With the rising use of digital technologies in all aspects of work, e-invoicing appears to be the norm. Surprisingly, this is not the situation in many progressive countries.
Across continents, e-invoicing adoption is uneven, and many firms continue to send and receive invoices as PDFs via email or even as paper invoices by mail. With global procurement on the rise, this should not be the case.
Fortunately, Peppol intends to address the easy domestic and international transfer of electronic business documents with common standards for transport protocol and business document library formats that enable cross-border interoperability for both public and private sector businesses. Continue reading to learn how Peppol works and how it might help your business.
Definition of Peppol
Peppol is a framework that enables electronic invoicing in various European nations. An invoice is a secret document that requires technological competence to exchange digitally.
Peppol develops technological requirements for e-invoicing and collaborates with e-procurement platforms and tax authorities.
For example, suppose an organization transmits an e-invoice to the tax authority via the e-procurement system; Peppol will intercept it and verify that the peppol e-invoice format and information conform to the standard specifications.
Following the verification process, Peppol will either reject or forward the e-invoice to the tax authority.
Billing process with Peppol
PEPPOL is an acronym that stands for Pan-European Public Procurement On-Line. It is a secure network over which files, such as an e-invoice in UBL format, must be sent using a specific EDI protocol (AS2 or AS4).
PEPPOL was developed in collaboration with the European Commission and 18 government agencies to streamline the purchase-to-pay process between government entities and providers.
There are various advantages to sending UBL invoices using PEPPOL. It is a secure network that certified access points can only access. The closed network ensures that sensitive financial data is shared securely between businesses and government organizations.
Furthermore, using the UBL format assures that all software interprets the documents you send over the network similarly. This allows for the automation of a substantial portion of the billing process.
Because you no longer have to type payment details manually, an automated invoice approval system saves time and decreases the possibility of billing errors. Hence Automated invoice approval system.
How to Implement Peppol E-invoicing in Your Business?
Peppol is not a document exchange platform but a network that connects the many current platforms utilized by enterprises and government agencies. It is an IT architecture that allows you to connect to and deliver messages to other computers on the network.
Develop a business case for invoicing
This information is based on the assumption that your company has expertise with or access to project and process change management capabilities. It anticipates that you will receive advice on the operational aspects of your invoicing project via these channels.
Consider the costs and benefits of each implementation option while creating your business case. Consider your company’s existing invoice management processes to see how Peppol invoicing might help you.
Determine and prioritize the scope of your invoicing implementation, such as:
- Concentrate solely on sending invoices, receiving invoices, or both.
- Consider whether your trading partners utilize other documents, such as purchase orders.
Knowing this information will assist you in developing the value case for implementing invoicing. It will assist you in prioritizing efforts and expenses for other business priorities.
Scope and implementation approach
Depending on the present status of your invoice administration, the work necessary to implement invoicing may vary. You may already have software, systems, and processes that require slight modification to join the Peppol network.
Alternatively, you may need to rethink your company processes and invest in new systems or tools to improve efficiency.
You can choose to implement invoicing at your speed or that of your business partners. Some organizations prefer to deploy in stages, beginning with a few suppliers or customers with simple invoicing requirements and then phasing in trading partners with more sophisticated requirements.
For others, Peppol e-invoicing is another channel for sending and receiving invoices with extra benefits and the chance to optimize their electronic channels, such as transitioning webworms to Peppol.
- Key considerations
Determine your company’s current technical infrastructure and software system capability for invoicing. Determine whether any gaps must be filled for your company to become invoicing-enabled.
- Business requirements
Consider the following requirements for your company when evaluating potential software solutions:
- Sending and receiving electronic invoices
- Invoice processing techniques and workflows include matching or verification, approving and paying, Storage, and archiving.
- Disaster recovery business continuity reporting
- Reporting
- Affected systems
Once you’ve determined your preferred eInvoicing solution and way of connecting to the Peppol network, you’ll need to identify all systems and processes that will interface with your e-invoicing software provider to assess the impact of the change.
Trading partner readiness
It is critical to understand your trading partners’ eInvoicing capabilities. Invoice processes that need manual data entry by your business partners are more expensive.
This is due to inefficiencies caused by the manual intervention to correct errors and anomalies. Peppol could be an option. Peppol integration technology transforms customer invoices and sends them to recipients.
Engage your suppliers and buyers early in the conversation, and manage this interaction through your relevant account managers.
Consider your high-volume partners or partners who are likely to have strong ICT capabilities while testing your selected solution.
Develop a strategy for communicating with current and prospective trading partners as part of your preparation. Make it plain to them that your company supports, encourages, and prefers Peppol e-Invoicing, and both parties will benefit.
Become invoice-enabled
When a company can send and receive invoices via the Peppol network, it is eInvoice-enabled. When you enable eInvoices, your service provider will add you to the Peppol Directory.
You can search the Peppol Directory for other businesses that have signed up to receive invoices. There is no sender registration because only receivers are included in the directory.
Businesses can activate eInvoicing by selecting one of the following options:
- Choose a peppol access point
- Choose a third-party peppol access point.
- Connect using the software you already have.
Business Change Considerations
The adoption of eInvoicing may impact your company’s people, systems, and procedures, as well as your trading partners.
The degree of impact will be determined by the solution chosen by your company and the amount of change that occurs due to shifting from your current invoice management processes to the new ones.
Managing the effects of change is critical to the effective implementation of eInvoicing in your business:
- Determine all key stakeholders (internal and external).
- Consider how these stakeholders may be impacted.
- Determine the impact and change management requirements.
- Determine the steps needed to manage the effects of any changes.
