Interview

PEPPOL, Core Invoice Usage Specifications, and the future of e-invoicing - interview with Comarch

Wednesday 25 September 2019 09:28 CET | Author Melisande Mual | Interview

Anna Bawól from Comarch E-invoicing offers an insightful take on the complex developments of the Pan European Public Procurement Online system

 

What are the main criteria to look at when selecting an e-invoicing solution?

In recent months, the number of players deciding to move from paper-based invoicing solutions to electronic documents has increased significantly. This has certainly been influenced by the rapidly changing rules defining the way in which invoicing is carried out in each country.

South America, in disseminating obligatory e-invoicing, shows a constantly increasing trend towards forming a digital society. Such measures are, in fact, intended to bring about the complete elimination of paper invoices not only in B2G processes, but also in transactions between private entrepreneurs. The phased introduction of comprehensive e-invoicing rules, and the expansion of existing solutions, is taking place in most South American countries. Across the continent, legal changes are being introduced in the area of digitising accounting processes. The same changes are also visible in Asian countries, including the adoption of e-invoicing in development strategies, and moves towards the implementation of standardized technical instruments for the correct processing of e-invoicing.

The current legal changes within the European Union are related to the implementation of Directive 2014/55/EU by Member States, in which public procurement processes are becoming digitised. Since 18 April 2019, all central public administration entities have been obliged to be prepared to receive and process structured electronic invoices. In April 2020, this obligation will be extended to cover local and regional authorities. This new legal landscape has forced many countries to swiftly redesign their e-invoicing solutions, prompting some to introduce compulsory electronic invoicing. With the exception of Italy, this tightening of legislation currently affects only B2G transactions, but ongoing changes reflect new business necessities emerging in accounting processes.

Tailor-made e-invoicing solutions may, in my opinion, significantly improve the accounting processes and reduce cost of day-to-day business activity. I therefore firmly believe that the most important thing in devising an e-invoicing strategy is to address business needs first, and answer a few key questions. For example, what is the territorial coverage of services? What consumer types are invoiced? Are invoices addressed only to private companies, or to public bodies too? Analysis of the answers to these questions will suggest the most appropriate e-invoicing model for a given organization.

All businesses must adhere to national regulations wherever they operate. These regulations may differ from one country the next, or depend on the type of transaction concluded. It is also possible that the geographical area in which an organization operates requires the use of a strictly defined invoice format. For example, public authorities demand electronic invoices in structured format, while local standards or even PDF invoices are most common in transactions between private entities. It is therefore of utmost importance to define the business needs before choosing the most appropriate way to maintain e-invoicing processes. This is also why the support of an e-invoicing provider is so popular, as this gives an organization access to a specialized company which takes responsibility for ensuring legal compliance.

What role does PEPPOL play when it comes to managing global e-invoicing projects?

PEPPOL is currently used in more than 30 countries and its further expansion is virtually certain. Moreover, by leveraging established eDelivery Network technical standards and common business processes, PEPPOL aims to facilitate electronic document exchange between country-specific e-procurement systems. Ensuring compliance with the European standard on e-invoicing (EN-16931-1:2017), the PEPPOL Network also complies with the requirements imposed by Directive 2014/55/EU, which amends the European Union e-procurement regulatory environment.

Using a PEPPOL-based solution is therefore, in my estimation, highly recommended for entrepreneurs involved in public procurement processes. This is especially true if we consider that, during implementation of the Directive, many EU countries decided to allow electronic invoices to be delivered to public administration entities precisely via the PEPPOL infrastructure. For international companies, this is a great opportunity to avoid the necessity to be directly integrated with national e-invoicing platforms used in public procurement processes, which is exactly what happened in Croatia recently. Thanks to FINA’s Access Point, it was not needed to integrate with the e-Racun Platform in order to fulfil the e-invoicing obligations for B2G transactions introduced on 1 July.

Thus, when it comes to managing maybe not global (because PEPPOL is popular mainly in Europe), but at least international e-invoicing projects, it should be considered as a solution allowing entrepreneurs to dodge complicated adaptation to local legal requirements and dedicated formats, such as the Italian FatturaPA or Finnish Finvoice. Also, countries such as Germany and Poland, in which public contractors will be obliged to issue electronic invoices from November 2020, are making it possible to exchange electronic documents via PEPPOL Access Points. Seen from this perspective, the PEPPOL Network, which is based on the widely used UBL standard, allows global traders to make significant cost reductions.

What market needs does a PEPPOL-based solution cover? Does it cater to all business requirements?

Using PEPPOL is probably the easiest way to access European public administration entities. However, its initial implementation stage in many countries does not provide all availability to all public authorities at this moment. That problem is noticeable especially in the countries in which PEPPOL is being introduced to supplement existing e-invoicing solutions, for example Austria and Denmark. Moreover, sending electronic invoices via the PEPPOL infrastructure is possible in many cases only when dealing with federal or central public entities, whilst local and regional authorities remain unregistered in the PEPPOL Network.

