Introduction
In this article, we explore the world of electronic document standards, with a particular focus on those standards that facilitate automatic processing, such as e-invoicing.
PDF and Electronic Documents
The fundamental difference between a PDF and an electronic financial document lies in the processability of the information. A PDF serves as a digital paper document that is visually consistent across different platforms, but the content is not directly processable by financial software. Electronic financial documents, on the other hand, such as e-invoices in XML format, contain structured data that can be automatically read, interpreted, and processed by computer systems, enabling efficient, accurate, and automated exchange of financial information between different parties.
With a Scan Recognize as a Service solution, the disadvantage of PDF documents can be largely mitigated, but ultimately the quality and reliability of an XML document remain superior.
Electronic Exchange
E-invoicing encompasses not only document standards but also the process of electronically sending and receiving invoices, allowing the document to be automatically processed by accounting systems. Combined with an XML message standard, this process reduces the need for manual entry, lowers the chance of errors, speeds up payment cycles, and contributes to sustainability by reducing paper usage.
Semantic Standards: The Basis of Data Exchange
Semantic standards define the meaning of data within a document. In the context of e-invoicing, these standards specify the substantive meanings of fields in an invoice—such as what information an invoice should contain and how this information should be interpreted—to ensure uniform understanding and processing across different systems.
By attributing the same meaning to data elements, both senders and receivers can uniformly interpret the information, regardless of the systems or technologies used. These standards are essential for achieving large-scale interoperability and automation, leading to improved accuracy, lower processing costs, and shorter payment cycles.
European Standard EN16931
The European Standard EN16931 plays a crucial role in harmonizing e-invoicing practices within the European Union. This standard defines a 'core' invoice model that lays the foundation for the semantic data to be included in an e-invoice. The model focuses on establishing a common understanding and format for the most essential information that must be present in every invoice, such as supplier data, buyer data, invoice details, and the description and prices of delivered goods or services.
The European Standard is incorporated into legislation and ensures that—especially—governments must conform to this standard in future developments.
PINT: Global Semantic Messaging Standard
PINT was developed as a semantic standard specifically aimed at simplifying cross-border e-invoicing, thus extending beyond Europe. PINT is designed to support global e-invoicing, where the core of the invoice is even smaller than in the European Model.
The Semantic Messaging Standard of eConnect
A practical implementation of a semantic model can be found at eConnect, where one overarching semantic model was built based on the PINT and the European standard. This allows invoices to be read in a user-friendly manner, regardless of the underlying message types. This reduces complexity and ensures interoperability.
Benefits of Semantic Standards
Uniformity: A standardized semantic standard helps reduce the complexity and diversity of invoice formats.
Interoperability: It facilitates cross-border trade by ensuring compatibility between different e-invoicing systems.
Compliance: It helps companies comply with regulations, as the use of a standardized model is recognized and often required by government agencies within the EU.
Efficiency Improvement: It helps streamline invoicing processes within the public sector, leading to faster processing times and improved efficiency.
What is a Core Invoice Usage Specification (CIUS)?
A Core Invoice Usage Specification (CIUS) is a specific implementation that provides detailed instructions and adjustments for using, for example, the European Standard EN16931 for e-invoicing. The CIUS defines how the basic elements of a semantic standard should be used or restricted to meet specific business, sectoral, regional, or national requirements. The goal of a CIUS is to increase interoperability while ensuring flexibility in the application of the standard, allowing it to meet diverse needs and regulatory requirements.
An example of this is the NLCIUS for the application of the European Standard EN16931 in the Netherlands. The BISv3 of Peppol is also a CIUS for the use of the European Standard within Peppol.
The Use of CIUSs and Extensions for Specific Implementations
A CIUS or extension allows organizations to adapt and specify the general e-invoicing standards for their specific context. This may be necessary for:
Industry-Specific Requirements: Different sectors may have unique invoicing requirements that are not fully covered by the basic set of semantic standards.
Regional or National Legislation: Laws and regulations regarding invoicing can vary significantly by country or region, necessitating adjustments to meet these specific requirements.
Specific Business Processes: Companies may have unique operational processes that require specific data elements or structures in their e-invoicing practices.
A CIUS makes a semantic standard more specific, thus stricter. Typically, optional fields or specific values are required in certain situations where this is important in that application. For example, in the Netherlands, a Chamber of Commerce number or OIN number may be mandatory as an identifier for an organization, while this may not apply outside the Netherlands.
It is important to be cautious when using CIUSs, as complexity increases and interoperability decreases. Additionally, a CIUS incurs costs for maintenance and market implementation.
