What is E-invoicing?
Electronic invoicing, also known as e-invoicing, is the process of sending and receiving invoices digitally in a standardized format. It replaces traditional paper invoices and email PDFs with fully automated workflows.
Brief History
E-invoicing found its origins in the late nineties as an innovative way to automate administrative processes between large companies. The introduction of standards such as UBL (Universal Business Language) provided more uniformity. Today, e-invoicing is supported by national and international regulations, with the European directive encouraging adoption since 2014. Through technological advancement and standardization across numerous sectors and countries, more and more organizations are being encouraged to adopt the standard and now have the opportunity to do so.
How Does E-invoicing Work?
E-invoicing is a standardized process where invoices are sent and received digitally. Unlike paper invoices or PDF files, e-invoices are processed in a specific format, such as UBL (Universal Business Language). This enables automatic processing by software, without the need for manual input.
The process begins with composing an electronic invoice in your accounting software. This invoice is sent via a secure network, such as the Peppol network, directly to the recipient without intermediary intervention. The recipient can process the invoice directly in their own system, ensuring fast and error-free handling.
What Does an E-invoice Look Like?
An e-invoice is essentially a reliable XML document. It consists of structured program code, where all information is placed in a fixed location. The special thing about an e-invoice is that it is software readable, can be processed automatically, and prevents errors. This allows your software package to process invoices automatically without manual input.
Why is an e-invoice not a PDF?
An e-invoice is fundamentally different from a PDF invoice. PDFs come worldwide in many different formats, depending on how the sender creates them. Reliably interpreting PDF invoices requires OCR software, which costs much more computing power and has lower reliability. A real e-invoice, on the other hand, contains standardized data in a fixed XML format, making automatic processing faster, cheaper, and more reliable.
Benefits of E-invoicing
Cost Savings
No more printing, sending, storing, archiving, or manually entering paper invoices.
Fast Processing
Electronic invoices are delivered directly and processed automatically.
Fewer Errors
Automated workflows minimize human errors.
Compliance
Comply with European regulations, including government organizations.
Sustainability
Contribute to a greener future with paperless invoices.
Reliability
Safe and traceable thanks to networks like Peppol.
E-invoicing in Transaction Chains
E-invoicing plays an essential role within various transaction chains that businesses and governments use:
Order-to-Cash (O2C)
From the perspective of the selling party, this covers the moment an order is placed until payment is received. E-invoicing streamlines this process by sending invoices faster and processing payments with fewer errors.
Purchase-to-Pay (P2P)
From the perspective of the purchasing party, this process covers all steps from ordering to payment. E-invoicing ensures more efficient purchasing processes and complete audit documentation.
E-procurement
This concerns the entirely digital sharing of invoicing after the complete process of electronic procurement, including tenders, contract management, and deliveries. E-invoicing is a core component here that ensures seamless integration between different systems.
E-invoicing and Tax Authorities
E-invoicing changes the way tax authorities operate, where it is established that electronic invoices have the same legal value as paper invoices. To comply with these legal requirements, e-invoices must meet the following criteria: authenticity of origin, integrity of content, and readability. This means that the sender must be clearly identifiable, the content may not be altered, and the invoice must be comprehensible to all parties involved.
Tax authorities view e-invoicing as an efficient way to process invoices quickly and validly. Because e-invoices are standardized and can be processed or imported directly from accounting systems, fewer errors occur and processes are faster. This also leads to more efficient audits and compliance with tax obligations.
E-invoicing and Peppol
Peppol has taken e-invoicing to a new level by providing a globally standardized network for the secure and efficient exchange of invoices. Instead of complex point-to-point connections, Peppol offers a single access to a network with millions of organizations. This makes sending invoices user-friendly across any country, but also cost-effective and reliable.
With Peppol, e-invoicing becomes fully automated, from sending to receiving, without businesses having to worry about technical compatibility or security. The network supports multiple standards, such as UBL, and validates that all legal requirements are met, such as those of the Dutch Tax Authority and European e-invoicing standards. This makes it the ideal solution for both national and international businesses.
What is the difference between E-invoicing and Peppol?
E-invoicing is a broader concept that encompasses the exchange of electronic invoices via all kinds of networks, including both open and closed systems. Peppol, on the other hand, is a specific open network that works according to European building blocks: standardized document formats (such as UBL), secure transport protocols (AS4), unique identification of organizations (such as Chamber of Commerce numbers), and certified access points. Peppol is used worldwide and offers an interoperable network where organizations can communicate via any Peppol access point with all other participants, regardless of their software supplier.
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Discover more about e-invoicing and Peppol through these official sources:
Peppol Organization
The official website of the international Peppol organization with all technical specifications and latest developments.
Visit Peppol.orgEuropean Commission
Official information about European e-invoicing directives and policy for digital procurement.
View EU DirectivesDutch Peppol Authority
The Dutch Peppol Authority provides local support and information about implementation in the Netherlands.
Go to NPaBelgian Peppol Authority
FOD BOSA is the Belgian Peppol Authority and provides support and certification for Belgian organizations.
Go to BOSA
