Peppol – An introduction to the e-procurement network

Peppol the International e-Procurement Network – The Basics

| | Product Manager Business Unit Utilities, SEEBURGER
Peppol the International e-Produrement Network - The Basics

What is Peppol? What advantages are there to this international e-procurement network, and how do you use it? What technical standards are used to connect? Is there a list of all the participants in the network? And what role does international e-invoicing play in the Peppol network? Find out the answers to these key questions and discover the current developments in international invoicing with Peppol (PINT). A further post looks at e-tendering with Peppol.

Peppol – how does the international e-procurement network work?

The project initiated by the European Commission and the members of the Peppol consortium back in 2008 to simplify cross-border electronic procurement (e-procurement) has now grown into a global network. The technical and semantic standards defined and published by the network have been established in the European Union and its associated states (such as Norway) since 2019. States in the Asia-Pacific region such as Singapore, Australia and New Zealand have been part of the Peppol network since very early on.

Further countries in the Asia-Pacific region either joined or were preparing to join in 2020. These include Malaysia and Japan. There is also a keen eye on the network in North America, with Canada adopting observer status in 2020.

As a rule, when countries join the Peppol network, they set up their own Peppol Authority. This authority is the contractual partner for the Peppol Access Point providers. It defines country-specific rules and document standards, as well as advocating for its network users in the worldwide Peppol comunity. Germany’s Peppol Authority, for example, is KoSIT. In the autumn of 2020, the number of Peppol Authorities grew from 12 to 15, with the entry of Greece, the Netherlands and Iceland.

OpenPeppol Membership

The technical and semantic standards defined by the Peppol network allow its participants to all contact each other. Primarily, the network is used in the e-procurement process with public authorities (B2G). One of the biggest drivers for the use of the network is e-invoicing, which is, for example, stipulated in the B2G sector in Europe by the European directive 2014/55/EU.

The Peppol network is based on a 4-corner model. The sender in corner 1 (C1) and the recipient in corner 4 (C4), both select their own access point providers (C2, C3) and connect to these. It’s the access point providers which connect to the worldwide Peppol network.

How the users C1 and C4 connect to their respective access points depends on the technical and security requirements of the two parties, and is set out in a contract between user and access point provider (C1 with C2, C4 with C3). Within the network itself, the technical and semantic standards are defined by Peppol. This means that an access point can communicate frictionlessly with any other access point in the network. This is supported by a central directory which determines which access point is responsible for which participant and passes on the relevant coordinates to the sending access point.

Connect once, connect to all

The access points (C2 & C3) communicate via AS4, as determined by the Peppol network.

There is therefore no need to register to the Peppol network in order to send documents. You just need to connect to an access point of your choice and to know the Peppol ID of your recipient and which processes and document types they support. Within the B2G arena, in particular, supported processes and document types tend to be common knowledge.

If sending documents, you don’t even need to register to create a Peppol ID. Instead, this follows a particular format and can be created yourself using the Participant Identifier Scheme code list. In many countries, a main component of your Peppol ID is your VAT identification number. An example ID for Germany could be 9930:DE123456789.

The Peppol network has also defined the document types which can be sent over the network. These can be found here:

You can also find out which processes and document types a recipient accepts by looking in the Peppol Directory.

Looking forward to 2022: New developments in e-procurement

The internationalisation which has been taking place beyond European borders over the last few years, has shown that there is a clear need for a common invoicing standard. In order to meet this challenge, in 2019 a working group started meeting to define a standard which could be used worldwide.

“Connect once, connect to all” has therefore gained a wider significance than before. Not only will it become even easier to connect to the network, it will also become less important which document types a recipient does or does not support.

Peppol International Invoice (PINT)

The current definitions and standards used in e-invoicing in the Peppol network are encapsulated in Peppol BIS Billing 3.0, which in turn is based on the European core invoice standard. After also taking into account various country-specific requirements, particularly from Australia and New Zealand, a new standard for e-invoicing in the Peppol network has now been conceived and defined.

At its heart is the concept of a core invoice, such as that defined by the European Union. The result is an extension to Peppol BIS Billing 3.0, which covers invoice requirements across countries. This new standard, known as Peppol International Invoice, PINT for short, takes its cue from the European core invoice in that any documents which comply with its high standards can be received by anyone.

Peppol‘s international invoicing model
Figure 2: Peppol‘s international invoicing model

In order to ensure inter-operability for all users, there is a set of information elements used by everyone and, to maintain its conformity, may not be specified by users. This content is known as a shared layer and encompasses that content needed by all domains to automatically process an invoice.

There is also an aligned layer, which is agreed, semantically defined content which can be uniformly understood by anyone using the standard, but adapted to fit their specific needs. The content could be specific business rules, or a more specific content definition, and particularly contains tax and payment information.

In order to be able to meet special business requirements, it is possible to specify extended content. However, this does not necessarily have to be understood by a recipient in another domain/country or taken into account in processing.

This all means that the sender/invoice issuer, can reach any recipient using one standard, without needing to consider country-specific requirements. Important are the legal requirements in his own area.

Taking our cue from the term European core invoice, we could call this an international core invoice.

This also simplifies things for the recipient. PINT is not only a document standard, it is also a conceptional and technical extension which streamlines the declarations on what data types can be received. Indeed, the new definition can also function as a type of ʿwildcardʾ so that any document compliant with the given type can be received.

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Katharina Koch

Written by:

Katharina Koch, Product Manager, Business Unit Utilities, is responsible for management and product development in connection with market communication and SEEBURGER's e-invoicing solutions for the Utilities Industries. Katharina Koch has more than 15 years of business and technology experience in the utility industry, especially in the areas of market communication and SAP IS-U. Katharina Koch has been with SEEBURGER since January 2013.