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International e-invoicing? Australia, New Zealand and Singapore have joined PEPPOL!

Interoperable international e-invoicing is about to become reality due to the new PEPPOL International Invoicing Standard.

PEPPOL is not only ensuring a compliant and interoperable B2G invoicing application but also a B2B invoicing application. Moreover, they are currently moving towards an international e-invoicing model allowing to exchange invoices outside the EU.

It is common knowledge that exchanging e-invoices, which can be automatically processed, leads to making real savings to the extent that no large investments are needed in order to be able to communicate with your suppliers/customers. The processing cost of AP (purchase) invoices can be reduced automatically. Instead of outsourcing AP, AP can be automated! Sending a pdf over the internet is not leading to the big savings.

For sure, the first requirement is the interoperability. The receiver must recognize the invoice sent by the supplier without too much hassle. And this is what PEPPOL is enabling.

If there are enough parameters contained in the file exchanged, then you can really automate. Think of e.g. the goods or services you buy. If the exchanged file would contain the CN code for goods or CPA code for services, then, you can even look up the VAT rate immediately when processing your purchase. (see my post on LinkedIn) This may be very interesting information where the purchase of goods is an intra-community acquisition or a purchase of services acquired from abroad. It would be good for PEPPOL to make this distinction. What is included for the moment in the e-invoice file is a field that indicates e.g. it is about an intra-community supply, unfortunately without specifying whether it is about goods or services. Should it also be mentioning goods or services, because, as a purchaser your reporting obligations are different, then you could process these invoices automatically against the purchase order. These are the real savings to be envisaged.

I sincerely hope that this PEPPOL standard for international invoicing will really be used beyond the EU, Australia, New Zealand and Singapore. If well adopted in those countries, why shouldn’t other countries jump on the train? Business can influence this, simply by starting to use the standard for exchanging their e-invoices, the more it is used, the more countries will be motivated to join.

More info on PEPPOL here.

Contribution by: Isabelle Desmeytere
VAT Technology Implementation Consultant – VAT Interim Management – VAT Software Developer

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