Peppol is an international electronic purchasing network that makes e-commerce and e-procurement much easier. It enables fast, secure and borderless trade and is open to all. It is both a digital infrastructure for business transactions and a standard for business messaging. In this post, we take a closer look at how we, as a certified service provider and access point, help our customers use technology in their everyday lives.
Quick and easy
A major advantage of Peppol is its simplicity. There are no individual setups or complicated contracts required for each unique business relationship. Once connected to the network, you can easily and smoothly send customer invoices to any of the 800,000 registered invoice recipients. With the help of Peppol's central register, it is easy to reach a large number of receivers with little effort.
By registering as an invoice recipient, you will be ready to receive invoices from your suppliers in just a few minutes. Connecting to e-invoicing for new customers and suppliers is automatic and requires no testing.
A traditional invoice project needs a direct communication, a unique communication path with the recipient's system provider. Then the parties have to agree on the message standard, a test invoice needs to be sent, and only when it is approved can you go into production. This usually takes about two weeks, and often the long time is due to the human factor, i.e. that the people in charge on both sides have time to complete the project. With Peppol, however, it is very quick and easy to get started and connect with new customers and suppliers.
More than just invoices
The vast majority of our Peppol customers today use the network for invoices, but others also use price list, catalog, order, order response and notification. For e-commerce with these types of business messages, some testing may need to be done, but the standardization makes it easy and smooth. More and more people see the possibilities beyond invoice management, they see an even greater value in using both the Peppol network and the Peppol standard.
Peppol enables breaking the 80/20 rule
The 80/20 rule, or Pareto principle, means that 20% of the causes account for 80% of the results. In other words, 20% of customers account for 80% of turnover. The other 80% of customers are often too small or too infrequently recurring to be profitable to automate their business flows. With Peppol, that threshold disappears, as only a low staff effort is required, which means a low cost. It becomes economically justifiable to connect smaller or infrequent customers. With Peppol, it becomes profitable to digitize even small flows, as the handling is clear and standardized.
The comparison could be made with 'The Long Tail' theory, a term coined by Chris Anderson, editor-in-chief of Wired magazine, in a 2004 article. In short, the theory suggests that the 80% of products that are least demanded can also be made profitable by e-commerce, thanks to low or no inventory costs. The expression comes from a demand curve where the distribution on the left represents large volumes, and on the right the curve falls rapidly to form a long tail. The total value of the niche products, or in this case the smaller customers, can be as large as the big sellers, as the threshold for profitability is much lower and the tail has the potential to be as long as it wants to be. Anderson has also published the book "The Long Tail: Why the future of business is selling less of more" (2006, Swedish translation 2007).
Image by Hay Kranen (Wikipedia Commons). The long tail is highlighted in yellow.
How much does it cost?
There are different pricing models depending on what best suits our customers' unique situations. Today, there are essentially two ways to pay for your digital business process flows. Either through a service where you pay a fixed amount per month or year, or through a service where you pay for the number of transactions communicated through the service. In the first option, you have a fixed cost that makes it easy to budget. No matter how much you increase or decrease your business transactions, the cost remains the same. In the second option, the cost varies depending on how the business increases or decreases its business transactions. Regardless of which option you choose, it is interesting for us as a service provider to get an idea of the volume of transactions the service will receive, store and send.
Security
As a certified operator, we guarantee that your business messages are sent securely, that they reach the recipient and that they are fully traceable. Validation by the sender's access point ensures that the messages are in the correct technical format. All access points are required by the rules of the Peppol network to perform a check on the users sending information, which means that the risk of fraudulent invoices or similar is significantly reduced compared to paper invoices and open invoice portals. Peppol is a network of trusted users.
Future-proofed
Thanks to standardization, switching access point providers is simplified, and when switching, you keep your electronic address on the network and access to your connected customers and suppliers. The entire "mailbox" is moved, so your customers and suppliers will not notice any difference.
Will Peppol be a good choice for our customers?
With Peppol, the process is streamlined and it's quick and easy to connect with more players. We help our customers to have a fast and secure way to communicate with their customers and suppliers, both in the retail and manufacturing industry (although the automotive industry has its own solution). Peppol is a good choice for both large and small business relationships.
Peppol can be used together with existing business systems and complement existing e-commerce solutions. For some customers, Peppol is integrated directly into the existing certification system. There are also solutions where suppliers and customers are automatically added to Peppol upon registration in the business system.
What drives the use of Peppol is of course cost savings, but also legislation, as it is now a legal requirement for Swedish municipalities and regions that all purchases must be invoiced electronically according to the Peppol standard.
Want to know more?
Do you think this sounds interesting? Do not hesitate to contact us at +46 (0)451-514 00 or info@tyringe.com if you want to know more about joining the popular Peppol network.
At tyringe.com/en/solutions/trade/ you can read more about our trading solutions.