What is Peppol?

Peppol is an e-delivery network, which simplifies cross-border e-procurement. It bundles components and specifications including a central directory of participants and e-procurement process standards such as electronic invoices and purchase orders. The network is regulated by the Open Peppol organization through a series of multilateral contracts.

Read on to find out all about Peppol, from the history of the network to continuous transaction control (CTC).

1. Overview
2. The history of Peppol
3. How does the Peppol network work?
4. The advantages of Peppol
5. Peppol's pillars
6. What role do Peppol authorities play?
7. Registering to the Peppol network
8. What is a Peppol ID?
9. Peppol specifications and business processes
10. How can Peppol be used worldwide?
11. The future of Peppol
12. SEEBURGER als Peppol Access Point Provider
13. Summary

1. Overview

Peppol’s motto is “Connect once, connect to all”

A simple, cross-border e-procurement network, Peppol combines a range of components and specifications such as a central user directory and standards for e-invoicing and e-ordering. Furthermore, the OpenPeppol organization governs the how Peppol is used through a multilateral network of contracts. It is important to know that Peppol is an open, cross-border network and not a platform. Once connected, those in the Peppol network can use that one connection to exchange digital procurement documents with any other user. Peppol covers not only e-invoicing, but also the entire tender and procurement process (e-procurement). Naturally, it also supports directive 2014/55/EU on electronic invoicing in public procurement.

A major factor in Peppol’s success is the interoperability of the various e-procurement systems and processes between members, as well as a simple on-boarding process for suppliers and customers. This interoperability is thanks to signed agreements on e-delivery specifications, technical specifications and transport infrastructure.

The enormous potential of Peppol and its obvious advantages have even reached Asia, Latin America and North America. However, how did Peppol begin?

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2. The history of Peppol

Peppol was developed by the OpenPeppol Association. The PEPPOL project began in 2008, financed as a pilot project by the European Commission as well as by members of the PEPPOL Consortium. Its goal was to simplify cross-border electronic procurement. To this end, all the European governments developed technical standards that could be implemented across their borders to enable direct electronic communication between companies and European government agencies for procurement purposes.

This is how the acronym ʽPEPPOLʼ, which stands for Pan-European Public Procurement On-Line, came into being. At the end of 2019, this acronym was replaced by the brand name ʽPeppolʼ, which now stands for global e-procurement. This rechristening to ʽPeppolʼ removes the limitations of ʽPan-Europeanʼ and ʽPublic Procurementʼ within the acronym, allowing Peppol to better reflect the ways in which it is actually used these days.  Of course, due to its history of e-procurement and e-invoicing with public authorities, Peppol, is still widely used in B2G circles. However, while there are currently 32 European countries that are either involved in or actively using Peppol, there are many others further afield, including Singapore, Japan, Canada, Australia, New Zealand and organizations in the USA. Further Asian countries, such as Malaysia, are waiting in the wings. Although Peppol was actually originally developed to simplify procurement in the B2G arena, these days a number of countries also - or even exclusively - use it for B2B.

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3. How does the Peppol network work?

Peppol exchanges various message types (e.g. orders, invoices) over open protocols in an e-delivery system. The following rules ensure interoperability:

• PEPPOL uses the syntax OASIS Universal Business Language (UBL) for its standards as defined by ISO/IEC 19845.
• Communication is over the Peppol eDelivery Network, a four-corner model. It also offers a directory service – somewhat like the Yellow Pages – to identify recipients, the processes they support, and their access point providers.

The parties in the Peppol network communicate over a 4-corner model. The sender and recipient stand at opposite ends of the upper edge, while the corresponding access points are the respective bottom corners. The sender sends a document, such as an electronic invoice, to a Peppol access point of his choice. From here, the network sends the document to his counterpart’s access point, where his counterpart can collect it. If his counterpart wishes to send a document in response, he sends this to his own access point, and the network forwards it to the recipient’s access point, from where it can be pulled into the recipient’s internal invoicing system.

The Peppol network assigns dynamic addresses to the receiving access points. That means that there is no static connection between access points. Instead, establishing a connection is part of the sending process. Using the receiver’s Peppol ID, a request is made to the Service Metadata Locator (SML) for the address details of the receiver’s Service Metadata Provider (SMP). The SMP responds with the formats supported by the receiver and the address of the receiving access point. If the files to be sent are in a format supported by the recipient, the process is started to send these to the receiving access point. This setup makes it possible to reach any partner in the network at any time, in keeping with the motto "Connect once, connect to all".

