The 4-corner model of the Peppol network
The Peppol network uses a so-called 4-corner model. This model divides communication between four parties:
The sender (corner 1) - The organization that sends the invoice.
Sender's Peppol Access Point (corner 2) - Responsible for sending the invoice to the network.
Recipient's Peppol Access Point (corner 3) - Receives the invoice from the network.
The recipient (corner 4) - The organization that receives the invoice.
An important aspect of this model are the Peppol Access Points. These access points facilitate the secure and reliable exchange of electronic documents within the Peppol network. They ensure that messages are sent and received correctly, and offer services such as validating documents against Peppol specifications. To enable communication within the Peppol network, two important components are used: Service Metadata Publisher (SMP) and Service Metadata Locator (SML).
The SMP contains information about the participating parties, such as the technical capabilities and document formats they support.
The SML acts as a central directory that points to the correct SMP for a given recipient.
Step by step: Send an invoice via Peppol
Step 1: Prepare invoice (Corner 1)
The sender, for example a company in the Netherlands, creates an electronic invoice in their natural business system. This invoice must comply with the Peppol BIS (Business Interoperability Specifications) standard.
Step 2: Shipping via Peppol Access Point (Corner 2)
The invoice is sent to the sender's Peppol Access Point. This access point validates the invoice against the Peppol specifications and ensures that it meets all technical requirements. The invoice is then forwarded to the Peppol network.
Step 3: Reception by receiver's Peppol Access Point (Corner 3)
The Peppol network uses the SML to determine which SMP contains the recipient's data. The recipient's Access Point receives the invoice. This Access Point carries out additional validation and ensures that the invoice is correct and complete.
Step 4: Invoice received by the recipient (Corner 4)
The recipient, for example a company in Germany, receives the validated invoice via their Peppol Access Point. The invoice is integrated into the recipient's natural business system, where it can be processed and paid.
Advantages of the 4-corner model
The 4-corner model offers several advantages over traditional communication methods. All companies registered on Peppol have completed a "Know Your Customer" (KYC) procedure. This means that all participating parties have been thoroughly screened and validated, which increases the security and reliability of the transactions. KYC procedures help prevent fraud and illegal activities by verifying the identity of the companies and ensuring they comply with relevant regulations. This allows companies to do business within the Peppol network with confidence, knowing that their trading partners are legitimate and reliable.
The 5-corner model and the ViDA initiative
The 5-corner model builds on the 4-corner model by adding a fifth party, which is often a tax authority. This party provides regulations. By adding this compliance layer, tax authorities can more efficiently monitor transactions and reduce tax evasion.
The ViDA initiative plays a crucial role in this by ensuring a harmonized approach to VAT reporting across Europe. This initiative aims to create an integrated system that allows real-time data exchange, allowing tax authorities to respond more quickly to possible irregularities and fraud. The 5-corner model fits seamlessly with these objectives by offering a reliable and standardized way of data processing and verification.
What is the SMP?
All participating organizations within Peppol (such as contracting authorities or suppliers) publish their receiving capabilities (delivery addresses, supported business processes and document types, etc.) using a service called a Service Metadata Publisher (SMP).
The purpose of the SMP is similar to an address book or company register containing details of participants on Peppol.
Typically, an SMP is offered as an addition to an access point as it publishes details for customers of the access point who wish to receive e-documents.
The Procurement Service Bus SMP from eConnect is one of the very few OASIS SMP compliant solutions that has successfully passed all SMP compliance tests.
