EDI Cost per Transaction

How much does each of your EDI transactions truly cost? Probably more than you think. EDI cost is never a single line item. To understand how much you are spending per transaction, you must consider all of the cost elements. Here are the big ones:

  • People Costs – Clerical, management, IT, and other employees spend some or all of their time on EDI. Accurate time estimates must be translated into fully burdened labor costs. This is almost always the largest EDI outlay.
  • Chargebacks and Deductions – Retailers levy stiff penalties for non-compliance. This is a real cost of EDI, and one that can be reduced with careful attention.
  • Cash Collection Delays – If EDI errors stretch the time between order fulfillment and collection, the cost of money factors into total EDI costs.
  • EDI Services – Out-of-pocket costs paid to value added networks, webforms suppliers, or other vendors are direct EDI costs.
  • Software and Hardware – Expense of software and computers includes not just the three-to-five-year amortization of investments, but the ongoing costs of maintenance and facilities overhead.
  • Profit Opportunity Cost – Delays in onboarding trading partners postpone or prevent sales, reducing top line revenue and resultant profits.

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Spreadsheet includes cost example.