E-invoicing is the exchange of invoices as structured data. An e-invoice has no visual layout, but a fixed, standardized structure. This allows software to read it directly, validate it automatically and process it without any intermediate step. The difference lies in the source: an e-invoice is created as data in the sender’s system and arrives as data at the recipient. A PDF that is converted to XML afterwards using OCR or AI is therefore not an e-invoice. In that case, the data is reconstructed from an image, with a risk of errors and a need for manual checks.
Below you can read what e-invoicing involves, how it works, which requirements governments impose and how to determine which solution suits your organization.
Standardized
Directly processable
Automatically verifiable
Basic concepts: what makes an invoice an e-invoice?
An e-invoice contains the same information as a paper invoice, such as supplier, buyer, invoice number, amounts and VAT. The difference lies in the form. The data is stored in fixed fields in a machine-readable file, usually XML.
A brief history
- In the late 1990s, large organizations were already exchanging invoices via EDI (Electronic Data Interchange). This worked well between established trading partners, but each connection was custom-built and therefore costly.
- Universal Business Language (UBL), developed within the standards organization OASIS, introduced an open and freely usable XML standard for business documents such as invoices.
- In 2014, Directive 2014/55/EU established that public authorities in the European Union must be able to receive and process e-invoices that comply with the European standard. That standard became EN 16931. This gave e-invoicing a common foundation across Europe.
How does e-invoicing work?
Why is a PDF not an e-invoice?
A PDF is a digital image of an invoice. People can read it, but software cannot do so out of the box. The recipient has to retype the data or extract it using OCR or AI. This is error-prone and requires checking. Even if you convert a PDF to XML this way, it remains a reconstruction of a document that was made for people. A structured e-invoice is data from the very start: every item of information sits in a fixed field, such as invoice number, VAT amount or IBAN, and software can process the file directly and without errors. In short: a PDF sent by email is digital, but it is not an e-invoice.
The benefits of e-invoicing
Automatic posting
Faster payment, better insight
Control over purchasing
Compliance with law and tendering
Auditable and accountable
Freed-up capacity
E-invoicing in the transaction chain
Order-to-Cash (O2C) and Purchase-to-Pay (P2P) are two sides of the same transaction: O2C views the chain from the seller's perspective, P2P from the buyer's. The e-invoice is the point where both chains meet. eProcurement is the digitalization of the purchasing process itself.
Order-to-Cash (O2C): the seller
From order received, through delivery and invoicing, to payment received. E-invoicing speeds up invoicing and therefore collection.
Purchase-to-Pay (P2P): the buyer
From purchasing need, through ordering and receipt, to payment. A structured invoice enables automatic matching with the order and delivery.
eProcurement: the digital purchasing process
Before the contract award, it is about gaining digital access to tenders and submitting bids. After the award, it is about digital ordering, delivery and invoicing. The term is particularly common among governments, because European procurement rules strongly govern the process there. Peppol also has its roots here: the name originally stood for Pan-European Public Procurement OnLine. E-invoicing is the digital final piece of eProcurement.
Legal aspects and compliance
Governments worldwide recognize the e-invoice as a fully-fledged invoice, subject to conditions. Almost everywhere, those conditions come down to three core requirements: authenticity of origin (it must be established who sent the invoice), integrity of content (the data must not have been altered unnoticed after transmission) and legibility (the invoice must remain legible and accessible throughout the entire retention period, for you and for the tax authority). These criteria are not country-specific. In the European Union they are laid down in the VAT Directive (Directive 2006/112/EC, as amended by Directive 2010/45/EU), which treats electronic and paper invoices equally. Countries outside the EU apply similar principles. What does differ per country is how you demonstrate compliance with the requirements, how long you retain invoices and whether e-invoicing is mandatory. A few examples:
| Country | How the tax authority implements it |
|---|---|
| Germany | Since 2025, businesses must be able to receive e-invoices. The structured part of the e-invoice must be retained unaltered in its original form. |
| Italy | All invoices must pass through the tax authority’s central platform SdI, otherwise they are deemed not to have been issued. The tax authority offers a free digital archiving service. |
| France | From 1 September 2026, all businesses must be able to receive e-invoices via a registered platform, with additional reporting to the tax authority (e-reporting). Smaller businesses must also send e-invoices themselves by 1 September 2027 at the latest. |
| Poland | Invoices pass through the national system KSeF. This has been mandatory in phases since 2026; the smallest businesses follow in 2027. Businesses no longer need to archive most invoices themselves. |
| Spain | With Veri*factu, the tax authority imposes requirements on the invoicing software itself: invoice data must be complete, traceable and unalterable. This becomes mandatory in 2027. |
In practice, a structured e-invoice sent via a trusted network meets these requirements more easily than a PDF sent by email. After all, origin and unaltered content are secured in the transmission process. Which countries mandate e-invoicing, and from when, is explained on Mandatory e-invoicing.
E-invoicing and Peppol: what is the difference?
E-invoicing is the phenomenon: exchanging invoices as structured data. E-invoicing says nothing about the route. An e-invoice can travel via Peppol, but also via a direct connection, EDI, a portal or a national platform such as SdI or KSeF. Peppol combines three layers:
- The network (transport layer): Access Points that deliver messages securely according to the Peppol architecture, with a central address lookup.
- The envelope: standardized addressing and routing information around each message.
- The letter: the content according to fixed specifications, such as Peppol BIS Billing, based on EN 16931.
Connecting via a Peppol Service Provider takes care of all three layers in one go, for all participants on the network. Want to know more? Read What is Peppol.
What this means for businesses
Which e-invoicing solution you need depends mainly on your own situation. These four questions will help you get started:
Do you already use accounting or ERP software?
If so, first check whether e-invoicing is built in. Often you only need to activate it. If not, an online accounting package with e-invoicing or a web portal is the logical first step.
Who are your customers and suppliers?
Do you supply to governments, or to customers in countries with a mandate (Belgium, Germany, France, Poland)? Then e-invoicing is not a choice but a requirement.
Do you only want to send, or also receive and post automatically?
The greatest benefit is often on the receiving side: invoices that are checked and posted without manual work.
How many invoices are involved?
For small numbers, a simple solution is sufficient. For large volumes, a full integration with your ERP system pays off.
For government organizations: receiving according to the European standard is the foundation. Those who also send e-invoices themselves, for example for rent, fees or recharges, show that e-invoicing is the norm. This increases support among suppliers and customers and prepares your organization for 1 July 2030. From that date, under ViDA, a digital reporting obligation based on e-invoicing applies to cross-border B2B transactions within the EU.
For software vendors: users expect e-invoicing to be included as standard in their software package. Support for UBL/EN 16931 and a connection to Peppol via a Peppol Service Provider thereby become a basic feature.
Not sure which route suits you? Compare Peppol Service Providers on peppol.nu by features, supported countries and integrations.
Compare SuppliersIn conclusion
E-invoicing is not about technology, but about what it delivers for your organization. You work more efficiently because invoices are processed and posted without manual work. You comply with legislation and tender requirements. And you gain better insight into your cash flows. The step does not have to be a big one: it often starts with a single setting in your existing software or a connection via a Peppol Service Provider. On peppol.nu you can compare the options clearly side by side.
