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Peppol: Standardising, and securing the way for businesses to exchange procurement documents and e-invoices across borders

In today’s global economy, businesses are expanding across borders and dealing with customers and suppliers from different countries. Consider a supplier from the Netherlands sending an invoice to a customer in Norway or the UK. In the past, this process might have involved emailing PDFs, faxing documents, or even using paper. This can lead to several issues: lack of traceability, non-compliance with accounting and financial regulations (VAT rates, electronic invoicing standards, etc.), currency differences, and payment differences. All these problems increase the risk of accounting data manipulation and, consequently, the risk of fraud. Now, think about whether that same process could be automated, where the invoice is generated by the supplier’s system and directly sent to the customer’s system, validating that all rules and requirements are correct. This is where PEPPOL steps in.

In this article, Sarra Fellah and Amit Kumar Agrawal dive deep into the details and PEPPOL and share their insights.

PEPPOL (Pan-European Public Procurement Online) provides a solution by offering a standardised, secure way for businesses to exchange procurement documents and e-invoices across borders. It uses technical standards to ensure that the documents are compliant with local regulations and formats, making cross-border transactions simpler and more efficient.

By using PEPPOL, businesses can easily automate the exchange of documents like invoices, without worrying about the different rules in each country. This leads to faster processing, fewer errors, and a more streamlined workflow for global trade.

Key Features of PEPPOL

  • Access Points: Companies use certified PEPPOL Access Points to connect to the network, ensuring easy and secure document exchange. This is similar to an email system but with stricter controls and standardization.
  • Globally Adopted: Though initially a European initiative, countries outside the EU, like Australia, New Zealand, and Singapore, have adopted PEPPOL for public and private procurement.
  • Standardisation: PEPPOL uses Universal Business Language (UBL) and EN 16931 standards to ensure a common format, reducing complexity and the need for multiple formats in international transactions.
  • Standard Document Exchange: It allows organisations to connect through Access Points, enabling them to exchange standardised electronic documents such as invoices, purchase orders, and delivery notes securely.
  • Interoperability: Ensures seamless communication between different systems and applications, regardless of the providers or geographic location.
  • Compliance: Compliance with EU regulations and secure data exchange using encryption and authentication mechanisms.

Common Uses of PEPPOL

  • E-Invoicing: Automating and streamlining the invoicing process to comply with regulations, reduce errors, and speed up payment cycles.
  • Public Procurement: Facilitating cross-border public procurement activities in line with EU directives.
  • Supply Chain Management: Exchanging business documents across the supply chain efficiently.

Benefits of PEPPOL

The key benefits of PEPPOL can be grouped into financial advantages and systems advantages.

Financial Advantages

  • Ensure the reliability of accounting and financial data: it’s crucial for maintaining the trust of stakeholders, including investors, regulators, and internal decision-makers.
  • Simplify monitoring and controlling processes: routine checks and reconciliation will be automated. It also ensures data integrity by reducing gaps and vulnerabilities in financial workflows.
  • Minimise human intervention and thereby reduce the risk of errors: automated workflows speed up repetitive tasks and allow the accounting team to focus on value-added activities. It also limits manual involvement and so intentional data manipulation.

System advantages

  • Avoid Change requests: several companies request from their ERP consultants to make specific developments to adapt the invoicing format according to specific standards, which causes time and money losses. PEPPOL uses Universal Business Language (UBL) and EN 16931 standards to ensure a common format, reducing complexity and the need for multiple formats in international transactions.
  • Reduce the load on the ERP: Outsourcing reduces the load on the ERP by delegating billing processes to a specialized application. This can enhance processing times and the ERP’s efficiency.
  • Establish a secure and agile connection with customers: PEPPOL enhances real-time communication by providing 24/7 access to their billing documents. It also uses role-based access controls, which allow for protecting customers’ data by ensuring only authorised users can access or modify it.

Infor LNCE and PEPPOL: The Integration

Infor LNCE (Infor LN CloudEdition, the CloudSuites of Infor) connects to the PEPPOL network via the Infor Localisation Services Platform (LSP). This integration leverages the PEPPOL Four-Corner Model for document exchange, involving:

  1. Your Company (the sender).
  2. The Recipient (trading partner).
  3. Your Company’s Access Point (Infor LSP).
  4. The Recipient’s Access Point (via PEPPOL).

