What is Peppol?

Peppol is a cross-border network for e-procurement. Its goal is to provide a faster, completely digital public authorities’ tender and procurement process using open standards at low cost.

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 Four Pillars
  6. What role do Peppol authorities play?
  7. Registering to the Peppol network
  8. What is a Peppol ID?
  9. How can Peppol be used worldwide?
  10. The future of Peppol
  11. SEEBURGER als Peppol Access Point Provider
  12. 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 organisation 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. 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 30 European countries that are either involved in or actively using Peppol, there are many others further afield, including Singapore, Canada, Australia, New Zealand and 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?

In Peppol, different message types (e.g. orders, invoices) are exchanged over open protocols. The following rules ensure interoperability:

Essentially, the parties in the Peppol network communicate over a 4-corner model. The sender and recipient stand at opposite ends of the outer edge, while the corresponding access points are the two inner corners. The sender sends a document, such as an electronic invoice, to his Peppol access point. 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. 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 formats supported by the recipient, the process is started to send these to the receiving access point.

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4. The advantages of Peppol

All organisations 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 cashflow and higher turnover

  • As invoices and other procurement documents are delivered immediately, invoices are settled sooner, which has a positive effect on cashflow.
  • 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 summarised 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.

Advantages for customers

Clients are most enthusiastic about the following advantages:

  • Higher efficiency in their daily business through automated data exchange with their partners‘ networks.
  • The opportunity to benefit from a competitive network that enables low-cost procurement.
  • Higher data transparency and better traceability.

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5. Peppol’s Four Pillars

Peppol is based on four main pillars. These are:

  1. TIA (Peppol Transport Infrastructure Agreements) provide the legal framework for the network administration
  2. The network (Peppol eDelivery Network)
  3. Technical specifications for inter-operability (Peppol eDelivery Network Specifications)
  4. Semanticspecifications for interoperability (Peppol Business Interoperability Specifications ‘BIS’)

The first pillar, the Peppol Transport Infrastructure Agreements – TIA,defines the general terms of cooperation and defines responsibilities for all parties.  The TIAs are coordinated by the not-for-profit OpenPEPPOL AISBL, with the various Peppol Authorities also playing an important role.

The second pillar, the Peppol eDelivery Network, establishes common business processes and technical standards. The network uses a shared format, as well as a common digital signature technology to secure message content. This ensures a secure, interaoperable network of access-point providers.

The third pillar, thePeppol eDelivery Network Specifications sets the technical specifications and resources required for access to the Peppol eDelivery network and to implement its various components.

The fourth pillar, the Peppol Business Interoperability Specifications, ʽBIS’,standardises 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, updated by OpenPEPPOL, build on the work of the CEN Workshop on Business Interoperability Interfaces for Public Procurement in Europe (CEN BII).

 

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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 liase with the Access Point (AP) providers and the Service Metadata Providers (SMP) in their region. Their responsibilities include:

  • Keeping contractual documents up-to-date (in particular, Peppol members‘ TIAs if there are changes in the network), closing contracts with service providers and keeping the national Annex 5 up-to-date. Annex 5 to a TIA contains any specific stipulations or provisions made for a country. The Peppol Authority responsible for Germany in the Peppol network is KoSIT  (die Koordinierungsstelle für IT-Standards) and the German TIA can be downloaded from their website.
  • 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

Users wishing to receive documents need to register to the Peppol network. However, 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 thr Organisasjonsnummer in Norway. Therefore, you don’t need to specifically apply for a Peppol ID.

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.

 

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 recognised by Peppol as a valid component of its Participant Identifier for use in its transport network. For corporate German entities, Peppol recognises a VAT code or a GLN.  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.

  

PrefixSchemePeppol Participant-ID
0204Leitweg-ID0204:Leitweg-ID
9930VAT number9930:VAT number
0088Global Location Number0088:Global Location Number

Your Peppol ID is your invoicing address:

Government agencies use their Leitweg-ID e.g. 9958: 05 7 11 333 – 12345 12345 - 57

Corporate entities use their VAT ID, e.g. 9930: 12346789

9. How can Peppol be used worldwide?

International Invoicing

In 2020, OpenPeppol moved even closer to launching international invoicing[1]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 digitalisation 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.