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4. The advantages of Peppol

All organizations registered to Peppol, whether as a supplier, a business client, a government contractor, a service provider or – in the near future – tax authorities, can enjoy the following advantages:

Better cash flow and higher turnover

• As invoices and other procurement documents arrive immediately, invoices are settled sooner, which has a positive effect on cash flow.
• The open e-delivery network can be used to reach all partners registered, not only those signed up to one or the other e-procurement platform.

Greater security and transparency

• Data is exchanged securely within the e-delivery network through the Peppol access points.
• The Peppol specifications for the business documents ensure global interoperability.
• Peppol doesn’t require you to use a variety of different e-invoice formats or partner-specific transfer protocols.

Lower costs and a faster ROI

• It is easy to onboard suppliers and clients as you don’t need to worry about bilateral e-invoicing contracts, or integrating two separate sets of systems and processes.
• Peppol is more than an e-invoicing network and can integrate any electronic procurement processes required. This higher efficiency as well as being able to transfer documents without incurring roaming charges saves costs.
• Peppol doesn’t charge either suppliers or clients those ʽmembership feesʼ often extracted from suppliers or clients for access to an e-procurement platform.

Future-orientated with organic Peppol expansion

• It would be possible to integrate further national procedures and stipulations.
• The open Peppol network is growing in participant numbers and global reach - on its own. Once connected to the network, a supplier’s or client’s potential reach automatically keeps growing – internationally.
• We are working on further increasing Peppol’s global coverage by developing an international Peppol standard – PINT – to connect Europe and Asia, as well as connecting tax authorities continuous transaction controls (CTCs) in a Peppol 5-corner model.

What are the main advantages of Peppol for suppliers and customers?

Advantages for suppliers

From a supplier’s perspective, Peppol’s advantages can be summarized as follows:

• Peppol can automatically create, process and exchange documents for an incoming order, such as an order confirmation, a shipping notification and an invoice.
• Peppol eliminates time-intensive, error-prone manual processes such as entering data into a larger client’s online EDI portal.
• You can use the same Peppol Access Point to easily set up connections to partners joining Peppol at a later date. This saves times and money.

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The first two pillars, the business documentation, define the general terms of cooperation and responsibilities for all parties. These terms are coordinated by the not-for-profit OpenPeppol, with the various Peppol Authorities also playing an important role. The Peppol Authorities may stipulate additional regulations for their domain/country. These may involve employing country-specific specifications or using specific forms of ID. Core governance documents are the Internal Regulations for Use of the Peppol Network, Service Provider Agreements (formerly TIA), which are concluded between a Service Provider (PA) and a Peppol Authority (PA), and Peppol Authority Agreements, which are drawn up between a PA and Open Peppol. These are supplemented by other guides, including the document Operational Procedures.

The second pillar,the Peppol eDelivery Network, sets out the technical specifications and resources required for access to the Peppol eDelivery network and for implementing its various components. The network uses a shared format, as well as a common digital signature technology to secure message content. This ensures a secure, interoperable network which connects all its access-point providers.

The third pillar, the Peppol Business Interoperability Specifications, ʽBIS’, standardizes electronic documents. These standards enable secure, open data exchange, whether between purchasers in the public sector and their European suppliers, or purchasers and suppliers in other sectors or further afield. These e-procurement specifications (Peppol BIS), updated by OpenPeppol, build on the work of the CEN Workshop on Business Interoperability Interfaces for Public Procurement in Europe (CEN BII). However, alongside the specifications published by OpenPeppol, parties can also use country-specific specifications. For example, UBL syntax is not the only supported document type. Parties are perfectly able to use other syntaxes, such as the Cross Industry Invoice (CII) syntax used in Germany’s XRechnung.

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6. What role do Peppol authorities play?

The national Peppol Authorities work with the Brussels-based OpenPeppol AISBL Coordinating Authority and form the national links of the network. They liaise with the Access Point (AP) providers and the Service Metadata Providers (SMP) in their region. Their responsibilities include:

• Keeping contractual documents up-to-date - including the Peppol Authority Specific Requirements (PASR) for their area – and closing contracts with service providers.
• As well as ensuring that members meet their contractual obligations, the national Peppol authorities also support their members with their queries.
• A Peppol authority advocates for their country’s interests in the Peppol network.

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7. Registering to the Peppol network

A frequently asked question is how end users (those in corners 1 and 4) can register to Peppol. As it happens, end users don’t necessarily need to register, unless they need to receive documents over the network. No registration is necessary for sending documents.

Registering to receive data over the Peppol network involves entering your recipient details into your service provider’s Service Metadata Publisher (SMP). This is done either by the service provider or through a dedicated user interface for updating details.