Through this setup, Infor LNCE ensures seamless e-invoicing for businesses, regardless of their ERP provider, as long as both parties are PEPPOL-registered. Here’s how it works:

  • Access Point Connection: The Access Point facilitates the exchange of e-documents such as e-invoices, validating them against PEPPOL standards before transmission.
  • PEPPOL Directory Lookup: The PEPPOL Directory (accessible at PEPPOL Directory) contains a list of registered users and their document receiving capabilities. Through this directory, trading partners can: Verify if a partner is connected to the PEPPOL network. Identify the types of documents (e.g., e-Invoices) a partner can receive.
  • Compliance and Standardisation: The Infor Localisation Services Platform ensures documents meet both PEPPOL and regional regulatory requirements, reducing the risk of non-compliance.
  • Streamlined Integration: Infor LN users can send and receive business-critical documents, like e-Invoices, directly through the PEPPOL network without additional middleware or manual intervention.

Key Steps for PEPPOL E-Invoicing in Infor LNCE

  • Create and Post an Invoice. Generate an XML invoice in Central Invoicing (cisli3600m000). Ensure XML generation is enabled in the Invoicing Parameters (cisli0100m000) session.
  • Send Invoice to ION and LSP A Sync.Invoice BOD is transmitted to the Infor ION platform and then to LSP, triggering the transformation into a JSON file compatible with PEPPOL standards.
  • Validation and Address Query. The JSON file is validated using the PEPPOL Service Metadata Provider (SMP) to check the recipient’s capabilities. The recipient’s endpoint is then identified in the Service Metadata Locator (SML) directory.
  • Secure Document Exchange Once validated, the document is sent via Access Points to the recipient, where it becomes accessible in their system.

Supported Scenarios

  • PEPPOL integration supports a range of e-invoicing functionalities, including Standard e-Invoices, Return Sales Orders / Credit Notes Instalments (Direct and Indirect Settlements), Cost/Charge Invoices
  • Some scenarios, like Advance Payment Requests or certain Credit Notes, are currently unsupported but will be considered in the future.

Analytics and Trends

  • Global Growth in E-Invoicing: As per Gartner, the global e-invoicing market is projected to grow at a 17% CAGR from 2023 to 2030, reaching over $20 billion by 2030. This growth is fueled by government mandates, such as PEPPOL, in regions like Europe and Asia. Gartner
  • PEPPOL Expansion: Countries outside the EU, including Singapore, Australia, and Canada, are increasingly adopting PEPPOL, with integration expected to increase by over 30% year-on-year across Asia-Pacific and North America by 2025 Technology Evaluation
  • Government Mandates: By 2025, 80% of businesses in Europe are expected to use e-invoicing due to government mandates tied to PEPPOL and similar frameworks. Non-compliance is projected to result in financial penalties for at least 25% of SMEs Gartner
  • Cost Reduction: Businesses using PEPPOL-integrated ERPs report an average cost saving of 50-80% per invoice compared to manual processing. This equates to savings of approximately €5-€10 per invoice meta Home Page – Server
  • AI and Analytics Integration: By 2028, 65% of ERP systems are expected to incorporate AI-driven analytics for real-time monitoring of e-invoicing compliance and fraud detection. This could lead to a 20-30% reduction in compliance errors Gartner
  • Market Reach: With the rising importance of globalization, PEPPOL-integrated ERPs are expected to dominate over 50% of cross-border trade systems by 2030 Technology Evaluation
  • Automation Impact: Over 55% of businesses with integrated e-invoicing and ERP systems report reduced invoice processing times by up to 70%, highlighting the efficiency gains meta Home Page – Server

Challenges and Solutions

  • Country-Specific Standards: Some countries have unique requirements, but Infor’s LSP ensures compatibility.
  • Partial Support: Certain scenarios, like advance payment requests, are still being developed.

Summary

PEPPOL e-invoicing integration with Infor LNCE simplifies compliance, reduces operational overhead, and enhances transparency. The Infor Localisation Services Platform (LSP) provides the backbone for this connection, ensuring businesses can leverage the PEPPOL network effectively.

For detailed guidance, including country-specific requirements and technical setup, refer to Infor KB2270120.

This transformative integration is necessary to stay ahead in digital invoicing. We, as partners 2 innovate services can offer the services to implement this feature and support. Let us know if you’re ready to get started!

 

Written by Sarra Fellah and Amit Kumar 

November 30, 2024