CTC models

CTC = Continuous Transaction Controls*

Interoperability

Fully digital exchange of any transaction documents via interop:
- Australia
- Finland
- Singapore
- Switzerland
   

Variations: (1) domestic framework and (2) Peppol framework
   

B2G e-Invoicing

Transactions in public procurement exchanged with a predefined infrastructure:
- EU Member States
- Singapore
   
   

Variations: single infrastructure (1) with Peppol and (2) without Peppol

Real-time Reporting

Submission of transactional data in near-time after issuance:
- Hungary
- South Korea
- Taiwan
- Greece (possibly)

Variations: (1) supplier only and (2) both supplier and buyer
   

Clearance

Approval of transactions pre-issuance and validation post-receipt:
- Chile
- Mexico
- Turkey
- Italy
   

Variations: (1) hard / soft clearance & (2) outsourced / inhouse clearance

Figure 5: Continuous Transaction Controls CTC

In 2020, OpenPeppol entered the proof of concept (PoC) phase of the CTC feasibility study.

The PoC

  • Is discovering what stipulations the tax authorities have on businesses,
  • Is developing a variant of the Peppol architectural framework  
  • to support CTCs and implement the tax requirements.
  • to test this environment being used by the participants, supported by technical resources from the operations office.

The results of the CTC PoC project will be vital for determining OpenPeppol’s business strategy in this area in 2021.

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10. The future of Peppol

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 Peppol 5-Corner Model

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.

  • Advantages for governments

  • Realtime tax liability checks
  • A powerful, well-maintained system
  • Actions against accredited external parties
  • No specialised support required for small and medium-sized organisations
  • Scaled to other types of business document
  • For national and international transactions
  • Advantages for taxpayers
    (suppliers and customers)

  • Flexibility in choice of Peppol service provider
  • Flexibility in the formats and communication protocols they prefer to work with.  
  • The taxpayer no longer needs to make a further connection to the tax authorities to declare tax-pertinent information from their business documents.   
  • All the advantages of an end-to-end process
  • Automation with rich content– a side effect of the actual business process
  • Service providers who honour their service level agreements

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 harmonise the Asian 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, in 2018 we started a project with the goal of defining an international invoice model.  The aim is 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 specific stipulations.

The Peppol international invoice framework – concept

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. 

11. SEEBURGER as Peppol Access Point Provider

SEEBURGER was certified as one of the first German Peppol Access Point Certified Providers in 2019 by the OpenPEPPOL AISBL. SEEBURGER is a certified Peppol Access Point Provider for AS2 and AS4.

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.

12. 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.  The Peppol 5-corner model (5C), currently under review, may be piloted in France with the B2B Clearance e-invoicing directive coming in 2023. Peppol is therefore one of the most forward-looking solutions on the market for international e-invoicing.

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Do you have any questions?

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Sources:

OpenPeppol Cross- Community Plenary session

peppol.eu › wp-content › uploads › 2020/10 › 2020.10...

 

PDF

Oct 20, 2020 — Peppol Continuous Transaction Control project – CTC (Paul Killie) d. ... architecture and specifications for a Peppol CTC model and run a PoC.
 

OpenPeppol Cross- Community online plenary

peppol.eu › wp-content › uploads › 2020/03 › 25.03.2...

 

PDF

Mar 25, 2020 — 4. The Peppol Continuous Transaction Control (CTC) project ... Conduct a Proof of Concept (PoC) testing on one (or more) scenarios
 

2020.06.16 GA12 slides_presented - Peppol

peppol.eu › wp-content › uploads › 2020/06 › 2020.06...

 

PDF

Jun 16, 2020 — For 2020. OpenPeppol will execute a CTC Proof of Concept (PoC) project which will extract the business requirements of Tax Authorities, develop ...