Peppol is a framework set up by the European Union to enable the widespread use of public E-procurement. In other words, the aim is allow paperless commercial transactions between public authorities and their suppliers, including invoicing.
Peppol stands for Pan-European Public Procurement On-Line. Since its launch, this framework has been adopted throughout the EU and even further afield: Countries such as Singapore, Australia and New Zealand also use it.
Where does Peppol come from?
In 2008, as part of its digital strategy, the EU launched a series of large-scale pilot projects.. Peppol was one of them and set out to define a framework to overcome the obstacles to the widespread use of public e-Procurement and to check its feasibility.
This project involved 11 countries and many private operators, ran for 3 years and was allocated a total budget of € 30.8 million.
What obstacles need to be overcome?
Although large companies had been using e-Invoicing since the 1980s, in 2008 some of its features were hampering its adoption by public authorities and SMEs.
The problem was that the specific expectations of large industries led their IT solution providers to set up sectoral exchange platforms. Each sector, or each exchange group, therefore had its own exchange system, developed in a compartmentalised way. However, public authorities receive invoices from all sectors of activity. This is also the case for the majority of SMEs.
As a result, obstacles arise at 3 levels:
In terms of format: electronic invoices must be structured according to a common format in order to be processed automatically. However, each sector has developed its own format, which differs from that used by other sectors.
In terms of connectivity: electronic invoices must be forwarded from the sender to the recipient. However, a whole range of exchange platforms are in use, each more or less compartmentalised. Therefore, unless they dominate their market, companies that have to reach all their correspondents are forced to subscribe to several platforms and comply with their technical and pricing conditions.
In legal terms: invoices are of key financial importance. Legal uncertainty is an unacceptable risk for most companies. If, 8 times out of 10, the sender and the recipient use different operators, how can the legal validity of their exchanges be guaranteed? This situation requires the establishment of clear and coherent contracts between operators, which is a time-consuming process.
The Peppol measures and tools
To overcome these obstacles, the Peppol pilot project defined a series of measures and tools, and tested their effectiveness via a pilot project. It was not revolutionary by any means, simply a matter of applying common sense to the existing (and fragmented) e-Invoicing landscape to facilitate exchanges.
the definition of a standardised format putting different sectors on the same wavelength;
the drafting of framework agreements guaranteeing the legal security of the exchanges;
the creation of a cooperation model bringing together operators, users and regulators (authorities).
Who funds Peppol?
The implementation of the Peppol framework calls for a financial effort by all stakeholders involved. They are required to define and implement a programme of activities.
Who funds the implementation of these programmes?
The stakeholders themselves, since they will ultimately benefit from substantial efficiency gains, which justifies their investment.
The service providers take on the operational tasks through commercial offers. They then pass on the costs to their customers.
The authorities (often public services) have budgets that allow them to finance their programmes of activities. These are public resources, in other words, a contribution from businesses and consumers who will reap the benefits of e-Invoicing.
Finally, the role of openPeppol coordinator is financed through the contributions paid by its members.
The Peppol framework guidelines are implemented by hundreds of thousands of public and private companies in 32 countries, and by more than 300 solution providers, in 22 countries.
In Belgium, Peppol plays a leading role in the public authorities' e-Invoicing strategy. BOSA DT is the official Peppol authority for Belgium A national register of recipients has been set up 10,000 Belgian companies receive electronic invoices and there are about 30 service providers. The Mercurius and Hermes initiatives, designed to accelerate the adoption of e-Invoicing, fit in perfectly with this framework.
Since 2012, the non-profit association under Belgian law openPEPPOL has been playing the role of Peppol coordinator: its remit is to ensure that the global standards are available to all, up-to-date and can be implemented without ambiguity.
For more information, visit the official PEPPOL website.