How does your e-invoice reach your customer on the Peppol network?
How e-invoices are sent and received differs to traditional processes — businesses would either print an invoice and post it to the customer, or download from their ERP system or billing software and send via email as a PDF.
But how does an e-invoice — an invoice that has structured and therefore machine-readable data — reach the customer or trading partner? The answer is via a global network, such as Peppol.
Peppol has a common delivery framework and address book process allowing dynamic discovery. It enables trading partners to exchange standards-based e-invoices and credit notes based on a four-corner model, consisting of a supplier sending an invoice, its customer receiving the invoice, and their respective certified service providers who send and receive the invoices on their behalf.
Creates invoice in ERP system and sends to C2
Receives invoice data from C1, converts to relevant format and sends e-invoice to C3
Receives e-invoice from C2 and sends e-invoice to C4
Receives e-invoice from C3
How the address book works
All businesses and organisations using Peppol publish their delivery address and the types of e-documents they’re able to receive via a Service Metadata Publisher (SMP), which acts as a business registry and address book. Peppol has a central address book called the Peppol Service Metadata Locator (SML). This SML is able to look up the relevant SMP for each customer to find out the delivery details so that an e-invoice can be sent to the right address. This is a similar approach to how websites are found based on domain names. Therefore, when a business sends an e-invoice using the Peppol network, it must send the unique Peppol ID number for each customer, which will ultimately ensure the e-invoice is received by the recipient.
What data is needed?
The customer’s unique Peppol ID number is driven by two pieces of data; the Electronic Address Scheme code (which typically defines the country of the recipient and the type of identification number used in that country), and the relevant identification or tax number of the recipient. Some businesses and organisations may share their exact Peppol ID number with their suppliers and vendors. Some businesses will also search the Peppol Directory to see if their customer is listed and to retrieve the address. This exercise can often be carried out on an entire customer or vendor master data as a professional service when a business first implements e-invoicing using Peppol. Businesses can prepare by making sure they hold the relevant identification number for the customer or trading partner in their customer master data file.
Electronic Address Schemes (EAS)
Some examples of EAS codes include:
Bosnia and Herzegovina
Japan is the latest country to have a unique EAS code (0188). The customer identification number for identifying companies on the Peppol network is the Corporate Number issued by Japan’s National Tax Agency (国税庁). Japan will implement a new Qualified Tax Invoices system for Japanese Consumption Tax (JCT) with effect October 1, 2023. To complement and support this, the country is also implementing Peppol e-invoicing (under the new JP PINT standard), and Japanese businesses will be able to exchange complaint e-Qualified Tax Invoices over the Peppol network.
Avalara is an OpenPeppol member and a certified Peppol service provider in Europe, Australia, New Zealand, and Japan. Avalara’s e-invoicing solution can help companies stay compliant in over 60 countries and uses the Peppol network to issue and receive e-invoices.
Contact Avalara to discuss how we can help you comply with upcoming e-invoicing mandates or connect you to the Peppol network.
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