We live in a digital world. Our lives, businesses, documentation, and commerce are rapidly transforming from physical to digital. Gone are the days when you did business with someone and tucked the paper receipt of the dealing in an oversized folder.
Even PDF invoices sent through emails are old-school now. They followed no universal pattern and were not as secure as we’d like our transactions to be. Imagine someone hacking into your email account and forging your business dealings.
That is why the world came up with new technology. European Commission initially developed the PEPPOL project in Europe to simplify international E-invoicing. But the technology soon impressed many other countries with its interoperability, and the network now includes more than 35 countries.
If you, too, are looking to link your business to the PEPPOL network, there are a few concepts you need to clear first. This article will help you understand what PEPPOL is, its advantages, and how you become ready for it.
What is PEPPOL?
PEPPOL is a secure network for transferring electronic business documents across country borders.
The acronym stands for “Pan-European Public Procurement On-Line” since it abides by the European standards for sending business documents, such as invoices. But towards the end of 2019, the acronym was replaced by the name “Peppol,” which frees it from the European borders and makes it available for the rest of the world.
Peppol is a secure framework or network that operates internationally to enable the delivery of electronic business documents.
For the most part, these documents include e-invoices. However, you can also send and receive the following documents:
- Electronic orders exchange
- Orders confirmation
- Catalogue goods
- Shipping documents
- Exchange timecards
- Invoice responses
The PEPPOL project was initiated in Europe in 2008 by the European Commission to simplify international electronic procurement. The public sector widely uses the network, and it is still popular among B2G dealings.
The network soon brought several non-European countries onboard when 30 European countries were already relying on it for their global procurement.
Peppol operates by the following rules:
- Peppol operates via the OASIS Universal Business Language (UBL) format, as defined by ISO/IEC 19845.
- It has a directory service, the Peppol eDelivery Network, that includes identifications of all users, the processes they enable, and their access points.
What are the advantages of using PEPPOL?
Peppol gained immense popularity in public and private sectors mainly due to its interoperability and secure networking.
Several business owners, clients, suppliers, government institutions, and service providers use Peppol for seamless procurement and safety. Tax authorities are expected to join its users soon.
Here are a few advantages it offers:
- Higher cashflow
Peppol enables businesses to send and receive invoices swiftly without any unnecessary delays. It allows for faster dealing and better cash flow.
Peppol is not a platform that allows the transfer of business documents; rather, it is a network that will enable these transfers across different transfers. Hence, even if your business client uses another platform, you can still send them invoices through Peppol if you both subscribe to it.
- Secure data exchange
When it comes to business data, security is a big concern. Peppol offers unmatched security for your data exchange by allowing e-delivery through only Peppol access points.
- Universal pattern
You don’t need to juggle between thousands of e-invoice patterns and formats. By using just one European standard format, Peppol simplifies transfer protocols.
While most of its transfers constitute e-invoices, Peppol supports several other forms of business documents. You can send catalogues, shipping details, order confirmation, etc.
- No hidden charges
While most transfer platforms require a “membership fee,” Peppol is free for both senders and receivers.
Transferring documents via Peppol requires no incurring roaming charges. Hence, it is a cost-effective way to send invoices.
- Easy to use
You can easily convince the second party to join the network since it requires no bilateral contracts or double processes or systems.
How do businesses become PEPPOL e-invoicing compliant?
Business processes are digitalizing day by day. Even governments in many countries are implementing e-invoicing mandates. E-invoices are faster, cheaper, and safer than conventional paper or PDF invoices.
Many countries are considering Peppol as their e-invoicing platform. And rightly so. Peppol is different from other propriety platforms because of its interoperability. Plus, you can quickly transfer your documents to another business, even if it uses another procurement platform.
Due to several benefits, more and more businesses are opting for the Peppol network. What makes it even better is the fact that you can easily make your business Peppol e-invoicing compliant with the following steps:
- Connect to your local certified Peppol service provider (SP)
- The SP will connect your business to the Peppol eDelivery Network
- Obtain a Peppol identification number from your SP to start receiving or sending invoices
The Peppol ID number is like a telephone number through which you make and receive calls or SMS. You can quickly identify other companies or governments and avoid misunderstandings, typing errors, or ghost invoices thanks to these ID numbers.