Naturally, it has to be said that PEPPOL is much more often chosen by entities dealing with public authorities than by those exchanging invoices between private businesses. Thus, it is not a suitable solution for entrepreneurs not taking part public procurement processes. In B2B transactions, we should rather expect particular native formats and national rules; in the event of their absence, invoices are most likely to be created in PDF format and sent via email. Businesses should therefore be prepared for facing the need to diversify their e-invoicing processes within even one country.

That is also why choosing a suitable e-invoicing provider is so important. It is essential to consider all legal requirements, so small entrepreneurs may find a local company that offers sufficient support, while global enterprises should seek international operators capable of delivering a complex, comprehensive e-invoicing solution that handles public private customer invoicing.

Could you elaborate on the national provisions within the CIUS - Core Invoice Usage Specifications (eg XRechnung format)?

The PEPPOL standard intends to simplify issuing and receiving electronic invoices between the Access Points within the Network. However, even assuming the use of PEPPOL for dealing with European public authorities, the existence of national derogations called CIUS should be considered.

CIUS, as The Core Invoice Usage Specification, encompasses specifications containing business rules required by a specific country, as well as guidance with examples. Countries introducing CIUS are interested in more adequately matching invoices to local needs of entrepreneurs and public administration. Thus, CIUS differ from one country to another and may apply national regulations and restrict data format or impose data restrictions to support national business practices.

An interesting example of CIUS of the European Norm EN 16931-1:2017 on e-invoicing is the German XRechnung format, which, as of November 27, 2020 will be required by the German federal administration (Bund). While the federal authorities are already technically able to receive electronic invoices via PEPPOL (based on the Central Invoicing Platform (ZRE)), the state authorities differ in levels of readiness, and it will take some time until all regions become active within the Network. Some, such as Bremen, have decided to implement XRechnung as the mandatory format for senders.

Will the PEPPOL network extend to new countries (e.g. Australia, New Zealand, India) and regions? What can you tell us about the South American region and PEPPOL? How does the PEPPOL Network development forecast look like for the next years?

An e-invoicing solution based on the PEPPOL infrastructure has already proved very successful in Singapore, making it a pioneer in Asia, significantly facilitating European entrepreneurs’ market entry and benefitting the national economy. By the end of this year, sending electronic documents via PEPPOL Access Points is expected to be possible in Australia and New Zealand. Public consultations regarding this matter ended in mid-August, attracting enormous interest from global e-invoicing providers. The USA and Canada have also indicated a strong desire to introduce national PEPPOL-based solutions. Surprisingly, India, has also announced its willingness to join the PEPPOL Network – which is of particular interest due to the number of invoices exchanged there annually. As one of the world’s fast-growing economies, India is certainly an economy offering huge prospects for entrepreneurs.

In contrast, South America and Spanish-speaking countries in general show no interest in PEPPOL. In light of the smoothly running local e-invoicing solutions in these places, I do not hold out much hope for PEPPOL Network expansion there. Rather, PEPPOL implementation in South America and Spain seem rather impossible in the foreseeable future.

For now, PEPPOL remains mostly a solution for European countries. There are strong indications that more and more countries from different parts of the world will decide to join the Network soon, but it is very difficult to predict whether PEPPOL might develop into a global standard. Nevertheless, it is a platform with growing transcontinental potential, and observing the pace of its development is particularly interesting.

About Anna Bawól

Anna Bawól is a compliance expert at Comarch E-Invoicing. With Master’s degrees in Law and Philology, her professional research is focused on international and constitutional law. Anna is responsible for legal compliance issues and monitoring legislative developments in global e-invoicing.

 

 

 About Comarch E-Invoicing

Comarch E-Invoicing is one of the Comarch brands, which provides cutting-edge technology, allowing the enterprises to automate the supply chain and invoicing processes. A comprehensive approach to both internal and external cloud-based collaboration with all partners (suppliers, customers, logistics operators, and service providers), including the exchange of product, merchandising, analitical, logistic and financial data, delivers the best results. Consequently, companies are provided with access to reliable data, optimisation of processes with Robotic Process Automation, and lower document handling costs.

 


Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: Anna Bawól, Comarch, Comarch E-invoicing, PEPPOL, Pan European Public Procurement Online, Core Invoice Usage Specifications, Europe, e-invoicing, e-procurement, XRechnung, CIUS, Central Invoicing Platform, FatturaPA, Finnish Finvoice, B2B payments, B2G
Categories: Payments & Commerce | E-invoicing, SCF & E-procurement
Countries: World
This article is part of category

Payments & Commerce