Versa Cloud ERP Expert: EDI

Webinar Replay

Presented by Kathy Phelan
EDI or Electronic Data Interchange is a concept of electronically communicating information that was traditionally communicated on paper, such as purchase orders and invoices. In this webinar, we’ll discuss how it works and how you can use it. Join us on May 26, 2020, for an interactive discussion, where we can answer your questions.

EDI Webinar Transcript

So welcome, everybody. Thanks for taking the time to attend this webinar. For those of you who have not attended one, I'm joined by my colleagues, Richard and Kathy and we look forward to you know, taking your questions at the end of this webinar. And you know, hopefully leaving you a little bit more knowledgeable about EDI

after we are done

if you have any ideas about additional webinars that we should do appreciate receiving those ideas, and we will try our very best to explore those subjects in a webinar down the road. The next two webinars will cover is the topic of integration, we get that word thrown around quite a bit. So we will talk a little bit about it, what can be specifically, we talked about our API. And then there are a few other topics that we want to talk about. We haven't made a decision. So on July 7, we will be talking, we will publicize what we'll be talking about in the next couple of days.


Moving along the agenda, as before is a main topic, we will cover EDI and then start a q&a around that. And then we usually in these webinars cover two or three issues that come up in our support queue in the last two weeks and discuss those. Also, talk about some of the new features we've released into the Last week, okay, and wrap up. Typically, these webinars take 30 to 45 minutes. Sometimes they're shorter, sometimes longer, but not very much more than an hour at the maximum.


To start, as people who have attended this webinar in the past know, our focus is really to talk at a very high level, about an issue about a capability, make you aware that that's capability is supported in versa cloud, and just provide an overview. If you want to get into a deeper discussion about a particular topic, Then please reach out to us and we can engage in a one on one discussion, you know, do a demo, talk about costs, how to train someone how to enable something or how to implement etc. those tend to be very customer specific and we'd prefer and it's really not possible for us to sort of get into every permutation or combination, so we prefer one on one conversation.


This slide should be familiar we've used it prior to those who have attended before we used it in prior presentations and webinars. And this is just an overview slide of what the different integration methods are between versaccounts and different systems out there, including marketplaces, shopping carts through 3PL, etc. Today, we are going to focus on the two sort of red arrows at the bottom of the page, labeled EDI. And that is our focus for today. The other topics will be the other sort of methods of integration. We've covered some of them in prior webinars, and we will continue to cover them when we talk about API and we talk about integration, etc. There's a lot to be said about all of this. So our focus today is very specific on customers who need to deal with the issue or need to understand the issue of EDI, maybe for something that they think they would need to do in the future or perhaps it's an issue facing you today. And you want to deal with it. You want to understand it.


Moving ahead, then, the first question is why implement EDI and typically nobody will implement EDI because they just love EDI, and they want to do it. The main reason tends to be your trading partners and we will talk about what trading partners mean. But either your customer or your supplier or somebody in your network supply or demand in demands that you do it. And that is the typical reason. Sometimes it may be because you think the automation is required the automation is required because of high transaction volumes, complex orders and you don't want to make mistakes to manually dealing with data entry etc. And you may do that EDI putting it in is a process. It's not just something you turn on. It's a you have to go through the implementation process and then the costs are significant. It's not something that and we'll talk about that, as we move along. It's not something that you sort of just one day wake up and decide to do.


When we talk about EDI, it's also important to understand that there are many, many, many EDI standards. So when someone is talking about EDI, they could be talking about any of these standards, and it's pretty easy for you to get confused by googling something. So, typically, when you deal with EDI, you want to really focus on what needs to be done, what are the demands of your trading partners, what automation you need, and then focus on that very, very small slice rather than on trying to sort of get some kind of even higher level, confidence or something. Kind of comprehensive understanding of even one of these standards, because within the standard itself, there'll be very few things that apply to your situation unless you're a very big company, which most of our customers are not.


So the short answer to you know, so how does one go ahead and deal with this whole issue of standards? With EDI, The main way to deal with it is your trading partner knows typically, you're sorry, EDI gateway provider, and we'll talk about what that is in a second, but they are the people who know the people who provide you the gateway EDI service to connect with your trading partners with your customers or suppliers. Know what you need. They know the standards that the other side your customer or supplier implements. What are the transaction sets? You know whether they want you to send PO's or invoices or bills, whatever it is by EDI, what are the fields that must be in those PO's, what must be the format that you're even within the EDI standard format of a file that is centered across the transaction that is sent across is different depending on trading partners, so the EDI Gateway that is in business to know what each one of your partners want, and then make that happen for you. So whether it's, you know, the fields and the transaction set of all the files that are transferred, the method of integration or the testing required, they will help you with this


