PEPPOL (Pan European Public Procurement On-Line) has been gaining ground as the standard framework for electronic document exchange (primarily e-invoicing) for the public sector across Europe and beyond.
As a widely-supported framework, PEPPOL complies with the requirements of the European standard for e-invoicing (EN-16931-1:2017), as well as the requirements imposed by Directive 2014/55/EU, which amends the European Union e-procurement regulatory environment. Any business looking to do business with public administration entities in Europe would be wise to consider PEPPOL as the go-to standard for maximum compatibility and compliance.
Following the impact of the coronavirus pandemic in 2020, businesses are sending higher percentages of their invoices electronically to avoid the limitations of print and post, when staff and customers may not be in the office as much. PEPPOL stands out as a proven framework for public sector businesses looking to move to electronic invoicing.
What is PEPPOL?
PEPPOL is a framework that sends documents electronically. The documents are sent as XML, using the UBL standard. Because documents are of a machine-readable standard (XML), many businesses refer to this as an electronic data interchange or EDI process, even though there are no EDI standards involved.
PEPPOL was designed to simplify both order-to-cash and purchase-to-pay processes between government bodies and suppliers. Put simply, PEPPOL facilitates electronic ordering, invoicing, and shipping between government organizations and private companies.
PEPPOL isn’t an e-procurement or e-invoicing system. PEPPOL is a set of open technical specifications that facilitate interoperability and trading between connected parties. Connection to the PEPPOL network is via a PEPPOL access point, typically a service provided by an e-invoicing or e-procurement solution provider.
The interoperability afforded by the common PEPPOL standard means that businesses and government organizations, using entirely different procurement, invoicing, and shipping systems (or service providers) will be able to connect seamlessly. Where procurement, invoicing, or shipping solutions are delivered by a service provider, they are prohibited from charging extra fees for the PEPPOL connection as part of that service.
You can find out more about getting started with PEPPOL in our guide to this topic.
Why is PEPPOL so widely adopted?
PEPPOL, as a framework, provides structure to any electronic invoicing efforts − from network requirements to document standards, as well as other aspects like transactional history (simplifying audits and recall processes). Traditional procurement processes, between government bodies and suppliers, have limited capacity for automation. PEPPOL is designed to remove these barriers to process automation, vastly improving efficiency, and bringing benefits such as Just-in-Time ordering.
With a large number of European countries already utilizing the PEPPOL framework, and contributing to its evolution, there is considerable evidence for its applicability and benefits in use.
The adoption of PEPPOL as a standard framework has spread beyond Europe in recent years, with Singapore, Australia and New Zealand adopting PEPPOL frameworks in the last couple of years. The US and Canada are also in the process of adopting PEPPOL for some aspects of their public sector procurement.
PEPPOL is unlikely to cross over into South and Central American countries, because they already have well-established solutions that are widely used. Therefore, there is no need for a framework, like PEPPOL, to help standardize and ease the transition over to electronic invoicing.
What are CIUS and XRechnung?
The CIUS (Core Invoice Usage Specification), as an aspect of the European Norm EN 16931-1:2017 for electronic invoicing within that region, outlines specifications pertaining to the business rules that each country must abide by when using the PEPPOL framework. Furthermore, the CIUS includes operational guidance with examples of how these business rules need to be enacted.
The CIUS provides a mechanism to trigger certain rules based on the country of the supplier. The goal is to automatically apply national regulations, restrict data formats, or impose data restrictions to support national business practices.
One example of the CIUS for the European Norm EN 16931-1:2017 e-invoicing standard is the German XRechnung format, which, as of November 27, 2020, will be required by the German federal administration (Bund). Any businesses wanting to do business with Federal Government entities in Germany will need to send invoices in the XRechnung or other EU-compatible formats (e.g. Zugferd could be used).
XRechnung does have some regional variances across Germany, but delivering invoices in this format via a PEPPOL access point presents a greater degree of standardization than manually connecting to the centralized ZRE service via email or web form.
How can a business meet PEPPOL requirements quickly and easily?
Delivering electronic invoices compatible with PEPPOL requirements may seem daunting at first, but the reality can be quite straightforward. Using an outsourced e-invoicing service provider such as Corcentric provides maximum flexibility on the delivery format, and facilitates PEPPOL requirements, such as XRechnung format e-invoices.
At Corcentric, we work with a variety of PEPPOL access points to ensure maximum flexibility. Clients that want to work with a specific access point will find that Corcentric makes it as easy as possible.
Talk to us today about your PEPPOL requirements. We’ll identify the most efficient way to get you connected quickly. Or feel free to explore the topic of PEPPOL in more detail in our Getting Started with PEPPOL Guide.