The abbreviation PEPPOL has been haunting the e-invoicing landscape since 2008. Almost everyone involved in electronic document exchange knows roughly what it means. But often only approximately. We have therefore summarized the most important information about the European network for digital public procurement in the public sector in a brief overview.

First things first: PEPPOL stands for “Pan-European Public Procurement OnLine”. It describes an international network that enables the electronic exchange of standardized transaction documents such as invoices and orders. And it does so via a secure and interoperable network. It was originally developed to simplify and standardize public procurement - i.e. tenders in the public procurement process - within the European Union. However, it is now used worldwide by companies and organizations in various sectors.

Sending electronic invoices via the PEPPOL network? Particularly fast, secure and simple!

PEPPOL is part of the European Commission's Competitiveness and Innovation Framework Programme's ICT Policy Support Programme (CIP) and consists of a consortium of 17 project partners from eleven European countries (Austria, Denmark, Finland, France, Germany, Greece, Italy, Norway, Portugal, Sweden and the United Kingdom).

At the heart of PEPPOL is its standardized set of document formats and transmission protocols, which enable participants to exchange business documents electronically and automatically. Regardless of the individual IT systems they use. By using PEPPOL, companies and organizations can make their business processes more efficient, reduce errors and shorten document processing times.

In practice, the exchange of e-invoices via PEPPOL is very simple: 

1. An invoice issuer (e.g. a supplier) transmits its electronic invoice via an access point (PEPPOL Access Point), which identifies the corresponding receiving access point of the invoice recipient via the PEPPOL Participant ID.
2. Once the electronic invoice has been received at the recipient's access point, it is made available to the recipient (client).

In Germany, the public platforms for electronic invoice receipt, ZRE (for invoices to the direct federal administration) and OZG-RE (for invoices to the indirect federal administration, incidentally provided by TRAFFIQX provider Bundesdruckerei), are connected to the recipient's access point, typically authorities and federal administrative institutions. Within these platforms, the Leitweg-ID serves as a specific means of addressing for the authorities and institutions.

A supplier who has stored their customer's PEPPOL Participant ID in the relevant platform and activated the transmission channel is able to send their electronic invoices to the invoice receipt portals via PEPPOL. The connected authorities and institutions can then retrieve these invoices from the platform via PEPPOL and process them accordingly in their systems. It sounds complicated, but it is technically very simple. The TRAFFIQX® network is a PEPPOL AP that can be used for exactly this purpose: B2G and B2B as receiver and sender.

Who uses PEPPOL for the digital exchange of documents?

PEPPOL is used by a wide range of organizations and companies. These include countless governments and public institutions across Europe. But even beyond that, government institutions have prescribed or recommended PEPPOL for electronic procurement and invoicing. There are also companies that supply products or services to public institutions. They use PEPPOL to transmit their invoices and other business documents electronically. Many large companies from the private sector are now also using the tried and tested PEPPOL network to simplify and standardize the exchange of documents with their suppliers and customers.

Even in the small and medium-sized enterprise (SME) sector, more and more companies are now benefiting from the efficiency gains and cost savings offered by PEPPOL. Especially when they do business with the public sector. 

What advantages does PEPPOL offer a “normal” company?

The use of PEPPOL offers a number of advantages. These include increased efficiency, as companies can save time and resources by automating the exchange of documents. This would otherwise have to be spent on manual processes. But PEPPOL is also impressive in terms of cost savings. The electronic exchange of invoices (“eInvoicing”) means less paperwork. And faster processing of business documents leads to lower operating costs. Automated processes also reduce the risk of errors that can occur when data is entered manually. Last but not least, PEPPOL offers a high level of security and confidentiality for the exchange of sensitive business information.

Global instead of local? The PEPPOL network can do both!

One of the main features of PEPPOL is its international compatibility. PEPPOL enables companies to communicate and do business with international partners without having to worry about different standards and protocols. This creates access to new markets in addition to international business operations. The ability to use PEPPOL can open doors to new business opportunities for companies, especially in the public sector.

