PEPPOL is a standard framework for safe electronic business document sharing across borders. The framework was created to facilitate trade between European countries in 2008.
Today, it has progressed much beyond its initial mission. As more and more nations begin to use electronic invoicing, taking advantage of PEPPOL’s solutions, it is imperative to understand how this tool works.
In this article, we'll walk you through how to use PEPPOL and outline the advantages of sending electronic invoices through the network.
Overview of PEPPOL
PEPPOL stands for Pan-European Public Procurement OnLine. The purpose of this EDI (electronic data interchange) protocol is to streamline the procurement-to-payment process for suppliers and government agencies.
To put it simply, PEPPOL makes it easier for government agencies and private businesses to order, invoice, and ship electronically.
The OpenPEPPOL organization uses a global network of contracts to regulate the use of PEPPOL.
It is crucial to understand that PEPPOL is not a platform but an open, international network.
Once joined, members of the network can share digital procurement documents with any other user using that single connection. PEPPOL is not an e-procurement platform.
It is a collection of technical specifications that may be applied to current e-procurement programs and eBusiness exchange services to enable interoperability across heterogeneous European systems. You can see the network as a telephone network for invoices.
When somebody sends you a text message, you can immediately recognize that person by their phone number. The same applies to receiving invoices through the PEPPOL network.
The receiver can easily identify the person - or company - that sends the invoice by their “PEPPOL ID.” PEPPOL encompasses the full tender and procurement process (e-procurement) and e-invoicing.
It backs the 2014/55/EU Directive on Electronic Invoicing in Public Procurement. PEPPOL’s benefits and vast potential have extended to Asia, Latin America, and North America.
"Connect once, connect to all" is its motto.
Brief history of the establishment of the PEPPOL network
The OpenPEPPOL Association developed PEPPOL. It was financed by the European Commission and the PEPPOL Consortium members when it was first launched in 2008 as a pilot project.
Its objective was to make electronic cross-border procurement easier.
The governments of Europe set up globally applicable technical standards to accomplish this goal, enabling direct electronic communication for procurement between companies and European government agencies.
This is the origin of the abbreviation PEPPOL, which represents Pan-European Public Procurement On-Line. Global e-procurement is now known by the brand name PEPPOL, which took the place of this acronym at the end of 2019.
With the removal of the terms "public procurement" and "pan-European" from the acronym, PEPPOL may more accurately represent how it is utilized today.
Of course, PEPPOL continues to be widely utilized in Business to Government (B2G) circles because of its experience with e-invoicing and e-procurement with public bodies.
Despite originating in Europe, PEPPOL quickly piqued the interest of companies, organizations, and entities worldwide.
PEPPOL infrastructure and standards have long existed in non-European nations, where governments often select them to promote electronic invoicing.
Numerous additional countries, such as Singapore, Japan, Canada, Australia, New Zealand, and American corporations, also use the program.
Understanding PEPPOL Authority
A PEPPOL Authority (PA) is a national organization that has been assigned the responsibility of overseeing a country's adoption of the PEPPOL electronic invoicing framework. The authority safeguards the interests of its country and registers PEPPOL Access Points.
Businesses receive their PEPPOL ID from an Access Point, which they use to transmit electronic invoices across the network. This is how companies and governments can automatically identify each other.
A nation's PA significantly impacts the e-invoicing process, supervising participation in the larger PEPPOL network and setting PEPPOL standards.
If you do cross-border business with companies and governments in Europe then you need to know what it is.
The first step to adhering to local requirements when sending e-invoices to businesses and governments worldwide is understanding what it is and what it accomplishes.
In order for local PEPPOL authorities to facilitate the adoption of standards and offer connectivity throughout Europe and beyond, they must be members of OpenPEPPOL.
The non-profit organization OpenPEPPOL is in charge of upholding PEPPOL requirements. Local PAs have jurisdiction over the use of the infrastructure, and the association oversees the network.
2008 saw the launch of the Pan-European Public Procurement On-Line (PEPPOL) project. The project aimed to create technical standards that all European governments might use to streamline cross-border electronic procurement.
Before PEPPOL, disparate nations' usage of e-invoicing standards made cross-border procurement less consistent. PEPPOL resolved these problems with interoperability.
Consequently, its services could not terminate in 2012 with the conclusion of the PEPPOL test project. Thus, OpenPEPPOL assumed control of the project's services and obligations on September 1, 2012.
Global public and private entities comprise OpenPEPPOL. The association maintains the PEPPOL network.
OpenPEPPOL manages PEPPOL via the local PAs that the implementing nation designates.
Vendors are then authorized by the regional PEPPOL Authority to offer access point services.
Storecove is one of the authorized PEPPOL Access Point Providers. We offer complete e-invoicing solutions that assist you in sending compliant e-invoices to foreign countries that meet the necessary standards and meet the demands of your local PA.
