What is Peppol?
Definition and background
Peppol (Pan-European Public Procurement OnLine) is an international network and set of agreements that allows connected organizations to exchange electronic documents. The goal of Peppol is to simplify and standardize electronic trade by providing a standardized infrastructure for exchanging business documents such as invoices and orders. Peppol is not a portal or service provider for data exchange, but a network that enables public and private organizations to send and receive business documents via their chosen Peppol-accredited service provider within an open and secure network.
History and development of Peppol
Peppol was launched in 2008 as a project of the European Commission to promote cross-border electronic trade and increase interoperability between different e-invoicing and e-procurement networks. In 2012, the project was completed, and responsibilities were transferred to OpenPeppol, an international non-profit organization. OpenPeppol manages the specifications and standards of Peppol and ensures their continuous development and support.
How Peppol works
Peppol uses a four-corner model where buyers and suppliers are connected via their own Peppol Access Points. A Peppol Access Point acts as a connection point between the sender and receiver of electronic documents, enabling secure and reliable exchange. This model eliminates the compatibility issues of previous three-corner models and provides a standardized way to exchange information.
Importance of Peppol in current business
Peppol plays a crucial role in current business by helping companies digitize their procurement and invoicing processes, leading to significant efficiency improvements and cost savings. The standardization and interoperability provided by Peppol ensure that companies can easily communicate with their trading partners, regardless of their location or the software package used. Additionally, Peppol contributes to compliance with legal and fiscal obligations, which is increasingly important in a digital economy. Peppol has become a globally recognized standard, accepted and mandated in more and more countries for public procurement.
E-procurement and E-invoicing
What is e-procurement?
E-procurement refers to the electronic procurement process where organizations purchase goods and services through digital means, usually via the internet. This process is often referred to as Procure-to-Pay (Purchase-to-Pay) or P2P. The P2P process includes all steps from searching and selecting suppliers, obtaining quotes, placing orders, receiving goods, to paying suppliers. E-procurement systems automate these steps, leading to a more efficient, transparent, and cost-effective procurement process.
Benefits of e-procurement for companies
E-procurement offers various benefits for companies, especially when the P2P process is fully automated using Peppol. A key benefit is that Peppol Invoice Response Messages provide status updates at every stage in the process, from order to payment. This ensures: • Complete automation: By using Peppol, companies can automate the entire P2P process, including receiving status updates on the delivery and payment of goods and services. • Improved efficiency: Automation reduces manual processes, saving time and costs, and reducing the likelihood of errors. • Faster payments: Research shows that e-invoices are paid faster. Thanks to automatic status updates via Peppol, companies know exactly when an invoice is approved and paid, leading to improved cash flow. • Better control and transparency: Real-time insight into the procurement process helps companies better monitor and manage, contributing to better compliance with policies and agreements with suppliers.
What is e-invoicing?
E-invoicing refers to the electronic sending, receiving, and processing of invoices. An e-invoice meets the same legal requirements as a paper invoice, such as including a unique invoice number, VAT number, and Chamber of Commerce number of the sender. In an e-invoice, the data is always in a fixed place with a fixed coding, allowing for automatic processing.
Benefits of e-invoicing for companies
E-invoicing offers significant benefits for companies: • Speed: E-invoices are delivered faster and demonstrably paid faster. • Accurate data: The fixed coding ensures that there is no doubt about the value of the data, such as the invoice date and due date. • Security: The origin of the e-invoice is known, and the network is secure, making e-invoicing safer than sending invoices via email. • Automatic booking: Thanks to the fixed coding and reliable sender, it is possible to book an invoice automatically. This is supported by using a booking proposal, where a robot automatically generates booking proposals for each invoice based on criteria.
Benefits of digital exchange
Improved efficiency and cost savings
Digital exchange of documents via networks like Peppol offers significant benefits in terms of efficiency and cost savings. By automating processes such as e-procurement and e-invoicing, companies can eliminate manual steps, leading to faster and more accurate transactions. This not only reduces administrative burdens but also decreases the likelihood of human errors, which in turn lowers operational costs.
Fewer administrative errors and faster processing times
The fixed coding and standardization of data in e-invoices ensure that there is less room for errors in document processing. This leads to faster processing times, as data does not need to be entered manually and errors can be immediately identified and corrected. Faster processing times contribute to quicker payment of invoices, resulting in improved cash flow for companies. Peppol's four-corner model ensures that data exchange is secure and reliable, contributing to a more efficient workflow.
