With more and more governments worldwide mandating the use of e-invoicing for transactions involving public bodies, the use of Peppol is growing rapidly among supply chain businesses. As an ever-growing number of companies become Peppol-enabled, Peppol in turn grows increasingly attractive for those businesses not yet connected.
In this article we’ll answer some of the most commonly asked questions surrounding Peppol, how it works, and how it can benefit you.
Peppol basics
What is Peppol?
Peppol, which stands for Pan-European Public Procurement Online, is not an e-procurement platform. Rather Peppol provides the methodology and technical specifications as well as an agreement framework to send documents between e-procurement partners.
In short, Peppol makes it easier for businesses and public authorities to exchange electronic documents such as invoices and purchase orders in a standardised and secure way. It’s especially helpful for cross-border transactions, as it ensures documents are compliant with local regulations and can be processed quickly.
Why is Peppol popular?
Although theoretically governments could use any common communication protocol, such as SFTP, X.400 or AS2, this would require government bodies to support each one, which would involve significantly more work and increase the likelihood of errors occurring. Peppol solves this problem by offering a single, consistent framework.
Compared to document exchange via traditional EDI channels, Peppol also offers faster connections, reduced partner connection costs, increased message reliability and an all round simpler process for everyone involved.
Given these significant benefits, it’s hardly surprising that Peppol’s usage has grown steadily over the past decade. Today Peppol is not only used across the vast majority of European countries but further afield as well, with countries such as Australia, Canada, New Zealand, Singapore, the USA, Japan among others all now placing their trust in Peppol.
What are the three pillars of Peppol?
Ultimately, what Peppol provides can be boiled down to three factors, which are known as the three pillars of Peppol. These are…
- The Peppol network
- Peppol’s document specifications
- Peppol’s agreement framework
For more information on each of these pillars, please see the following three sections.
What’s required to connect to the Peppol network?
In simple terms, all a business needs to be able to connect to Peppol (in addition to the capability to send and receive automated messages) is a connection to a certified Peppol Access Point, such as ecosio.
Whereas before Peppol, trading with partners may have required connections to several service providers, with Peppol this is not the case. To ensure exchanging key B2B data with partners is as simple and cost-effective as possible, Peppol uses a four corner connection model. Unlike two and three-corner models, this model means that a single connection to a Peppol access point is sufficient to exchange automated documents with any other Peppol-enabled companies.
The two-corner model
Also known as point-to-point transmission, the two corner model requires time-consuming set-up and is usually handled by inhouse IT teams. Due to the high maintenance effort and setup time this model does not scale well. As connections are not reusable for multiple partners, each partner needs a new setup.
The three-corner model
In this model message routing is done via a central hub offered by a service provider. The main downside is lack of flexibility, as both sender and receiver must have the same service provider, meaning it is badly suited to large supply chains such as those for which Peppol was created. In addition there is a ‘lock-in’ effect in regard to the service provider – i.e. one of the parties is usually forced into a contract with the service provider of the buyer or the seller (depending on the market dominance of the party).
The four corner model
This has several advantages over the two corner and the three corner transmission models. Unlike them, the four corner model offers simplicity and flexibility, allowing for quick and cost-effective connections to partners. To exchange information, sender and receiver aren’t required to set up unique point-to-point connections or use the same service provider.
Once a connection to an access point has been established, the Peppol Participant ID is sufficient to send an electronic message to any Peppol partner of choice. Vice versa, after connecting to Peppol a company can be reached by any other Peppol sender.
What are Peppol’s document specifications?
When it comes to the formatting of documents exchanged between Peppol Access Points, all messages must conform to Peppol Business Interoperability Specifications 3.0 (known as Peppol BIS). The Peppol Code list provides standards for >100 message types (most of which are Peppol BIS). Peppol also allows custom document types within a country, if these are officially acknowledged.
This way each access point only needs to be able to process these approved messages. Consequently, systems connected to the Peppol access point only need to convert from the BIS format to the inhouse format and vice versa. Thus, once the mapping is set up, it is valid for all business partners. This is much simpler than building custom mappings for each partner connection.
What are Peppol’s Transport Infrastructure Agreements (TIAs)?
Finally, the existence of Transport Infrastructure Agreements (or TIAs) ensures that all parties conform to the necessary Peppol regulations This protects the reliability of document exchange via Peppol. Peppol Authorities, Peppol Access Point providers and Peppol Service Metadata Publisher providers must all sign these agreements.
Peppol Access Points
What is a Peppol Access Point?
A Peppol Access Point is a software, offered or owned by a company, that can connect others to the Peppol network and exchange documents via the required standards/protocols and in accordance with the necessary regulations.
Why do you need a Peppol Access Point?
Apart from becoming a Peppol Access Point yourself (which involves several complex steps), connecting to a Peppol Access Point provider is the only way to get an officially registered Peppol ID, which all Peppol participants must have in order to experience Peppol’s benefits. Without an Access Point and a Peppol ID, exchanging automated documents with your business partners via Peppol’s international e-invoicing network is impossible.
Isn’t it easier to set up an EDI connection to my partner directly?
In short, no. As we explore in more detail in our introductory video on Peppol, Peppol hugely simplifies automated document exchange for connected companies. Instead of requiring you or your provider to build an EDI (electronic data interchange) connection to your partner from scratch, Peppol utilises a four corner model and enforces the use of specific standards and protocols, meaning there is less work required for each connection. This makes partner onboarding via Peppol faster and more scalable than via classic EDI.
How do I find a Peppol Access Point?