What is a PEPPOL ID?
As we previously mentioned, companies and governments can automatically identify each other with a PEPPOL ID.
A PEPPOL ID consists of a unique number, such as:
- A Chamber of Commerce number
- A VAT number
- The company’s bank account number
- The government identification number of the relevant government agency
Thanks to these unique identification numbers, there are no more misunderstandings about the identity of the senders and recipients of invoices. Because of this, ghost invoices and typing errors are no longer possible.
How to get a PEPPOL ID
Since so many people utilize the PEPPOL eDelivery Network, accurate user identification requires some sort of identity.
Direct registration on the PEPPOL network is not possible. You need to create a PEPPOL ID before connecting to the PEPPOL network.
You must register at a PEPPOL access point to obtain a PEPPOL ID. Therefore, selecting an Access Point Provider depending on your region and company needs is the first step in registering on PEPPOL.
Access point providers are the ones that offer PEPPOL access services. These are the businesses that link users to the PEPPOL network.
Comparable to the distinct phone numbers used to identify people in telecommunication networks is the unique PEPPOL identifier. You can identify your intended recipient through their unique phone number while sending a text message across a telecommunications network.
Similarly, when the recipient receives the message, they use the sender's phone number to identify them.
Here is a list of all the access point providers. Looking through each of their websites is a good way to find out more about their offerings. Your favorite access point provider will verify the information.
It usually takes one business day to verify this. You can use the access point and the software to keep track of your invoices.
After registering, you should take some time to browse the Directory. The directory is frequently referred to as the network's Yellow Pages. Verifying the document types that various network users support is helpful.
Additional details like the entity name, location, PEPPOL ID, and pertinent internet address will also be included in the list.
How do I connect to the PEPPOL network?
You must first be connected to a PEPPOL Access Point to be able to send e-invoices via the PEPPOL network. These Access Points fulfill a similar role as Vodafone and T-Mobile do for mobile users.
Following the “connect once, connect to all” principle, once registered, you can reach all PEPPOL users, regardless of which access points they are connected to.
How does the PEPPOL Access Point Work?
So, basically, a PEPPOL Access Point is a gateway to the whole network. An access point will give you international access to all other parties using the PEPPOL network, and you'll have your unique PEPPOL ID (like your mobile number) while on the network.
You can sign up with one of the over 200 certified Access Points available to gain complete access to the network.
The whole system involves the following four parties:
- The sender
- The recipient party
- The Access Points of both parties
Which documents can be exchanged on PEPPOL?
Countries from all over have set up their own unique e-invoice systems, which means that sending an e-invoice across borders can be troublesome for companies.
For instance, Sweden uses Svefaktura, EHF is Norway's e-invoice format, and NemHandel is used in Denmark.
To send an e-invoice from one of these countries to the other would require the sender to convert it to the recipient's format. This is time-consuming and can lead to a financial loss for the sender.
However, the EU has mandated the use of PEPPOL invoices as a standard for the public sector. Thus, PEPPOL replaces national standards with multinational/international standards.
This streamlines trade across Europe and makes e-invoicing much simpler than it would've been otherwise.
Besides sending and receiving e-invoices, you can use the network to:
- Exchange electronic orders
- Confirm orders
- Catalog goods
- Ship documents
- Exchange timecards
- Receive invoice responses
Countries that have adopted PEPPOL as their primary e-invoicing framework
The number of businesses asking for e-invoices through the PEPPOL network is strongly increasing mainly because this network is extremely safe and much safer than sending invoices by mail.
This is because the network, as mentioned before, provides its users with a unique ID that can be used as a point of recognition, resulting in an automatic recognition process for every transaction.
This is why many European and Asian government institutions increasingly ask suppliers to send invoices through PEPPOL. As such, many European and Asian suppliers are now, when doing business with the public sector, obligated to send e-invoices through PEPPOL.
PEPPOL is mostly used and managed by European nations because it is a European Commission program. However, global connectivity is growing. A PEPPOL Authority in your country indicates higher adoption rates.
Fifteen PEPPOL authorities oversee and manage national participants and set and oversee local standards. Their headquarters are in the following nations:
- New Zealand
These authorities are required to submit reports to OpenPEPPOL. This international non-profit organization assumed responsibility for the creation and upkeep of PEPPOL specifications in 2012 after the project, initially funded by the European Commission, completed its first phases.
Below, you will find an overview of the countries that have adopted PEPPOL as their primary e-invoicing framework. Some countries, such as Malaysia and Japan, have confirmed the future usage of the network and are currently in development.
The OpenPEPPOL website lists the specific government departments in the aforementioned nations that function as PEPPOL Authorities. Apart from these authorities, 39 nations (including South Africa, the United States, and Japan) are home to OpenPEPPOL members.