Better traceability and transparency
One of the major advantages of using digital networks like Peppol is the improved traceability and transparency of transactions. Every step in the process can be monitored and tracked, giving companies real-time insight into the status of their procurement and invoicing documents. This not only helps in complying with legal requirements but also improves internal control and management of business processes.
Improved sustainability through reduced paper usage
By switching to digital document exchange, companies can drastically reduce their paper consumption, contributing to sustainability and environmental friendliness. Electronic invoicing and procurement eliminate the need for physical documents, leading to less paper waste and a smaller ecological footprint. Additionally, companies can improve their image with customers who highly value sustainability.
ViDA (VAT in a Digital Age)
What is ViDA?
ViDA (VAT in a Digital Age) is an initiative by the European Commission aimed at modernizing and digitizing VAT administrations within the European Union. The goal of ViDA is to combat tax evasion, increase tax revenues, and improve the efficiency of VAT administrations by utilizing digital technologies.
Objectives of ViDA
ViDA aims for the following objectives: • Combating tax evasion: By implementing digital controls and reporting systems, it becomes more difficult for companies to evade VAT. • Increasing tax revenues: Improved compliance and control allow tax authorities to collect taxes more accurately and efficiently. • Efficiency improvement: Digitization of VAT processes reduces the administrative burden for both companies and tax authorities, making processes faster and more accurate.
How ViDA combats tax evasion
ViDA uses advanced digital technologies to combat tax evasion. One of the main tools is the implementation of real-time reporting systems, where companies are required to submit transactions and VAT returns digitally. This allows tax authorities to immediately detect and address suspicious activities. Additionally, the standardization of data exchange ensures that the reported information is consistent and reliable.
ViDA and the role of Peppol
Peppol plays a crucial role in achieving the objectives of ViDA. As a standardized network for the exchange of electronic documents, Peppol supports digital VAT reporting and helps companies comply with ViDA requirements. By using Peppol, companies can automate their VAT reporting, leading to fewer errors and faster processing. This contributes to the overall efficiency and reliability of the VAT system within the EU.
Peppol as a global standard
International acceptance and implementation of Peppol
Peppol has evolved into a global standard for the exchange of electronic documents such as invoices and purchase orders. Initially developed for the European market, the network has now found international acceptance. Countries like Singapore, Australia, New Zealand, and Canada have adopted Peppol and integrated it into their national e-invoicing infrastructures. This adoption helps companies conduct cross-border business with a standardized and reliable method for document exchange.
Examples of countries and regions using Peppol
• Europe: Peppol is widely accepted in Europe, with countries like Norway, Denmark, Belgium, and the Netherlands mandating e-invoicing via Peppol for transactions with the government. Countries like Germany, France, and the United Kingdom have also integrated Peppol as one of the channels for electronic invoicing: • Germany: In Germany, e-invoices for federal authorities must comply with the XRechnung standard, but Peppol is also actively used and supported. Germany is developing a national electronic invoicing platform, ZRE, which serves as an intermediary for e-invoicing. • France: France has integrated Peppol via the Chorus Pro platform, which supports various invoice formats, including UBL and Factur-X. Peppol is recommended for both B2G and B2B transactions. • United Kingdom: The UK continues to use Peppol for certain B2B transactions despite leaving the EU. This supports interoperability and facilitates cross-border trade. • Asia: Singapore was one of the first countries in Asia to adopt Peppol and implement a national e-invoicing system based on Peppol standards. In Singapore, the system is known as "InvoiceNow" and is widely supported by the government and businesses. • Australia and New Zealand: Both countries have adopted Peppol as the standard for e-invoicing. The Australian government encourages businesses to use Peppol by guaranteeing quick payment terms for e-invoices. In New Zealand, the use of Peppol for e-invoicing by the central government is mandated.
