What began as a limited intra-community EU public procurement document interchange project is now rapidly becoming a global invoice and procurement exchange cornerstone. The PEPPOL network is expanding into more and more countries, even outside of its native European Union. Read this article to discover what PEPPOL is, why it has become a driving force for universal secure invoice exchange, and how it functions.
What is PEPPOL?
PEPPOL is a document exchange network that enables its members to send and receive electronic documents efficiently and safely. The abbreviation “PEPPOL” stands for “Pan-European Public Procurement On-Line.”
The Story Behind PEPPOL
Established in 2008 as part of the European Union’s initiative to nurture innovation, PEPPOL initially operated under a multilateral agreement among member states. Its success led to the assignment of its mission to an emerging non-profit association called OpenPEPPOL after the project’s conclusion in 2012.
PEPPOL’s initial goal was to integrate and streamline the EU’s public procurement processes, emphasizing interoperability between different Electronic Data Interchange environments. Numerous new technical standards were established to create interoperability for stakeholders across the Union. Unlike legacy EDI solutions, the new network eliminated the need to maintain individual document interchange agreements with each business partner, offering universal access points to reach all network members without contacting each partner separately.
PEPPOL is also used outside the EU in countries such as Canada, the US, Singapore, and New Zealand.
PEPPOL in B2G and B2B
Over the years, the network has expanded not only territorially but also in its operational scope. Nowadays, it covers the original public procurement document interchange and broader B2B exchanges, including cross-border e-invoicing.
Communication throughout the network is set up like a 4-corner model featuring a central directory service relaying specific routing data in the back end. The initial sender and final recipient stand opposite the model's upper ends, each with their respective access points and service providers.
How Does PEPPOL Work?
To understand how PEPPOL works, knowing about the PEPPOL Access Point is essential. It is a service or service provider that allows you to exchange documents via PEPPOL. Your PEPPOL Access Point, such as Comarch, ensures your documents meet all PEPPOL requirements and criteria, facilitating the secure exchange of documents with your business partners.
PEPPOL operates similarly to telecom providers. Just as you dial a number and your telecom provider connects with the recipient's provider, PEPPOL follows a similar mechanism.
The sender uploads the outgoing document to an access point of choice, and after fetching stakeholder routing data (PEPPOL ID) from the central PEPPOL directory, the sender’s access point forwards the document to the recipient’s access point, from where it can be freely downloaded.
The relative simplicity of PEPPOL offers several advantages:
· Visible expedition of invoice and other document traffic strengthens cash flow and streamlines customer relationships.
· Encrypted communication channels enhance data exchange security.
· Far-reaching automation of traffic and broad interchangeability significantly lower transfer costs per document.
· PEPPOL is rising and set to become a global golden standard in document exchange.
Is PEPPOL Mandatory?
As of April 2020, all EU public entities and authorities are required to be capable of receiving and handling e-invoices sent via PEPPOL. This offers an opportunity to streamline both national and cross-border B2G transactions and eliminates diverse criteria for public procurement processing set in different countries.
Comarch is a member of OpenPEPPOL and a certified PEPPOL Access Point. It provides its clients with fast and reliable electronic document exchange with public administration entities and companies operating within the network. For more information, contact Comarch experts.