PEPPOL is a powerful platform that simplifies the electronic exchange of business documents across borders and systems. It offers significant benefits to businesses and public institutions in terms of efficiency gains, cost savings, improved accuracy and secure data exchange. With its growing acceptance and use, PEPPOL provides a solid foundation for the digitization of business processes worldwide, making it an important tool for companies that want to remain competitive in today's connected economy.

PEPPOL, XRechnung and ZUGFeRD - do they even go together?

In addition to PEPPOL, there are also some “standard formats” in connection with eInvoicing that must be mentioned - especially in the German context. We would like to point out that PEPPOL eInvoices are characterized by their suitability for companies that value flexibility and automation. PEPPOL is a good choice because it allows invoices to be processed in various formats and is recognized by public administrations throughout Europe. As this format is required and accepted throughout Europe in the public sector, there is no need to worry about compatibility issues, which in turn reduces the cost of transmitting and processing invoices.

What about PEPPOL and invoices in ZUGeRD format?

For companies that focus primarily on the (German) B2B market, the “Central User Guide of the German Electronic Invoicing Forum” - ZUGFeRD for short - has also been a popular choice as a format for several years. This is because ZUGFeRD invoices consist of a visual part in PDF format in addition to the typical invoice data record. This facilitates (manual) processing by companies that may use different or no special software, are not yet as digitized or simply want to “see” what invoices are coming in. The hybrid invoice format enables a flexible application for invoicing various B2B customers and offers the advantage that invoices with more extensive information requirements can also be sent - even (still) by email if necessary. Another argument in favor of the hybrid format is the structural (XML) part of the ZUGFeRD, as this can be automatically processed by ERP and merchandise management systems.

What about PEPPOL and electronic invoices in XRECHNUNG format?

The XRechnung format, on the other hand, corresponds exactly to the EU specifications and represents the recognized national standard in Germany, which meets the specific needs of the public sector in Germany. It is therefore particularly suitable for invoices to public sector clients. A very practical hurdle for use by smaller and previously less digitized B2B invoice issuers and recipients: XRechnung invoices (unlike ZUGFeRD invoices) consist exclusively of an XML file. Specific tools are therefore required to process an XRechnung. This could prompt some companies to opt for alternative formats. Despite this limitation, XRechnung is important for supporting the automated processing of invoices, resulting in faster payments to service providers and customers in the public sector.

How invoice exchange via PEPPOL works

And what does this look like in practice? Sending via PEPPOL (Pan-European Public Procurement On-Line) follows a standardized process that enables the secure and interoperable exchange of business documents between different organizations. This process is facilitated by the PEPPOL network, which is based on a set of technical specifications and protocols. A key feature of PEPPOL is the use of the so-called 4-corner model, in which the actual electronic invoice exchange is not handled directly between the invoice issuer and recipient, but via two separate access points (the PEPPOL Access Points already mentioned several times or the corresponding eService providers of the sender and recipient).

And what is the procedure?

Identification and delivery: Each organization in the PEPPOL network is identified by a unique participant identifier (PEPPOL Participant Identifier). When a document is sent, the sender's access point uses this identification to find the correct recipient in the network and deliver the document accordingly.

• Standardization: The use of standardized formats and protocols enables the smooth and automated exchange of electronic documents with companies, authorities and other senders/recipients, regardless of the individual IT systems of the parties involved.
• Security and compliance: PEPPOL sets strict security requirements, including encryption of data transmissions and authentication of network participants, to ensure the confidentiality and integrity of the information exchanged.

By using the PEPPOL network, organizations can exchange documents with a large number of business partners in an efficient, secure and standardized manner, which considerably simplifies and accelerates business processes.

About the Autor

Uwe Gibis is Product and Interoperability Manager at the TRAFFIQX ® network. Since 2020, his expertise in requirements management for B2B and B2G interoperability has contributed significantly to the optimization of TRAFFIQX®'s network-wide service offerings. With his in-depth experience in e-invoicing, ERP, recruitment and CRM systems as well as his passion for the digitalization and automation of business processes, he sees himself as part of the front line of the digital revolution. Gibis is also active in key industry associations and keeps himself technically up to date through continuous training.