You’ve already found one! At ecosio we are e-invoicing and Peppol experts and can help you get connected to Peppol in no time.
A full list of all certified Peppol Access Points can also be found on the Peppol website.
How do Access Points differ from one another?
Although all Peppol Access Points will enable you to connect to Peppol, not all Access Points offer the same service. For example, the level of help provided by Access Points with regard to setting up new mappings and monitoring messages etc. varies wildly from one provider to the next. Further, some Access Points may be faster than others to adapt when Peppol introduces new technical requirements, such as the recent move from AS2 to AS4.
Different Access Points are also governed by different Peppol Authorities across the globe. While all are able to connect you to Peppol, it makes sense to select an Access Point that operates in the same geographical area to you.
Perhaps most significantly, however, very few Peppol access points provide APIs (Application Programming Interfaces) to help their customers achieve the best possible connection to their partners…
What are the benefits of connecting to Peppol via API?
Peppol as a whole has been developed to streamline B2G and eventually also B2B transactions. Conducting Peppol with the help of an API connection simply takes this streamlining to the next level (just as an API connection is able to boost the efficiency of traditional EDI).
An API basically specifies how different applications shall interact with each other, by defining the exchange format, exchange protocol, security requirements, etc. Thereby, APIs can help businesses connect their own internal IT landscape to other third party services. While Peppol perfectly solves the interoperability challenge between heterogeneous B2B networks by introducing a common exchange infrastructure, it does not define the “last mile”. As in telecommunications the last mile refers to the connection piece between the network hub and the end user’s system (e.g. the telephone).
In case of Peppol the network hub is the Peppol access point and the end user’s system is the ERP system of the company. The ERP system is usually the main system, where invoices, orders, despatch advices etc. are being created and consumed. If a Peppol access point provider offers a dedicated API, the ERP system can be seamlessly connected to the access point.
Using such an API for Peppol transactions comes with a number of significant advantages for the customer, including:
End-to-end message monitoring
With an API connection, Peppol can be seamlessly integrated in your ERP system. This enables users to see the delivery status of messages from within their existing user interface, eliminating the need to log into independent external software to check that a partner has acknowledged a message.
Accurate delivery/fetching of messages
Once connected to your Peppol access point via API, requests can be set up at regular intervals to check for new messages. Alternatively, new messages can be transferred proactively from the Peppol access point to the recipient.
Full text search
Thanks to the depth of the integration provided by the API, messages can even be searched directly in the ERP system. For example, users could locate invoice messages by inputting any relevant invoice data such as article number, reference to the underlying despatch advice, etc.
Error handling
Unlike with traditional protocols such as SFTP, where it can be difficult to ascertain where and why sending failed, thanks to the unparallelled data visibility achieved with an API connection, users can immediately see where the issue occurred and what should be done to resolve it.
How long does connecting to Peppol take?
Once you’ve chosen your preferred Access Point (something that should not be rushed), the actual connection process is fast and simple. Your provider will register a unique Peppol ID for you, whereby existing IDs such as VAT-ID or Global Location Numbers can be reused.. After this you will be able to start connecting to other Peppol-enabled partners and exchanging structured invoices etc.
Peppol in SAP systems
Is an SAP Peppol connection easy to achieve?
While achieving an SAP Peppol connection is very possible, its complexity depends on your chosen integration method. The simplest way to achieve an SAP Peppol connection is to opt for a managed service provider that will handle everything from technical setup to message monitoring and error resolution once the connection is live.
How does ecosio achieve SAP Peppol connectivity?
The illustration below shows a connection between an SAP System and Peppol with the help of ecosio. ecosio is a certified Peppol Access Point Provider and can therefore send and receive documents to and from the Peppol network.
The connection between the SAP system and ecosio occurs thanks to the EPO Connector. The EPO Connector is a middleware solution for SAP and entirely programmed in ABAP. The solution is SAP certified for all SAP versions from 4.6 and is thereby also compatible with S/4HANA. IDoc documents can be sent and received through the EPO Connector to the ecosio MessagingHub. For example, one can use INVOIC02 IDocs for e-invoices.
Should an SAP middleware such as SAP PI or SAP PO be the current solution, those components can also be used to connect to the ecosio MessagingHub. Additionally, SFTP solutions can be used for the connection as well. The SFTP server can either be hosted by ecosio or by the company.
After receiving the IDocs, ecosio will determine the sender, receiver and document type, and will convert the message to the correct target format, to finally transmit it to the receiver. If Peppol is in use, the delivery to the receiver’s Peppol Access Point will take place via the PEPPOL network, e.g. to German authorities or a company, which uses Peppol.
This allows for e-invoices to be sent via Peppol straight from SAP and be compliant with the XRechnung standard.
The communication is also possible the other way. For example, purchase orders can also be received over the Peppol network.
Why should you consider ecosio as your Peppol Access Point provider?
ecosio is one of a limited number of certified Peppol Access Point providers that offers Peppol connectivity as part of a comprehensive full service package.
With a single connection to ecosio, your business can trade all relevant e-documents with hundreds of thousands of connected companies and public institutions worldwide. What’s more, as we are able to handle all EDI and e-invoicing tasks for you, from set-up right through to ongoing operation, you don’t need any in-house expertise to benefit from the savings associated with automated B2B document exchange.
To find out more, get in touch today!
Are you aware of our free XML/Peppol document validator?
To help those in need of a simple and easy way to validate formats and file types, from CII (Cross-Industry Invoice) to UBL, we’ve created a free online validator.
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