Future developments and trends in Peppol
Peppol continues to develop and expand, focusing on improving interoperability and adding new functionalities. Future trends and developments in Peppol include: • Expansion into new markets: Peppol is expanding into new regions such as Africa and Latin America, with countries like the Philippines, Botswana, and Kenya scheduled for implementation in 2024, followed by Malaysia, Oman, and other countries in 2025. By 2026, countries like Singapore and the United Arab Emirates (UAE) will adopt Peppol. • Integration with emerging technologies: While not yet widely implemented, the integration of technologies like blockchain and artificial intelligence (AI) is being explored to enhance security, automation, and data analysis within the Peppol network. • Expansion of use cases: Peppol is already used for more than just e-invoicing. The network also supports order management, shipping messages, credit notes, and more. These expansions help companies digitize and optimize their entire procurement and sales cycles. • Regulatory pressure: As more governments recognize the benefits of standardized e-invoicing, they are likely to mandate broader adoption of Peppol. In the coming years, more countries outside of Europe, such as in Asia, Africa, and the Americas, will join the Peppol network.
Security and compliance
Security standards and protocols within Peppol
Peppol places great importance on security and confidentiality in the exchange of electronic documents. The security standards and protocols within Peppol include: • ISO 27001 certification: Peppol Access Points must comply with ISO 27001, an international standard for information security, ensuring that data is securely stored and transmitted. • PKI (Public Key Infrastructure): Peppol uses PKI to ensure the integrity and authenticity of transmitted documents. This system ensures that documents are not altered or intercepted during transport. • AS4 messaging protocol: The AS4 messaging protocol is used for communication between Peppol Access Points. This protocol provides a secure and reliable way to send and receive documents. • Use of Peppol IDs: These unique identification codes ensure that documents are accurately routed and delivered, contributing to the overall efficiency and security of the network. Peppol also offers other security measures such as data encryption during transport and the use of digital signatures to ensure document integrity.
Legal aspects of e-procurement and e-invoicing
When exchanging electronic documents via Peppol, companies must comply with various legal requirements. These requirements vary by country but generally include: • Legal invoice requirements: Invoices must meet the legal requirements of the recipient's country, such as mandatory fields including VAT number, invoice number, and date. • Archiving requirements: Electronic invoices must be archived for a certain period, depending on local regulations. This is important for tax audits and compliance. • Data protection: Companies must comply with data protection laws, such as the General Data Protection Regulation (GDPR) in the EU, to ensure the privacy and confidentiality of processed data.
Compliance with international and local regulations
Peppol ensures that companies can comply with both international and local regulations by providing a standardized approach to the exchange of electronic documents. This includes: • Interoperability: Peppol's standardized formats and protocols ensure interoperability between different systems and countries, helping to comply with various regulations. • National Peppol Authorities (NPAs): These authorities oversee compliance with Peppol standards and support companies in implementing and complying with local regulations. • Certification and auditing: Peppol Access Points and service providers are regularly audited to ensure they meet the required standards and regulations.
How companies can protect their data
Companies using Peppol do not need to worry about implementing complex security measures, as Peppol offers several built-in security protocols. This includes: • Encrypted data transfer: All data transmitted via Peppol is encrypted, ensuring secure document transfer between parties. • Reliable access points: Companies connect to the Peppol network via accredited Peppol Access Points, which comply with strict security standards and undergo regular audits. • Authentication and authorization: Peppol uses strong authentication and authorization mechanisms to ensure that only authorized users have access to sent and received documents. • Digital signatures: Documents sent via Peppol are equipped with digital signatures to ensure the integrity and authenticity of the information. By using Peppol, companies can rely on a robust security infrastructure without having to implement additional measures themselves. This makes it easier for companies to remain secure and compliant when exchanging electronic documents.
Technical standards and interoperability
Overview of Peppol's technical standards
Peppol uses standardized technical specifications to ensure interoperability between different systems. These standards are designed to ensure that electronic documents can be exchanged consistently and efficiently between trading partners, regardless of their software or geographic location. The main technical standards of Peppol include: • Peppol BIS (Business Interoperability Specifications): These specifications define the structure and content of electronic documents such as invoices, orders, and shipping messages. Peppol BIS ensures that documents are prepared and processed uniformly. • AS4 messaging protocol: This secure messaging protocol is used for communication between Peppol Access Points. AS4 provides a robust and reliable way to send and receive electronic documents, with built-in functions for data integrity and security. • UBL (Universal Business Language): UBL is an XML-based standard for electronic business documents. Peppol uses UBL to standardize and facilitate data exchange.
