How Does Peppol E-Invoicing Work?

By  //  January 3, 2022

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Peppol e-invoicing has a lot of enthusiasts across the globe. The idea of e-invoicing has been around for years. But the first initiation of the Peppol set of standards was only 13 years ago. Electronic invoices have solved a lot of problems in the global market.

They come with several standards and formats. The main objective of the electronic invoice solution is to connect the buyers and suppliers digitally.

However, not all e-invoicing systems are equally good. When it comes to the set of standards, cross-border transactions are often more prone to pitfalls due to the differences in the framework of transactions.

Not to mention that traditional e-invoicing systems were far more expensive to implement.That’s why many small to mid-sized businesses find it more convenient to use digital invoices like PDF invoices or go with the basic paper invoices.

The EU has come up with the best solution for the matter. There’s a great solver which focuses on the adoption of a standard set for exchanging business documents called Peppol—Pan-European Public Procurement Online. This set of specifications allows the members of the network to send e-invoices and other types of business documents safely to their recipients. The Peppol framework allows businesses to interact with other businesses with fewer risks of disputes, errors, and misunderstandings.

There are hundreds of thousands of businesses across the globe that have been involved with the Peppol Network. Most businesses are striving to implement a Peppol solution because of the government’s mandates.

There have been a lot of successful stories that have convinced other countries to adopt the same solutions for their existing systems and software. But how does it work exactly?

The supplier will generate an invoice in their existing accounting or ERP system and send it to the certified Peppol Access Point.

The sender’s Peppol Access Point will automatically check the invoice to make sure that it has met the standards of the Peppol network. Then the sender’s AP will send it over electronically to the recipient’s AP.

The recipients’ AP will then receive the accurate invoice and process it directly into their accounting or ERP system and software. Contrary to conventional invoicing, it happens only in a few minutes and it is done.

The invoice from the sender will automatically enter into the receiver’s system.

There is no need for you to cross-check the information manually. All is done automatically, so it can save you a lot of time and money in the process.

Is Peppol e-invoicing free?

No, it is not free. But compared to conventional invoices, it is much more affordable. Let’s take a look at an example of e-invoicing in Australia. The costs might be different from one company to another, but here is a brief description of the pricing.

The paper invoices would cost AUD 30 per invoice. Meanwhile, the PDF invoices could cost AUD 27 per invoice. 

Meanwhile, Peppol e-invoice could cost less than AUD 10 per invoice, depending on the service type.

You could compare the costs that you will need to deal with Peppol e-invoices with the regular invoices and see the exact differences there. Multiply the figures with the frequency of sending the invoices. Obviously, Peppol e-invoicing is much more affordable.

But when it comes to the cost of using Peppol’s e-invoicing solution, there are two types of payment that you need to prepare for. 

The first one is the implementation fee. 

The implementation fee covers the initial adoption of the Peppol solution into your system. That includes the registration of your company with the trusted peppol service provider to attain the Peppol ID so that you’re ready to get involved in the Peppol network. Not to mention, the cost of integration with your accounts receivable platform is also calculated in the implementation fees. 

The second type of cost is the monthly subscription fee. Once your existing ERP software is connected to your trusted access point, you will need to pay a monthly Peppol subscription fee. The cost covers the sending and receiving of the business documents.

The subscription fee is based on the volume of your transactions. So, you will only pay for what you use. If you are scaling up, you don’t need to worry. Your access point provider usually offers you good discounts for large volumes.

What is Peppol e-invoicing?

PEPPOL is the short form of “Pan-European Public Procurement Online.” The network was initiated in 2008. However, it has only been effective in recent years.

With the peppol e-invoicing solution, all organizations across the globe can exchange business documents on a reliable international network. It gives huge opportunities for small-to-mid-sized businesses to take part in the global competitive market.

As your company has joined the Peppol network, you won’t only be able to send the invoices, but also receive them. Remember that Peppol e-invoicing is only one of Peppol’s missions.In the future, OpenPeppol will develop the frameworks for all of the online procurement, besides the invoices.

Peppol e-invoicing is totally different from the other solutions. It offers much faster delivery with lower costs compared to paper invoices and PDF invoices. Not to mention, this e-invoicing is automated. Imagine how much time you can save for your administrative tasks.

What is e-invoicing and how does it work?

E-invoicing, or electronic invoicing, is the activity of invoice issuance electronically using a standardized format. The e-invoices come with accurate and responsible invoice data, which is automatically stored in the recipient’s accounts payable software. All is done automatically, so that eliminates the need for cross-checking manually. 

How do I send a Peppol invoice? “

To send a Peppol invoice, you must first register your company with the Peppol Access Point provider. Once it is done, you will receive a Peppol ID and your credentials in order to create the invoices and send them through the Peppol network.

Then you will only need to enter your information once. Your company information will then appear every time you send the invoice to your partner.

The next thing to do is to select your recipient. 

Enter the information about the services, pricing, payment date, and so on. Then you could click Send. In no time, your invoice will be sent to your recipient. 

It is easy, isn’t it? Get your Peppol solution now by reaching out to Tickstar.