Home IT infrastructure Don’t rush to switch to EDI and EDS today: pitfalls you might not know about

Don’t rush to switch to EDI and EDS today: pitfalls you might not know about

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Don't rush to switch to EDI and EDS today: pitfalls you might not know about
The situation for business in Russia even before the quarantine was not ideal. But in the spring of 2020, external circumstances overturned previously made plans and forced companies to adapt sharply to the new realities. The transition of employees to remote work posed questions that previously did not need to be addressed. For example, how to organize the printing and transfer of documents?
Many people have thought about switching to electronic document management (hereinafter EDM) and using electronic digital signatures (hereinafter EDS). Companies that provide these services have quickly prepared promotions and implemented the positioning of EDI and EDS as a profitable alternative to remote printing and scanning of documents. But is this true in practice?
Let’s look separately at the two components – printing volume and printing costs – using real-life examples of companies that have tried EDI and EDS before 2020. We’ll add a legal brief and break down the technical side of the issue.

Reduced print volume : ambiguous results

Companies that implemented EDI and EDS a few years ago have already gathered statistics on the impact of new technologies on print volumes. The results have been mixed.
Some people’s overall print volume is down, but not enough to make the implementation pay for itself; some people’s print volume is down in one department, but up in another. Let’s look into why that happened.

Insufficient decrease in print volume

EDI covers only a small fraction of the printing that is done in the office. Studies show that the average office document "lives" from several hours to one business day. When EDI and EDS are introduced, one of the employees gets the right to sign a document electronically and upload it to an online archive. But where does the data for this document come from?
For example, the manager signs an agreement using an EDS and uploads it to the EDI. But he received the data for the contract in paper form: from counterparties or from employees who do not have EDS. It’s the same story with reports in accounting. Even if the final document is uploaded to the EDI and signed by EDS, the accountant prepares it on the basis of printed and signed documents from employees who do not have an electronic signature. If all employees are obliged to send the one who draws up a contract or a report, the documents in electronic form, they will also print out and sign by hand the document, and then scan it. Thus, the introduction of EDS and EDI will not affect most of the printing in the company in any way.

Print volume dropped in one department, but increased in another

The company implemented EDS and EDI to avoid printing transaction documents with counterparties. The amount of printing in the sales or purchasing department has gone down. But increased in the accounting department. Why?
First, because the accounting department (rightly) doesn’t trust the integrity of documents in EDI. As long as you can’t rule out system failure, data loss or corruption, every electronic document is bound to have a hard copy.
Secondly, because accountants know that during the tax audit to confirm transactions FTS requests documents in paper form: the originals, primary documents. Therefore, accountants will print and file the closing documents for each transaction in the appropriate folder. The volume of printing of one department simply goes to another department.
And even saving on copies for the counterparty is not always unambiguous. Because every counterparty with EDS and EDI also shifts the obligations of printing to those with whom they interact.
It happens that the implementation of EDI increases (!) the amount of printing. One company introduced electronic transmission of intermediate versions of documents while preparing the final one. Previously, six employees read and signed a printed agreement sheet: each of them made corrections and then passed it to the other one. The final version of the document was scanned. Now the signatories received an electronic version of the document. However, the habit of working with paper remained: each of the 6 employees typed a document, made corrections with a pen, copied them electronically and sent to the next in the chain. Conclusion: instead of one document six documents were printed. The volume of printing increased by 6 times!

Reduced print volume : conclusions

Before implementing EDI and EDS, take a close look at the business processes within the company. These technologies are effective only when their implementation will significantly reduce the amount of printing and its costs. And remember that you are still not getting away from printing reports for regulatory authorities and as insurance in case of archive failure and data loss or distortion.
Don't rush to switch to EDI and EDS today: pitfalls you might not know about

Cost cutting : opposite results

Implementing EDI and EDS may provide some savings in printed sheets. But what about the money?
Suppose that a company prints a lot and wants to get rid of costs for printers, consumables and service. One EDS costs from 1000 to 6000 rubles a year, depending on the area of the company. Introduction of EDI costs about 3000 rubles per month (1C system, sending 100 sets is included in the price, each additional set – 10 rubles).
If you issue an EDS to 1 employee, then with the right amount of documents, he will not be able to do any other tasks. Only to check and sign invoices, contracts, bills of lading, certificates and so on. Therefore, to the cost of EDS and EDI the annual salary of the signatory will be added. And it is unlikely that the signing of any documents, including financial statements, will be entrusted to a person on a low position with a small salary. It is simply not safe. There is another problem: what will happen if the only employee with an EDS gets sick, goes on vacation or quits his job?
You can have an EDS for 10 employees, but this costs from 10 to 60 thousand rubles per year. And another, at least 36 thousand roubles for the EDI operator.
If you implement software, the annual API license for the use of EDI (computer "Diadok") will cost 18 thousand rubles. The same company offers the services of an intermediary: from 4, 200 rubles per month for the transfer of 600 documents to 68.4 thousand rubles per month for the transfer of 12 thousand documents.
And you have to add the cost of printing documents to any EDS and EDI costs, because a company can’t completely eliminate it.

