Anyone who wants to send and receive invoices electronically is in fact making two choices. The first concerns the solution on your side: how you create and receive invoices. The second concerns the channel through which the invoice travels. Which combination fits depends not only on your own software and volume, but above all on what your recipient requires or accepts. On this page you can read which forms and channels exist and how to make the right choice.
A PDF sent by email is not an e-invoice
A PDF invoice that you send by email is digital, but in technical terms it is not an e-invoice. The recipient still has to copy the data or have it extracted. A true e-invoice is a structured data file, usually in XML format, that the recipient’s software can read in and process automatically. This saves manual work, prevents errors and speeds up payment. You can read more about the basics on What is e-invoicing.
Two layers: your solution and the exchange channel
It helps to keep two things apart. Your solution is the way you create and receive invoices: via a web portal, your accounting package, your ERP system or EDI software. The exchange channel is the route through which the invoice travels to the recipient.
Many accounting packages and ERP systems have a standard integration or network adapter that allows them to exchange invoices via one or more channels. The channels your software supports determine which recipients you can reach.
Solutions on your side
Web portal
Accounting package with e-invoicing module
ERP integration or API
EDI software or EDI service provider
Which exchange channels are there?
Alongside your own solution, the exchange channel determines which recipients you reach. These are the main types:
| Channel | How it works | Reach | Who bears the effort | Typical use |
|---|---|---|---|---|
| Direct connection / EDI | Two parties connect their systems directly, or via an EDI service provider, with agreements per trading partner. | Only the partners with whom a connection has been set up | Both parties, per connection | Large, recurring invoice flows between established trading partners, such as in retail and logistics |
| Buyer’s supplier portal | The supplier enters or uploads invoices in the buyer’s portal. | Only that one buyer | The supplier: manual work per buyer | Suppliers with few invoices to a large buyer |
| Closed network of a Business Service Provider (BSP) | The buyer chooses a network, such as SAP Business Network (Ariba), Tungsten Network or Coupa. Suppliers register per network. | Only participants in that network | Often the supplier, via connection or transaction fees | Large purchasing organisations that want to outsource their invoice receipt |
| Open network with service providers | You connect once to a service provider. Service providers are interconnected and route messages for each other. Examples are Peppol (international) and DBNA (United States). | All participants on the network, regardless of their service provider | Both parties, each with their own service provider | Widely applicable, from SMEs to government, often built into accounting software |
| Government platform | Invoices pass through a central government platform, such as SdI (Italy), FACe (Spain, government invoices) or KSeF (Poland). | Depending on the country: government recipients, or all invoice traffic | The sender, who must follow the country-specific requirements | Legally prescribed, in the country concerned or towards the government |
In the comparison tool on Peppol.now you can see which solutions and channels each provider supports.
Which form suits you? Start with the recipient
The right choice does not start with your own preference, but with the question of what your recipient requires or accepts. Only then do you determine which solution best matches that in your situation. Step 1: what does your recipient ask for?
Governments
In many European countries, governments ask for e-invoices via the Peppol network. This is not the case everywhere. Some countries have their own government platform. In Italy, all invoices pass through SdI. In Spain, suppliers submit their invoices to the government via a central point of receipt, such as FACe.
Large companies
They often work with multiple channels at the same time: EDI for large invoice flows with established, large suppliers, and a supplier portal for smaller suppliers with few invoices who do not yet see a reason to invest in e-invoicing software. In addition, they often use a closed BSP network to outsource their own invoice receipt; the costs and effort then often lie with the supplier, who thereby pays for the buyer's efficiency. Increasingly, they also opt for an open network such as Peppol, to accommodate smaller suppliers who are already connected via their accounting package.
SME buyers
They usually receive via their accounting package. You can often see in a public address book, such as the Peppol address book, whether and how a recipient can be reached.
Buyers abroad
A statutory channel may apply there, such as a national platform or a mandatory network.
Step 2: what suits your situation?
- Digital landscape: do you work without e-invoicing software or a module, with an accounting package, or with an ERP system?
- Volume and spread: how many invoices do you send, and how many buyers require an e-invoice via which channel?
- Ambition: do you only want to meet a buyer’s requirement, or do you also want to receive, post automatically and automate processes?
- Investment capacity: what may the solution cost, per month, per invoice and per connected channel?
In practice
- Few invoices, no e-invoicing software or module: a web portal is the quickest start. With one large buyer, this may be that buyer’s own portal.
- An accounting package: check which channels the e-invoicing module supports, and whether those are the channels your buyers use.
- An ERP system and many large buyers: preferably choose a service provider that bundles multiple channels, so that a single integration covers EDI, open networks and closed networks.
Not sure? Never choose solely on the basis of what is easiest for you. Ask your buyer which channel and which format they accept. A solution the recipient cannot process gets you nothing. Then preferably choose a solution that also supports other channels or can add them later, so that you can grow along when buyers or legislation impose new requirements.
With any solution, check: Can you receive as well as send? Which channels and networks are supported? Does the solution support your buyers’ countries and formats? And what does each additional channel cost? You can see which providers meet your requirements in the comparison tool. More help with weighing your options can be found on Choosing an e-invoicing solution.
For government organisations
Directive 2014/55/EU requires government organisations in the European Union to be able to receive and process e-invoices according to the European standard EN 16931. For suppliers, the directive leaves sending optional: they are free to choose how they invoice. Member States may, however, go further, and a number of them do:
- Italy: all invoices pass through the SdI platform.
- Spain: public limited companies and private limited companies, among others, must invoice the government electronically.
- Sweden: suppliers must send e-invoices for tenders launched from 1 April 2019 onwards.
Individual government organisations also increasingly set e-invoicing as a contract condition. For governments, it is important that small suppliers can also submit invoices, for example via a portal or their accounting package.
In summary
There is no single best form of e-invoicing. The right choice follows from four insights:
- which channels and formats your recipients require or accept;
- which legal requirements apply in the countries where you invoice;
- which solution suits your software, volume and ambition;
- what you want to and can invest in it.
Bear in mind that you sometimes cannot avoid using multiple channels at the same time, for example Peppol for governments, the network of a large buyer and a national platform abroad. A solution that supports multiple channels saves you from having to set up a new arrangement for each buyer. Curious about the cost side? Read What does e-invoicing via Peppol cost, or compare providers on Peppol.now.