As well as your Peppol ID, this includes your process and document IDs, essentially, the processes and document types you use. These IDs have been defined by Peppol and can be found here at https://docs.peppol.eu/edelivery/codelists/ in the Document Types list.

SEEBURGER is both an Access Point service provider as well as an SMP. Users can update their details held by the SMP through a dedicated user interface.

Details on each recipient (such as Peppol ID, processes and documents supported) can be published as a business card in the Peppol Directory, to be viewed by the other participants. This directory can be found at https://directory.peppol.eu/public.

However, what exactly is a Peppol ID? How is it put together and what does it do in the Peppol network?

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8. What is a Peppol ID?

A Peppol ID plays a central role in helping you find the correct partner in the Peppol network. It is a unique reference number for each participant, used both at a technical level and in business documents. How this identifier is put together has been defined in the Peppol eDelivery Network Specifications.

The reference number consists of a pre-existing identifier, such as a VAT code, or another country-specific code such as the Organisasjonsnummer in Norway. Therefore, users don’t need to apply for a specific Peppol ID. In some countries, however, the national Peppol Authority has country-specific requirements for its end-users. These are set out in the PASR.

The ID formats currently in use can be found at https://docs.peppol.eu/edelivery/codelists/ under ʽParticipant Identifier Schemeʼ. For Germany, one component of the identifier may be the participant’s VAT code. Therefore, an example Peppol ID could be 9930:DE1743082945.

What is the relationship between a Peppol ID, a Leitweg-ID, a VAT code and a GLN (Global Location Number)?

A Leitweg-ID is German reference number following a specific format that was developed as part of XRechnung. It is used in business transactions with the German public sector such as federal government, federal states, municipalities and local authorities. The Leitweg-ID is recognized by Peppol as a valid component of its Participant Identifier for use in the Peppol network. For corporate German entities, Peppol recognizes a VAT code, a GLN, or in the absence of both, an IBAN.  Contractors from the private sector can therefore use their VAT ID as their unique Peppol Participant Identifier to enable them to send or receive documents. Contractors from the public sector use their Leitweg-ID.  

A Leitweg-ID, GLN or VAT code is turned into a Peppol ID by adding a 4-number prefix.

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9. Peppol specifications and business processes

The Peppol network supports so much more than sending and receiving invoices. You can use it for the electronic procurement (e-procurement) process. The Peppol BIS specifications are designed to support the entire supplier exchange chain, from catalogue to order to invoice (post award).

In addition, the network's uniform format specifications already support an electronic tendering processes (e-tendering).

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10. How can Peppol be used worldwide? ^[1]

International Invoicing

Following the results of the working group on international e-invoicing, OpenPeppol has moved even closer to launching international invoicing. This is expected to give a boost to the standard-based interoperability of business processes across the globe. This is a complex project requiring OpenPeppol to devote extensive technical and business resources to its success.

Continuous Transaction Control (CTC)

A new trend in digitalization is awakening the interest of every tax authority around the globe. It is a trend that affects electronic invoicing, but is not confined to this area. We are talking about automated transaction systems, which can generate data needed by a government to collect tax and for purposes of corporate efficiency. Peppol is considered to be one of the solutions in this area, indeed, the solution that optimally combines business efficiency in the economy with tax reporting and/or accounting models. CTC could be an excellent avenue for Peppol to approach governments from another direction. Equally, it could be pose a threat if developments in the market end up bypassing Peppol.

11. The future of Peppol

In 2023, all public authority contractors must support Peppol

In the summer of 2022, the IT Planning Council in Germany decided that, from 1 October 2023, all public clients are to be connected to the Peppol network as soon as they offer “machine-to-machine” processing.

The IT Planning Council in Germany is a steering committee comprized of federal and state governments. It coordinates IT cooperation and e-government projects within the framework of the national e-government strategy. It also defines matters such as IT interoperability and security standards.

This decision means that once all the federal states and municipalities are connected up, they will all have a standardized input channel for their contractors, both domestic and abroad.

The Peppol 5-Corner Model – “Peppol goes CTC!”

In order to enable CTCs in the Peppol network, we first need to integrate the various domestic tax authorities into the data exchange - at least for the tax relevant content. The preferred approach at present is an outsourced clearance process.

The Peppol service providers act on behalf of the local tax administrations and send batches of tax-relevant Peppol BIS documents to the domestic tax authorities.

The outsourced clearance process explained

The central tax platform – the fifth corner – is the governmental data analysis vault. This captures tax-pertinent details from invoices AND other documents such as orders, shipping confirmations, delivery notes and payment instructions.

