Requirements for e-commerce in procurement

   19 Jan 2021

Every year, the state, the regions, and the municipalities buy goods and services for hundreds of billions through public procurement. Unlike private purchasing, there are regulations that govern how the public sector may make purchases. One of the requirements that has been added in recent years is that e-commerce in some form must exist.

Upphandling

Tutorial to provide support

SFTI, Single Face To Industry, presented in November 2020 a new updated version of a guide to provide support to contracting authorities and entities when they make demands on e-commerce in connection with procurement of goods, services or construction contracts.

Behind SFTI are Sweden's Municipalities and Regions (SKR), the Swedish Chamber of Commerce, the Agency for Digital Administration (DIGG) and the Procurement Authority. SFTI was created because there was a need for an organization with representatives of both public buyers, suppliers of goods and services as well as IT system suppliers who will implement the standard that SFTI recommends.

Standardized messages

If standardized messages are used in the exchange of information between the respective e-commerce system, both parties can profit from the benefits of an efficient digital business process. The guide provides support for evaluating the own organization's conditions, analyzing which e-commerce messages may be relevant for, for example, invoices, orders, delivery notifications and catalogues, and for designing the requirements in the procurement document.

The EU is working to digitalize the purchasing process to make all the different phases from electronic advertising to invoice management happen automatically using electronic methods.

Mandatory e-invoicing

Since April 2019, it is the law that all purchases in the public sector must be invoiced with an electronic invoice. This was introduced to streamline public administration throughout the EU. The use of e-invoices is considered to reduce the authorities' handling costs and avoid errors. The law covers all purchases, including direct procurement. However, cases covered by confidentiality are excluded.

SFTI recommends that the invoice is created in the format Peppol BIS Billing 3, and from 1 April 2021, the format Svefaktura for public buyers and their suppliers is no longer recommended.

Keep in mind that a PDF invoice is not the same as an e-invoice.

Alternative ways to e-shop

We are all used to e-commerce in different ways, there are those companies who were involved in the beginning already in the 90s and those that have not yet taken the step. There can be several different ways to e-commerce with the contracting authority or entity even if a complete e-commerce system is not in place. It is important to think about which solution will be most cost-effective and be aware that the manual steps will increase if e-commerce is not fully in place.

The e-commerce requirement can look different depending on who it is that procures, if it is an authority or unit that previously has a functioning process for e-commerce, it is more likely that a more advanced system for e-commerce is required to be able to make purchases. as one is now accustomed to. Then the time limit for having a working solution on site can also be shorter, compared with if a completely new e-commerce solution is to be developed where the suppliers can be given more time in the agreement to present a more integrated e-commerce. There is also an opportunity in the procurement to benefit those who can offer the added value that e-commerce creates for the organization.

If you are interested in being a part of this purchasing process, it is important that you offer e-commerce in some way as a sales channel. By using e-commerce, the entire process from procurement, ordering, payment and follow-up can be streamlined and unnecessary administration cut.

Punchout solution

Many companies today require that an order go through their own purchasing system and then a so-called punchout solution can be a way to simplify purchasing for this type of customer. Punchout is a technology that enables purchasing systems to collaborate with e-commerce stores. More and more suppliers are choosing to integrate their e-commerce with the customer's purchasing system to increase sales and offer a more personalized purchasing process, feel free to read more about punchout solutions.

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