Countdown to the European e-Invoicing Standard Means Also a Spurt for PEPPOL
e-invoicing Trends, Digitalization, Industry Trends and Technology, Business Network, E-invoicing
Only 11 months to go until public sector entities in Europe will need to be able to receive e-invoices if they are sent according to the European standard on electronic invoicing. The preparations across Europe are picking up speed.
Different countries have different approaches: some (such as Finland) will simply add the support for the European e-invoicing standard (European Norm, EN) to their existing infrastructure, while others are looking into industry standards to find a way to implement the European Norm in practice. PEPPOL, the European e-invoicing and e-procurement network, provides an interesting option.
The latest news comes from Germany, where the National IT Planning Council decided to mandate the use of PEPPOL for transport of e-invoices to public authorities in Germany. At the beginning of 2018, Ireland joined OpenPEPPOL (the association responsible for managing and developing the PEPPOL network) and described it as an initial step in becoming compliant with the European e-invoicing directive.
PEPPOL Network has already implemented support for the European e-invoicing standard, which means it is possible to exchange e-invoices that are compliant with the European Norm within PEPPOL network. Thus, PEPPOL can have a significant role in the implementation of the EU directive.
Germany will be the 10th country to join PEPPOL, but I don’t expect it to be the last.
Many-to-many network ensures freedom
In terms of e-invoicing, Europe is a fragmented market. PEPPOL network was designed to overcome the current diversity and enable companies across Europe to communicate electronically with public buyers in all stages of the procurement process. In 2017, over 60 million e-invoice transactions were exchanged via the network.
As a proven and well-established many-to-many network, PEPPOL offers a possibility for European public authorities to easily comply with the new EU requirements. The biggest advantages are the readily standardized format supporting European Norm and dynamic routing and delivery of electronic invoices. These solve the most common challenges of e-invoicing: Which format to use? How to exchange the electronic messages? How to identify the business partners?
In addition, the 4-corner model gives both the buyer and the supplier the freedom to choose their service providers, which will, in turn, ensure the validated exchange of electronic messages based on the agreed standards. There are currently 176 Access Points (such as OpusCapita) in the PEPPOL network.
I don’t think PEPPOL is a single silver bullet that will solve all e-invoicing challenges in Europe. But it is a very good addition to the already existing frameworks. And for the newcomers in e-invoicing, PEPPOL is probably the best way to get started.
Next step: mandatory e-invoicing?
Are we now ready for European-wide e-invoicing with the new European e-invoicing standard and with the PEPPOL Network giving the public sector the capability to exchange them? I would say not yet. There is still one step to go.
The EU directive only mandates the capability for e-invoice receiving according to the EN standard in the public sector. It does not make e-invoicing mandatory and obligate suppliers to send only electronic invoices. It is reasonable to think that this will be next on the agenda in many European countries – and it should be. It is hard to gain widespread adoption without a small push.
Now the public sector across Europe will have to make the investment and build the readiness for receiving e-invoices. The logical next step is to demand electronic invoices from suppliers to make not only return on the investment but also to start gaining the additional benefits of more efficient invoice processing and reduced costs.
Connect to one – Connect to all
So, if you are a supplier to the public sector in Europe, I would urge you to start to get ready for PEPPOL. And if you are not, it might still be worthwhile. Even if PEPPOL has its roots in the B2G e-invoicing, it is a valid choice in cross-border B2B e-invoicing as well. There are more and more use cases arising in the B2B trade around Europe.
Getting ready is simple: ensure you have a connection to a certified PEPPOL Access Point, like OpusCapita, and we’ll take it from there. When you connect to one Access Points, you will connect to all of them - and their respective customers. PEPPOL is already a vital part of OpusCapita’s Business Network and we are also actively contributing to the future development of PEPPOL.
Ahti Allikas has been active in the e-invoicing industry since the year 2000. He currently works as Head of Partners and Networks at OpusCapita, and is responsible for the development of the e-invoicing ecosystem. Ahti is a member of the executive committee of the European E-invoicing Service Providers Association (EESPA), member of management committee of the OpenPeppol Association (PEPPOL) and also member of E-Invoicing expert group in the European Multi-Stakeholder Forum on E-Invoicing (EMSFEI).
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