How to send PEPPOL e-invoices to other countries
Need to send e-invoices to other countries? Many companies have difficulties with this process. It doesn’t help that almost every country created its own e-invoicing formats, such as UBL, ZUGFeRD, Factur-X, FatturaPA, Finvoice, EHF, Svefaktura, BIS V2, and many more.
If, for example, you are a German company that needs to send an e-invoice to the Italian government, you must send FatturaPA invoices.
Germany, however, has a different e-invoicing standard called ZUGFeRD. This forces companies to find a way to create these invoices, which causes them to lose time and perhaps even money.
With Storecove, however, you don’t need to worry about the other formats. We help those who need to comply with e-invoicing regulations but cannot do so due to different rules, formats, and networks. Simply connect, and we do the rest.
Why use the PEPPOL network?
Businesses and organizations can profit from registering on the PEPPOL network in the following ways:
Significant cost savings associated with automation
Most companies that still issue invoices based on paper or PDF have significant processing costs for several reasons, including printing, manual handling by the sender and recipient, approval and review procedures, and data entry.
Furthermore, there's the cost of underutilizing employees who may be bringing more value to your business.
Decreased likelihood of fraud
There is a far smaller chance of invoice fraud, according to PEPPOL's operational and technical standards. A 2019 UK Finance study revealed that business-related invoice fraud cost £92.7 million over the reporting year.
Additionally, a lot of companies are unaware of how serious the threat is, given how simple it is for hackers to access a supplier's email account and alter the information on invoices that are delivered to the buyer.
Businesses are validated through the registration procedure, company number authentication, and listing on the OpenPEPPOL database. The network is far safer, thanks to the secure design than when exchanging paper or email-based bills.
Invoices are assured to reach their intended recipient thanks to the PEPPOL network. They don't require manual entry into an organization's accounting system because they are structured data files.
This contributes to the lower costs of eInvoicing through PEPPOL. It also saves staff time, as they aren't spending it looking for missing or incomplete data.
Faster payment reconciliation results in increased cash flow, which is a lifesaver for SMEs struggling in the current economic environment.
Easy ERP incorporation
Vendors offering ERP solutions may quickly establish a network connection. Without requiring additional software, they can make PEPPOL accessible to any company utilizing their solution.
This connects to your current software by leveraging the API of a PEPPOL infrastructure provider, eliminating the need for extra certifications or hosting.
Obtaining access to opportunities for public procurement
Since PEPPOL serves as the infrastructure that many countries require for B2G transactions, only companies registered on the network can submit bids for these kinds of government contracts.
As a result, becoming registered on PEPPOL broadens your market reach and provides access to public procurement opportunities.
PEPPOL enables easy document sharing across various government departments and enterprises, regardless of the software or systems they employ.
This is particularly crucial for cross-border transactions since various nations can utilize various invoicing standards. PEPPOL provides a "common language" that can be used in business documents.
In many nations, public procurement requires the use of PEPPOL. PEPPOL helps organizations meet compliance requirements, such as the European Union's requirement for electronic invoicing in public procurement.
So, companies can lawfully participate in public sector procurement by registering on PEPPOL, which guarantees compliance with local, state, and federal legislation.
PEPPOL streamlines the procurement process. It makes it faster and easier for businesses to receive payments from public sector organizations.
Cash flow also improves because bills are settled sooner due to the prompt delivery of invoices and other procurement documents.
PEPPOL provides a standardized way of exchanging electronic documents, ensuring that all parties use the same format and business processes, regardless of location.
PEPPOL's eInvoicing eliminates the need for printing and saves resources by not requiring any physical storage space. Thus, electronic data sharing has environmental benefits in addition to the ones above.
Takeaway: Register on the PEPPOL Network to experience smooth transactions
PEPPOL has brought trading parties together like never before. It has revolutionized how people worldwide do business, specifically in the EU.
The e-invoicing mechanism created by the PEPPOL network is safer, more efficient, and less expensive than conventional options.
Many see it as the next step towards establishing a truly globalized economy where every party can trade freely without border constraints and invoicing troubles.
Are you a large enterprise or software provider that needs help connecting to PEPPOL? Or do you want assistance with automating your invoicing process?
Storecove is here to help. We are one of the most reliable access point PEPPOL service providers. With Storecove, you won’t have to worry about cross-border complexities when sending electronic documents to other businesses or government agencies.
Storecove will connect you to the PEPPOL network, ensuring compliance with relevant regulations and seamless customer document transfer. Contact us for more information.
More information about PEPPOL
Do you want to know more about e-invoicing on the PEPPOL network?
- How to register on PEPPOL?
- The E-invoicing Regulations Per Country Overview
- How to become a PEPPOL Access Point?
- 5 steps to create your own UBL invoice