tools like VelociLink come in.

Host 2

Okay. VelociLink—that’s a GraceBlood product.

Host 1

That’s right. VelociLink is a supply chain analytics platform that makes it easy for companies to extract value from their EDI data. It’s designed to overcome some of these challenges that we’ve been talking about.

Host 2

So, how does it work?

Host 1

Well, VelociLink connects to all of your different EDI systems, and it pulls all of the data into one central location.

Host 2

So it solves the data integration problem.

Host 1

Exactly. Then it cleans the data and transforms it into a format that’s easy to understand. So it’s no longer just a bunch of code. It’s actually meaningful information.

Host 2

And then what?

Host 1

Then VelociLink provides you with a variety of tools to analyze the data.

Host 2

Like what kind of tools?

Host 1

Well, we have dashboards that give you a high-level overview of your key performance indicators. We have reports that you can use to drill down into the details. And we have alerts that notify you when something important happens.

Host 2

So it’s like a one-stop shop for all of your EDI data needs.

Host 1

Exactly. And it’s designed to be user-friendly, so you don’t need to be a data scientist to use it. Anyone can use it.

Host 2

That’s great. So it sounds like VelociLink can really help companies of all sizes unlock the power of their EDI data.

Host 1

That’s right. And that can lead to all sorts of benefits like improved financial visibility, reduced costs, and better decision-making.

Host 2

That’s right. So it’s really a game changer

Host 1

Absolutely. So if you’re a CFO and you’re not already taking advantage of your EDI data, I urge you to start today. Don’t wait. It’s a valuable asset that can help you take your business to the next level.

Host 2

That’s right. And VelociLink can make it easy.

Host 1

Absolutely. So what are you waiting for? Give it a try.

Host 2

So, I think that’s about all the time we have for today.

Host 1

Okay. But I want to thank you for joining us.

Host 2

Yeah. Thanks for having me. I hope you learned something new about the power of EDI data.

Host 1

Me too. And if you have any questions, please don’t hesitate to reach out to us. We’re happy to help.

Host 2

So, until next time.

Host 1

Until next time.

Host 2

This is EDI on the Street signing off.