Cost reduction: temporary transition to EDS and EDI

Some firms are aware of the pitfalls listed above, so they are not considering a permanent transition to EDI and EDS. But in a quarantined environment, they rush to temporarily adopt these technologies to save money on remote printing arrangements.
The minimum package for 1 employee costs from 3 thousand to 5 thousand rubles per month. At the same time, the same employee prints about 300-500 sheets each month. The cost of printing 300-500 sheets, including equipment, service and consumables costs the company from 500 to 2 thousand rubles (the final figure depends on the format and printing parameters, as well as equipment). Therefore, before temporarily introducing EDI and EDS, compare the cost of maintaining the office infrastructure remotely with the cost of switching to other technologies. And be aware of hidden costs.

Cost cutting : conclusions

Temporary or permanent implementation of EDS and EDI is optimal only when the cost of the transition itself and the residual costs of printing do not exceed the current costs of printing. Therefore, at the initial stage, clearly define the volume of printing that you cannot give up.
The experience of companies that have tried EDS and EDI shows that in most cases the results do not match expectations. For example, the process of signing, transmitting and receiving documents in accounting significantly accelerated, but the total costs increased.
To cut costs during quarantine, explore all the ways you can optimize your printing costs. Perhaps you can save on remote equipment diagnostics or find supplies at an older rate. And if you are firmly convinced that you need to switch to EDS and EDI, make a plan for implementation and clear criteria for choosing a provider. And calculate in advance the amount of printing that cannot be refused.
Don't rush to switch to EDI and EDS today: pitfalls you might not know about

Legal reference

There are several legal aspects to the use of EDI and EDS. According to legal experts, courts are skeptical of electronic documents and are reluctant to accept data in this form.
Second question : the retention period of documents. Unlike paper media, in EDI the data is not subject to disposal after 3-5 years. And in some situations this is useful. However, last year the Supreme Court almost abolished the statute of limitations on violations of tax laws. Different situations happen in a company’s life, so it’s worth consulting with lawyers about the impact of EDI and EDS on the nature of requests by regulatory authorities.

The technical side of the issue

Let’s start with security. If the EDI vendor is a third-party company, then document security depends on their security system. What happens to the archives if the customer stops using EDI or decides to change operators?
There is also the issue of dependence on the outsourcer. One company failed to submit its EDS renewal to Sberbank on time and could not use Sberbank online for two weeks. Because it was someone else’s IT specialist who was connecting the services, and there was no way to affect the speed of his work.
Simple technical breakdowns also happen: the accountant or the manager cannot sign and send documents because the software does not work. A company IT person gets involved and negotiates with an outside IT person. They look for the cause of the failure and a way to fix it. And for that time, the organization’s activities are frozen. Partners do not receive signed contracts and invoices for payment or paid invoices, employees do not receive their paychecks, government agencies do not receive requested documents.
If a company implements EDI and EDS comprehensively in-house, then who is responsible for the security of the archive inside? Either the IT service will have additional obligations or they will hire a special employee. Perhaps someone from the staff will be retrained. These are additional costs, but the main questions are: who in the company will have access to the archives, and what should be the structure of the security protocols to prevent information leakage or purposeful distortion of data?
An additional problem: what if none of the organizations with which the firm interacts use EDI? The accountants of one company told us that they have to keep two documents: paper for the partners and electronic for internal use. According to them, in areas of maximum responsibility, they print internal documentation as well. Because not all employees are equally versed in handling EDI. And if experts for one reason or another are not in the office, it is easier to ask colleagues to pull up a paper archive than to explain over the phone how the system works. The risks of data loss are too high.

Conclusions

There are companies for which the implementation of EDI and EDS is the best optimization of internal processes and interaction with counterparties. But for other organizations, electronic signatures and electronic document management do not bring tangible benefits. To understand what type your company belongs to, compare the cost of printing with the optimized cost of printing and the cost of temporary/permanent transition to EDS and EDI.

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