The importance of interoperability
Interoperability is crucial for the success of electronic document exchange via Peppol. It ensures that different systems can communicate seamlessly, eliminating the need for manual data entry and the associated errors. The benefits of interoperability within Peppol include: • Efficiency: Standardized data exchange allows companies to streamline their processes and increase efficiency. This includes the ability to book invoices from one accounting system directly into another using Robotic Process Automation (RPA). RPA uses automated systems that can generate booking proposals, reducing manual entry and errors, and speeding up processing time. • Cost-effectiveness: Reducing the need for multiple systems and manual interventions leads to lower operational costs. • Consistency and accuracy: Standardized documents ensure consistency and accuracy, which is essential for reliable business operations and regulatory compliance.
Integration with existing systems and software
Peppol is compatible with existing business software and systems, allowing companies to continue using their current infrastructure. This is made possible by the standardized formats and protocols used by Peppol. Key aspects of this integration include: • API connections: Many ERP systems and financial software packages offer API connections that allow integration with Peppol Access Points. This ensures seamless data exchange between different platforms. • User-friendly platforms: There are various “plug-and-play solutions” available that enable companies to quickly connect to the Peppol network without major system adjustments. For example, the Dutch market leader eConnect offers a platform where users can create an e-invoice. This makes it easier for companies to use Peppol without extensive technical knowledge. • Support from service providers: Peppol-accredited service providers offer support and tools to facilitate integration with existing systems. This includes configuration assistance, technical support, and ongoing updates to ensure systems remain compatible.
Examples of successful implementations
There are numerous examples of companies and government agencies successfully using Peppol for their electronic document exchange: • Italy: Italy has mandated e-invoicing via the Sistema di Interscambio (SdI), leading to improved transparency and efficiency. This system aligns with ViDA objectives by combating tax evasion and improving tax collection. • Poland: The Krajowy System e-Faktur (KSeF) in Poland is a central platform for the exchange of e-invoices between companies and government agencies. This system is designed to enable real-time monitoring by tax authorities and supports ViDA objectives by strengthening VAT compliance. • Netherlands: The Dutch government has mandated Peppol for e-invoicing between suppliers and government agencies, leading to improved transparency and regulatory compliance.
The Dutch situation and the Dutch Peppol Authority (NPa)
The role of the Dutch Peppol Authority (NPa)
The Dutch Peppol Authority (NPa) is responsible for overseeing the implementation and management of the Peppol network in the Netherlands. The NPa ensures that Peppol Access Points and service providers comply with the established standards and guidelines, and guarantees the interoperability, security, and reliability of the network. This oversight contributes to compliance with both national and international regulations regarding e-invoicing and e-procurement.
Obligations and standards in the Netherlands
In the Netherlands, the use of Peppol has been mandated for e-invoicing in transactions with the government since April 2019. This means that all suppliers doing business with the government must submit their invoices electronically via Peppol. The standard used for this is the Peppol BIS (Business Interoperability Specifications). These specifications ensure that invoices are sent and received in a uniform and standardized manner, contributing to the efficiency and reliability of the processes.
Implementation and support
The primary focus of the NPa is on supporting service providers and companies connecting to the Peppol network. Although the NPa itself does not offer training or workshops, it facilitates an environment where accredited Peppol Access Points, such as eConnect, provide support and tools for integration with existing systems. This support includes configuration assistance, technical support, and ongoing updates to ensure systems remain compatible.
Specific applications and benefits in the Netherlands
The use of Peppol in the Netherlands offers various benefits for both the government and companies: • Efficiency and cost savings: By standardizing and automating the exchange of electronic documents, companies can make their invoicing and procurement processes more efficient and cost-effective. • Transparency and compliance: Although companies themselves are not directly involved with the ViDA initiatives, these European initiatives will eventually influence Dutch regulations. By using Peppol, companies can proactively comply with future legal requirements and remain compliant with evolving regulations. • Better cooperation with the government: By using Peppol, companies can collaborate more easily and efficiently with government agencies, leading to faster payments and improved cash flow.
Prospects and future developments
The NPa remains committed to the further development and improvement of the Peppol network in the Netherlands. Future developments include: • Expansion of Peppol use: In addition to e-invoicing, Peppol already supports other business documents and processes such as order management and shipping messages. The focus is on further optimizing and expanding these applications. • Integration with emerging technologies: The NPa is exploring the possibilities for integrating technologies such as blockchain and artificial intelligence to further improve the security and efficiency of the Peppol network.