There is currently a feasibility study in progress on whether pre-existing clearing and reporting models can also be offered as a further option.

The Peppol CTC model is a decentralised CTC model with regulated document exchange. The principles behind this model are:

• flexible and configurable to actual needs
• efficient, harmonising channels
• based on known, pre-existing technologies
• impacts trade and the supply chain

Peppol CTC is a hybrid model that combines best practice elements from previous CTC models. This is how it works:

• The service providers in corners 2 and 3 (C2 & C3) need to be CTC certified by their respective tax administrations (TA).
• C2 verifies documents according to local requirements and sends these in real-time to the tax authority's service provider in corner 5 (C5). Depending on the tax administration’s specific rules, this may be a full business document or a defined tax-relevant subset.
• C2 sends the checked document in real-time to C3.
• C3 receives the business document and sends a tax declaration document, as per its TA’s specific rules, to C5.
• The process between C2 and C3, acting on behalf of the seller (C1) and buyer (C4), is regulated by the Peppol network. This means the TA can be assured that documents are exchanged between C1 and C4 in a secure, rule-based manner.
• The exchange of business documents between C1 and C4 as well as selecting and sending data to C5 is in real-time.

The Peppol CTC model allows a great deal of flexibility in adapting to country-specific requirements. These may be the tax-relevant business documents (invoices, purchase orders, etc), the reporting format, or security and certification requirements such as CTC certification, eSignature, an SLA or other data security measures.

Integrating the tax authorities into the invoicing processes in the Peppol network is an important step in empowering Peppol for the growing CTC trend. However, we don’t only have our eye on CTCs. We want to harmonize the Asia-Pacific and European semantic data models to create an international data model, the Peppol International Invoicing Model (PINT).

PINT – cheers!

In order to improve interoperability between international partners in the network, at the end of 2019, there was a project to define an international invoice model. The aim was to enable an international exchange of electronic invoices with public authorities all over the world while also ensuring that specific local stipulations on e-invoicing are supported.

The main task in creating an international model consisted of developing a common core to increase interoperability while, where possible, supporting country-specific stipulations.

Source: 25.03.2020-Cross-Community-Webinar-Presentations.pdf (peppol.eu), P. 16
 

The result is the semantic data model ʽPeppol International Invoicing Model (PINT)ʼ, with common semantic definitions for users of the model.  

The design principle behind PINT was based as closely as possible on the established ʽPeppol BIS Billing 3.0ʼ, and therefore also on directive EN16931. Wherever necessary, PINT extends the semantic definitions of the business terms in the data model, or adds further business conditions to enable requirements not foreseen by the core European invoice model and EN 16931. As PINT is an extension to Peppol BIS-Billing 3.0, BIS-Billing 3.0 is compatible with PINT. Specifications for electronic invoices in other countries and regions also need to be compatible with PINT.

In 2022, Japan joined as a further member from the Asia-Pacific region. It is the first country to begin with a specification based on PINT.

Source: Peppol International Invoice model review - PINT - Peppol International Invoicing Work Group - Confluence (atlassian.net), P. 4

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12. SEEBURGER as Peppol Access Point Provider

In 2019, SEEBURGER was certified as one of the first German Peppol Access Point Certified Providers by the OpenPeppol AISBL. SEEBURGER is a certified Peppol Access Point Provider for AS2 and AS4. On 13 September 2022, SEEBURGER was certified as one of the first Peppol Access Point Providers in Japan.

SEEBURGER offers a variety of protocols through which customers can connect to Peppol, including AS2, HTTPS, OFTP, SLMP and SFTP. You can find the technical connection data for the SEEBURGER Cloud in our data sheets and certificates.

13. Summary

Together, Peppol and PINT will form the largest common denominator for global e-invoicing for B2B and B2G transactions in the future. The networks assist in meeting the regulatory requirements for international e-billing in a growing number of countries around the world. In the light of increasing number of countries introducing clearing models, the Peppol 5-corner model (5C) would be best-placed to streamline these processes and make life easier for the end users.

Combined with its ability to support a full e-procurement and e-tendering process, Peppol is one of the most forward-looking solutions on the market for international e-invoicing.

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OpenPeppol Cross-Community Plenary session 20.10.2020
Folie 23 ff., Peppol Continuous Transaction Control (CTC) project presented by Paul Killie

OpenPeppol Cross-Community online plenary 25.03.2020
Topic 4, The CTC project presented by Paul Killie, Folie 4

12th OpenPeppol General Assembly 16.06.2020
Agenda item 4.a, Plans for 2020 – General Direction, Folie 58, Continuous Transaction Controls (CTC)