So let's get into a little bit of EDI related terminology. The first our analogy refers to trading partners on the right trading partners can be as I mentioned earlier, it can be your customers, your suppliers, your 3PL etc. Any event buddy who you do business with, to help you do business. So those are called trading partners. They are the third parties that you deal with the transaction said the particular interactions you have with your trading partner, you exchange invoices with them you send an ASN to them you you know whatever it is that you do, send a PO receive a PO whatever it is you do those of our transaction sets and EDI and then the EDI I services provider is called an EDI gateway or EDI van. And these are the people who know what all the demands are what all the requirements of your trading partners, including transaction sets they expect from people who do business with them. And so those are the three sort of pieces that you need to understand EDI. The fourth piece is how does your EDI then interact with Versaccounts? How does it incorporated into the workflow of your ERP provider? And there are many ways to connect. And then there are workflows that flow through your EDI gateway to your ERP. So you know some EDI Vans support an API integration. Others supported File exchange for an FTP integration. Some may allow you to upload and download. So you download from Versaccounts upload into the EDI gateway. Or sometimes you just have to sort of type you know, do manual you have to do manual entry. So if you have to send something from the gateway to your trading partner, you may have to type it in and they usually provide a portal to do all of that to do the uploads downloads of the manual entry. So that is essentially the terminology into high level that you need to keep in mind when talking about EDI.


There's a little bit of a twist if you are dealing with many of the the so called dot com marketplaces that are provided by the brick and mortar stores. So the big box stores like Walmart or Macy's or Home Depot or staples and even if you're selling to Amazon, for instance, where they're buying goods from you rather than selling through vendor central for instance. In that case, you may be required to use commerce hub as a further intermediary between your EDI and that trading partner. So that when you when you deal when you talk to your trading partners in these different marketplaces, you need to find out whether they talk directly to your EDI provider or through commerce hub and you can read find that out through your EDI gateway. So that's something to keep in mind that at the end of the day, when you're dealing with VDI, you may be dealing with Versacounts as your ERP provider, EDI gateway commerce hub, as well as your trading partners. So it can get quite complicated quite fast. And that's why it takes time to put this system in place and to get it going and tested. And then to operate it, you have to deal with three different entity, four different entities.


So let's examine an EDI workflow then, as a way to understand how sort of it all works. So let's imagine that you are starting on the right hand side as a customer that send the bills So all EDI transactions have number of transactions that have numbers associated with them. So let's assume you start on the right hand side with an 850 p o at the top, the red arrow and send it to the EDI Gateway, which in turn will forward it on to the rather your customers sending you the PO as an order that they want you to fulfill. This is an example of the order to cash cycle so they send you a peel and the epi gateway forwards it to your accounts electronically. Let's assume somehow through an integration that is then examined by your sales staff. And it doesn't have to be but let's assume in this case, you want to look at all orders and make sure you know the pricing etc and the quantities etc correct and the And then Versaccounts turns around and sends that peel on through the API gateway, the onto the 3PL so that's those red arrows that you see over there as an 850 po that reaches the 3PL are your third party logistics provider that's in charge of fulfillment. So at the bottom you see in the dark green arrow, 3PL then takes this purchase order and ships the goods that's lot green arrow, and then the light green arrows going up from the 350s from the 3 PL which is the 836 ASN, it goes to your EDI Gateway which then sends the advanced shipping notice to your customer as well as sends it to you. Once you receive the ESN perhaps your workflow is Once your 3PL confirms the goods have been sent, you turn around and users accounts and send them an 810 invoice. So, couple of things. This looks complex because it is there two trading partners that's all we have here is two trading partners, the 3PL and your customer other trading partners yet if you look at it, there are 10 transactions that have taken each arrow. Each solid arrow is a transaction which is different from a transaction set. Transaction set is refers to the type of transaction but the actual transaction is the amount of traffic so there are 10 transactions and therefore transactions sense. This is material so 10 different things. had to happen before your order was completely fulfilled and you sent an inverse. This is material because the complexity of these kind of pictures that you draw when you're planning out your EDI implementation is going to drive the cost of your implementation which will be typically based on number of trading partners and transaction sets as well as your monthly charge from your EDI Gateway provider which will be based on transactions or transaction sets. So you can see that just to get this one order through, you're going to be charged for 10 transactions.


Similarly, we can look at the purchase to pay cycle here the transaction cycle starts on the left rather than the right.