A good application of an extension is to add optional data to a document. By not making data mandatory, one can choose to implement the benefits of its use. For example, the meter readings included in the SEEF (energy extension). If you do not use these meter readings, it is not a problem, and the invoice can still be processed.
What is Syntax?
While semantic standards determine the "what" of the data, syntax focuses on the "how"—the way data is structured and formatted for electronic exchange. Syntaxes such as XML (eXtensible Markup Language) or JSON (JavaScript Object Notation) provide a framework for encoding documents so that they can be read and processed by computer systems.
In the context of e-invoicing, UBL (Universal Business Language) and UN/CEFACT are two prominent examples of syntaxes used to facilitate the exchange of electronic documents, including invoices. Each of these syntaxes offers a framework for encoding information so that it can be read and processed by computer systems, ensuring interoperability between different technologies and platforms.
Both syntaxes can be used to create a BISv3 or NLCIUS invoice.
UBL (Universal Business Language)
UBL was developed by the organization OASIS (Organization for the Advancement of Structured Information Standards) and is specifically designed to standardize the electronic exchange of business documents, such as invoices, orders, and shipping notices. UBL uses XML (eXtensible Markup Language) to define a standard set of business documents:
Flexibility and Extensibility: UBL is designed to be easily adapted and extended to meet specific business needs and processes without losing overall compatibility.
International Adoption: It is widely used in international trade and by government agencies, partly due to its broad support and adoption within the PEPPOL network for cross-border transactions.
UN/CEFACT
UN/CEFACT, developed by the United Nations Economic Commission for Europe, aims to improve the ability to conduct electronic trade and contributes to the development of standards for electronic data exchange. UN/CEFACT uses multiple formats, including XML, but is also known for its work in defining EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport), an older but still widely used format for electronic data exchange:
Wide Range of Applications: UN/CEFACT focuses not only on invoicing but offers a comprehensive framework for various aspects of electronic commerce and data exchange.
Focus on International Trade: UN/CEFACT's standards and recommendations are designed to enhance the efficiency and interoperability of international trade processes.
Syntax Mapping and Validation Artifacts
In the world of e-invoicing, "syntax mapping" and "validation artifacts" are crucial components that ensure smooth, accurate data exchange between different systems and standards. Below, we explore what these terms mean and why they are important.
Syntax Mapping
This is where semantics and syntax come together. Syntax mapping links elements of a semantic standard (the meaning and content of the information) to a specific syntax (the format and coding of the information) such as UBL or UN/CEFACT. This process is essential when the same semantic information needs to be expressed in different technical formats, depending on the requirements of the receiving system or the network used.
Validation Artifacts
Validation artifacts are tools or files used to verify whether an electronic document (such as an e-invoice) complies with a particular standard or set of rules. These can include schemas (XSD), business logic rules (Schematron), or other specifications used to validate the structure, content, and consistency of the data.
Ideally, validation rules are defined in the semantic standard so that they can be applied to different syntaxes. This means that the validation rule of the NLCIUS is substantively the same between a UBL and a UN/CEFACT, but the fields in the XML and the formulas for this validation are different.
Conclusion: Integrated Approach to E-Invoicing
The digital transformation of financial processes, particularly e-invoicing, requires a structured and integrated approach. The implementation and success of e-invoicing depend on a deep understanding and effective use of semantic standards, syntax mapping, and validation artifacts. These three elements together form the backbone of an efficient, reliable, and interoperable e-invoicing system.
Semantic standards provide a common language and understanding, essential for correctly interpreting invoice data between different parties and systems. Syntax mapping allows these universal concepts to be translated into different technical formats, facilitating data exchange between various accounting systems and business software. Validation artifacts, finally, ensure the integrity and compliance of e-invoices with established standards and specifications, crucial for automatic processing and compliance.
The integrated application of these components significantly contributes to the success of e-invoicing by: Increasing efficiency and automation, making the invoicing process faster and less error-prone. Promoting interoperability between different systems and organizations, essential for international trade and electronic government procurement. Ensuring compliance with regional and international regulations, contributing to smooth business operations and avoiding legal complications.
References
To compile this article and gain a deeper understanding of the subject, the following sources and literature are recommended:
European Commission - E-invoicing: Provides extensive guidelines and resources on e-invoicing within the EU, including the EN16931 standard.
PEPPOL: For documentation and implementation guides related to the PEPPOL network and BIS specifications.
OASIS UBL and UN/CEFACT: For technical specifications and documentation on these widely used syntaxes.
W3C XML Schema (XSD): For insights into the basics of XML validation schemas.