When you connect to an SP, Storecove, for instance, you are signing up for one of 200 certified Peppol Access Points. These are like gateways to the whole network with all of its users. When you send a document through the portal, the document first goes through your access point, the network, your recipient’s access point, and finally to the recipient.
Hence, the Peppol network has four pillars:
- Sender party
- Sender party’s access point
- Recipient party
- Recipient party’s access point
Specific e-invoicing rules and regulations in different countries around the world
Presently, Peppol is operational in 31 European and multiple other countries worldwide. These include the US, Singapore, Canada, Australia, and New Zealand, while a few others like Malaysia are in the process of being afield.
Here are specific e-invoicing rules and regulations in different countries around the world:
To issue the invoices, you will need to provide the following details:
- Name and address of both parties
- Invoice number
- Due date and date of issue
- Product or service description: Quantity, price per item
- Total amount
- Bank account details
- Tax rate and supplier's VAT number
- Any discounts or early payment terms
You should archive your invoices for several years. To archive your invoices abroad, you need to fulfill the following conditions:
- The foreign country and your country need to agree on the safety of business data
- A genuine reason for storing the archives abroad
- Notification to local authorities
All e-invoices in the public sector in EU countries should comply with the European Standard EN16931. The standard includes:
- Format of the e-invoice
- Metadata of the e-invoice
- Structure of the XML file
The government of Iceland has set some rules regarding e-invoicing. The country supports EN 16931 CIUS format compliant with Peppol BIS 3.0 and mandates archiving for seven years.
To send and receive e-invoices in New Zealand, companies will need to acquire a New Zealand Business Number NZBN.
E-invoicing through Peppol started in 2019 in Australia. However, e-invoicing is not mandatory in the country until July 2022.
Romanian government made e-invoicing mandatory in September 2021. The standards for e-invoicing in Romania are in line with European standards. The format used is SR EN 16931.
Scandinavia has the most updated system for e-invoicing. For e-invoicing in Scandinavian countries, you must abide by European standards and national formats.
E-invoicing in Poland follows Peppol’s BIS 3.0 billing standard since the Polish government has not yet released a national Core Invoice Usage Specifications (CIUS).
In Ireland, the format for e-invoicing is Peppol BIS, whereas the public sector uses a CIUS-CEFACT format. Also, in Ireland, archiving your e-invoices is mandatory for six years.
In Luxembourg, e-invoicing adheres to the Peppol BIS 3.0 standard, does not require a digital signature, and mandates archiving for ten years.
In Spain, an electronic invoice should follow an XML format called FacturaE and should be archived for at least five years.
The e-invoices in Egypt should follow a JSON or XML format and contain a digital signature.
Mexican e-invoices are known as the CFDI. They follow XML format, require an electronic signature key (FIEL or e.firma), a digital signature, and should be archived for at least five years.
In India, e-invoices are used for GST through the government GST portal. The format supported is JSON, and the platform is GST Invoice Registration Portal (IRP).
The exact e-invoice formats in France are unspecified. Chorus Pro is France’s official e-invoice solution, and it accepts the UBL format.
E-invoicing will become mandatory in Japan in 2023. The country relies on Peppol for its procurements.
XRechung is Germany's mandatory format for e-invoicing, while the national platform for e-invoicing is ZRE.
Belgium uses Peppol and Mercurius as e-invoicing platforms and follows the Peppol BIS V3 format.
Several countries are now switching to Peppol as their e-invoicing platform and network of choice due to its ability to save billions of dollars. During the recent economic dip due to the pandemic, more and more countries hopped on board to stabilize their economies.
Peppol provides numerous advantages to big and small companies and governments. The network consists of four parties: the sender, the receiver, and access points. A reliable service provider, like Storecove, ensures that your business transfers through Peppol carry on smoothly.
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