In our previous article, we talked about Peppol, what it is, and how its infrastructure works, and how it can support companies and public administrations in digitizing procurement processes.
In this piece, we want to focus on the relationship between the electronic invoice and Peppol and, in particular, on the role that Peppol has demonstrated it can play in the spread of e-invoicing abroad, thanks to its own features.
How widespread is Peppol?
From the days when it was just a pilot project in 2008, Peppol has grown into a deeply structured network involving professionals, businesses, and public organizations from all over the world.
Initially, Peppol was to be the solution that would enable trade between entities and companies established in different states of the European Union. Therefore, it was supposed to be one of the main tools for creating a single market in Europe.
But from the start, Peppol was able to attract the interest of other countries, soon spreading far beyond European borders.
Considering the data made available by OpenPeppol, i.e., the nonprofit association that manages the network, according to the latest update in June 2022, 41 countries in the world are members of the Peppol network.
Of these, not surprisingly, most belong to the European Union. The non-European countries that have chosen to join the network are significant: the United States, China, Japan, Australia, New Zealand, Singapore, Mexico, Switzerland, the United Kingdom, Canada, India, and Turkey are just a few of the non-European states now participating in the Peppol network.
Of course, there are multiple levels of maturity among the member countries. While some countries have very large numbers of Access Points (such as Norway and Italy, currently leading the way with over 50 accredited Access Points each), others have small numbers of Access Points. This may be related to multiple factors, such as the size of the country, the degree of deployment and use of the solution, and the presence or absence of accredited service providers capable of supporting the service.
It’s clear, then, that the Peppol network is growing and expanding at a steady pace. Often, this growth is also stimulated by the fact that several states have chosen Peppol as the sole or preferred channel for transmitting B2G or B2B electronic invoices.
This approach means that companies and local governments are required to interface and comply with Peppol, but this should not be seen merely as an extra requirement to comply with. On the contrary, it can be a valuable booster for companies: the now global spread of Peppol offers companies that adopt it a powerful and interoperable means of enabling business transactions even between economic entities residing in different countries, in a market that is destined to finally become single and interconnected.
This is why regulatory compliance aimed at adopting Peppol can drive innovation and growth for interested companies, just as the electronic invoicing requirement in Italy has contributed to the growth of Italian companies.
But let’s go in order and see which countries have chosen Peppol as a channel for e-invoicing.
The link between the electronic invoice and Peppol
In many countries, Europe and beyond, the e-invoice and Peppol are closely linked. In fact, many have precisely chosen to start with Peppol to implement the mandatory e-invoice, or to incentivize its adoption.
Belgium, Croatia, Finland, Ireland, Latvia, Luxembourg, the Netherlands, Norway, Sweden, and the United Kingdom (at the central government level) are among the European countries that have identified Peppol as their sole or first choice for managing the sending and receiving of B2B electronic invoices.
With the exception of Ireland, where B2G e-invoicing is still only optional, all the other countries we have listed have full or partial obligations that bind companies supplying public administrations to generate electronic invoices exclusively. Therefore, these companies are already accustomed to handling electronic invoice exchanges through the Peppol network. This also means that foreign supplier companies that need or want to send electronic invoices to such public administrations must be able to manage invoices in Peppol format by turning to enabled and accredited service providers.
In addition, Belgium is preparing to introduce a mandatory e-invoicing requirement in the near future in the B2B sphere as well, and it is likely that it will do so using the Peppol network, thus leading to widespread deployment among businesses in the territory.
Some countries, although they have developed national platforms and standards, still support B2G invoicing through Peppol as well. This is the case, for example, in Austria, Germany, and Slovenia. In Italy, too, foreign PA suppliers can send an e-invoice through Peppol. In fact, there is already an integration between the Peppol network and the Sistema di Interscambio (SDI) that allows for the proper transit and delivery of invoices, in compliance with the requirements of the Italian Revenue Agency.