And the two sort of trading partners here I have supplier on the right and you 3PL at the bottom. You send a purchase order the red arrow is the purchase order in stock starts at the top right in 850 your supplier, a copy is sent to the supplier and a copy is sent to a trading partner or to your 3PL trading partner to let the 3PL know that they should expect some goods from the supplier in the future. And so that they can compare and make sure that all the goods received. When the supplier gets the 850 bo they may if that may be the protocol. And that's shown by the second arrow on the upper right, called the 855. Po act that then basically is sent to the EDI gateway saying, Yes, I got the po, and it stays at the 855 at the gateway. Because that's the way it's been designed. It could be that that 855 PO would come back to her. So I just want to show you that that's an option. Once the suppliers sees the 850, then you go all the way to the bottom and the dark green arrow the goods are shipped to your 3pl receives it in their system and sends an 867 another Green Arrow, it 861 sorry, receipt to your gateway and that gateway then transmits on to Versa at which point of course ahead of shipping the goods This, what the supplier does is also send you an 856 ASN, which is a light green arrow after the 855 po app, which is also sent to essentially Versa through the EDI gateway so that Versa knows that goods are coming once the goods are received in the 3PL and the 3PL informs Versa to the 861 Versa knows that pretty soon they're going to see an invoice and sure enough, they receive an invoice from the supplier for the goods that were delivered and that is shown by the purple arrow which is the 810 invoice. So once again, you know you see 1-234-567-8910 11 transactions here And so again, just to place an order on your supplier and receive the goods, you had 11 transactions. This is the simple case. And also a typical case, at least for small companies.


The next slide, I'll cover additional sort of transaction sets that your trading partners not all of them expect everything.

Each one is different they may expect as a way of dealing with you to you know, conduct business with you. So, it can get complex pretty fast, the traffic between you and your trading partners can get complex and get heavy pretty fast. And as a result, the fees that you are charged can go up pretty fast. So, EDI is not something that you sort of lightly just wade into.


When you talk about fees ,the fees that you will be charged will be by versa and the EDI gateway. Versa will charge you a setup fee, and then a fee for ongoing support. The second fee will be can depend on the transaction sets. And the number of trading partners as does the EDI gateways set up. The ongoing support fee is a fixed fee. And then sometimes you may need a server to integrate between the EDI gateway and versa. Most EDI gateways provide that server but if you want versa to provide one they can that can be done as well for an additional fee on the EDI gateway side, you will be paying a fee, monthly based on the transaction volume, not the transaction sets, but the total volume of transactions and is likely to be subject to some minimum amount every month.


Then, of course, the same thing applies if you have commerce hub, that is one more setup that would need to be done and additional set of fees that need to be paid.


Here is an example. So just to get an idea of sort of order of magnitude here is an example from one of our customers. This is just to give you an order of magnitude three transactions transaction sets involved and you know, they end up paying about $7,500 one time and ongoing minimum of 1040 a month. So, you know, this is typically instead of sometimes 500, you may pay 3500 or 5000. And you know, you may have paid 900 a month instead of 1040. But that is the order of magnitude that you will be paying. So, for this to make sense your level of business using an API gateway should be appropriate with your trading partner.


Now, having said all that, one thing is important to know when you go and talk to one of these large companies to sell your product to them customers,

they may tell you that EDI is required. But they don't really mean that.

For companies below a certain volume, they provide a portal, typically a trading partner portal, you know, they call each one called a different where you can actually upload quote unquote EDI transactions and download transactions and manually enter transactions. So initially that may be sufficient until your level of volume you know, your business volume actually picks up and you really do need. You get you you typically outgrow your sort of, if you're successful, you'll outgrow your trading partner. Because you'd be over a certain dollar volume, and they'll say, Okay, now go and, you know, sign up with an EDI Gateway provider and interact with us that way. But to start, you can start with a trading partner.


The next step is signing up with the EDI gateway and dealing with your trading partners that way. Once again, you do not have to integrate your EDI gateway with Versa just yet. You can use the portal that is provided by the EDI gateway and upload and download your transactions there or manually enter them there until your volume is sufficient. So in this stage, you are incurring EDI gateway fees typically setting up with the need EDI gateway, without integration with your erp a lot cheaper than with integration with ERP, just their fees alone.


And then finally you can sort of go to a completely integrated system when the level of business actually justifies it. So that is something to keep in mind. It's not, you know, a big bang, you either have EDI or not.

There is sort of a step by step approach to this. And if you follow that, then EDI can be less of a burden. And if you try to sort of consume the whole elephant in one gulp and, you know, go with a big bang approach. So that would be our sort of recommendation to early on. If you have a need come talk to us and we are happy to share our experience with you and help you. So that brings us to the end of the EDI portion of our webinar. Are there any questions? Any webinar ideas? Any questions? We'll wait a few seconds here. I see. Kathy has a couple of questions for us. Okay. Okay, so the first question is, what is the length of a typical EDI onboarding? Unfortunately, the answer is it depends on the complexity of the EDI implementation, how many trading partners you want to implement? How many transaction sets what is the workflow because when your implementing EDI, the sort of sequence of things that need to happen. Which transactions set should be used when, with whom, all of that sort of is negotiable and part of the discussions so it depends but I would say maybe one to three months. It's a project. So you will set up your gateway provider, we'll set up a project and then that as our design and implementation and test phase, and then you know, you go through that whole process. There can be curveballs in the process like when our customers’ 3PL went out of business mid project, they had to start a new 3PL start over and it was, you know, they had to use new software.