What about non-European countries?
Even abroad, there are several countries that have taken the plunge and decided to use Peppol to incentivize the use of electronic invoicing or to introduce its obligation.
Singapore was the first non-European country to join the network. Although the electronic invoice is still only optional to date, since 2020 Singapore has sought to incentivize its use, focusing businesses’ attention on the benefits it offers. First and foremost, management and organizational benefits, as the e-invoice drastically reduces processing time and also results in faster payments from contracting governments. In addition, through the use of Peppol, Singaporean businesses have seen an increase in cross border trade and particularly with Australia, another state participating in the network. But at first, Singapore also piqued the interest of local businesses by offering an economic incentive, amounting to a $200 bonus for each business that chose to join the network.
As we noted, Australia is also part of the network, but it has not limited itself to this. In fact, in Australia, the use of Peppol goes hand in hand with the electronic invoicing obligation. Currently, the obligation only covers the B2G sector, but it is a recent decision by the local authorities to introduce mandatory e-invoicing also in the B2B sphere and always through Peppol channels and formats. The obligation will gradually involve Australian companies starting in 2023, initially affecting larger companies and then medium and small companies and through progressive steps.
An evolving scenario: next steps
Peppol is an evolving scenario in all aspects. Not only because it is constantly expanding and seeing increasing participation from companies and countries around the world, but also because the OpenPeppol community is constantly working on new projects to ensure the continuous evolution of technological tools and solutions to support companies and public administrations.
In fact, Peppol today enables the management of all business documents related to procurement and contracting procedures. The community is also working to offer new tools, such as an efficient CTC (Continuous Transaction Control) system, which is linked to the network and able to offer tax authorities an interoperable tool for monitoring tax compliance and managing related data.
Such a solution, integrated with existing Peppol solutions already in use, would enable tax authorities to acquire the information they need, limiting the impact associated with setting up a new system and consequently also facilitating small and medium-sized businesses, which would not have to make costly investments to adapt to new systems. However, these are still ongoing projects, so it only remains to be seen where they will lead us.
The strengths of Peppol
But what are the reasons behind Peppol’s wide and steady uptake? What strengths characterize it and thus make it the best candidate to support the adoption of electronic invoicing by an increasing number of businesses and institutions?
Certainly, among the features that help put Peppol at the top of the list when it comes to choosing an e-invoice solution, we can include the following:
- Presence of a shared and maintained set of technical specifications and standards that can be used. This means having the guarantee of using a set of tools that support interoperability between companies worldwide, fostering their growth. It also means minimizing the technological effort for companies and public bodies, which do not have to build infrastructures, platforms, technical specifications, and exchange protocols for electronic invoices from scratch;
- Presence of a solid and growing community composed of service providers and industry experts for constant comparison. As we have seen in the previous paragraphs, the Peppol community does not stand still; in fact, it’s seeking to capitalize on the dialog with market players and industry institutions, and it promotes continuous innovation, working on new projects and solutions;
- OpenPeppol Association, which, in addition to keeping standards up to date, offers support and runs initiatives aimed at stimulating the creation of connections between users and providers;
- Last but not least, Peppol is not just a standard for electronic invoicing, far from it. There are several documents that can be managed through Peppol to date, precisely because the standard intends to support the exchange of the full range of information and documents of a commercial nature. To date, therefore, in addition to the invoice, Peppol offers paths and formats for creating electronic orders and electronic transport documents. These different tracks are natively integrated and interoperable with each other, so it’s possible to link an invoice to the respective order and transport document, tracking the entire transaction and making it transparent. In other words, Peppol already makes it possible to digitize the entire procurement cycle with a single set of technical specifications and through an already established and expanding network.
As an accredited Peppol Access Point and Peppol Service Metadata Publisher (SMP), Doxee is part of the OpenPeppol community and enables companies and public administrations to exchange order documents through the Peppol network.