The other question here is then do we have a preferred EDI gateway provider? No, we don't. We don't do any revenue sharing or any sort of arrangement with other companies do with these providers. So we don't have any of that. The bigger ones are SPS commerce, true commerce. But anyone use sort of sign up with, we will work with them. The main thing is to share with them who your trading partners are, find out whether they've done work with them before have they do they understand the requirements of the trading partner, and then get a quote from them and you know, just look into how their customer service etc is over a period. have time, maybe online reviews, etc. Because that's important. What's important is not just the price, but also when things break down, you're not getting orders from your trading partners, then, you know, what do you do? So that's the way to select an EDI gateway provider, but we're happy to work with any ones that you have eventually chosen again, come talk to us and we can share our experience. Let's move on then to the questions in the support queue. I will let Kathy you want to jump in and talk about these two questions that you picked for this webinar from our support queue and then Richard will talk to us a little bit about some of the new features that were added in the last two weeks and he will also talk about why it was important to add them. So go ahead, Kathy. Okay.

So the first question is how can I do an inventory adjustment on a second warehouse. So your facilities in Versa are at the very top of your screen, if you have more than one facility. So in order to do an adjustment in another facility, you have to change to that facility first. So at the top you would select the facility you need to make change to and then you just navigate to the inventory adjustment screen just like you would for your main warehouse or facility and then just go to products and then inventory adjustment. The second one is, how can I bulk update existing customer records via import, like adding a dimension to all of your customers if say, you're going to change the structure of how you're going to do things. So as you probably know, we have an imports and exports feature. And you would use that to accomplish this. You would add the dimension, you take the file that you pull down from Versa that has all your customer records in it. And then you would, under the dimension field, you would put in dimension that you have in Versa so that you're tracking that you want to add, would assign which dimension to the customer that they fall into. And then once you have that information in the file, you would save it and import it back into versa. You would use the DIM department, column in the file.

And then once you import that back into versa, all those dimensions will be filled out for you, and you don't have to do it one by one.

Okay, great. Thanks, Kathy.

That's it's funny that for most of us, many customers say, well, what's the big deal? I already knew this but you like sharing these because there are many other customers who, probably using the facility for the first time and didn't even know they couldn't do it. So we just try to find those kinds of questions from our support, queue and share with everyone.

Because companies grow, they change. They may have added warehouses they didn't have at the beginning or they want to track their customers differently. Added want to add a dimension. So that's how we do more reporting. Yeah, yep, that's how we grow.

Okay, so let's move on to what we have added to the product in the last week or two. Richard is here. Richard, do you want to just talk about these three items that we selected?

Sure. Yeah. So the first one is basically when you have work order. For those of you who use work orders, you can relate a purchase order to a work order, meaning that you know, I'm going to use the quantity. Once the appeal is recieved for this work order. Previously, you actually have to commit the material to the work order once the po is recieved So this is the matching that will once you receive the Po automatically commit them material to the appeal to the work order. So that is used right away. So just a way to sort of skip a step in your processing. The second one is there are some customers that actually have issued negative invoices as credits for their customers. The aged receivable detail previously was not showing anything that's negative, but for reporting purposes, people sometimes do want to see that so that they see that the customer has a credit on file. So now there's new options added to the age receivable Detail Report, allowing you to see negative invoices, numbers. The third one is we did a bunch of a UI organization you know, there's a lot of information being shown for customers and supply records. So we kind of organize those details into different tabs on the screens so you can,click on the different tabs to see the details. Just a way to sort of organize the information better.

So those are the three items.

Thanks, Richard. Um, yeah. So I mean, the thing with the, the feedback we get from customers is that they spend a lot of them look at the release notes that come out every Tuesday usually, and so to try to understand them. If you find something interesting, but don't sort of understand how it might apply to your business, please reach out to us and talk to us about it. And we can discuss how it may or may not apply and if it does, we can show you how to use it. So that you can adjust the way you do business to, hopefully make it more efficient for you or for you to get better insights. product, for instance, like number two.

Okay with that we are ready to end the session for today.

We thank you for attending, and look forward to seeing you at the next Webinar.

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Tue May 26th, 2020 12:00 PM PST

EDI or Electronic Data Interchange is a concept of electronically communicating information that was traditionally communicated on paper, such as purchase orders and invoices. In this webinar, we’ll discuss how it works and how you can use it. Join us on May 26, 2020, for an interactive discussion, where we can answer your questions.


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