About the Peppol framework
PeppolExternal Link is an international eProcurement framework. It's developed and maintained by OpenPeppol, an international non-profit association. The Peppol network and document specifications standardise the way business information is structured and exchanged.
Peppol uses a 4-corner model to exchange procurement documents and data. It transmits these through an open and secure network of accredited Peppol service providers called access points.
The 4-corner model
Stages in the 4-corner model include (see the flowchart below):
- Corner 1: The supplier creates the eInvoice in their business software.
- Corner 2: The supplier's access point validates and sends the eInvoice. The address is retrieved using address lookup. The eInvoice travels via the secure Peppol network.
- Corner 3: The buyer's access point receives and validates the eInvoice.
- Corner 4: The buyer receives the eInvoice in their business software.
Peppol service providers
Access points connect businesses to the Peppol network and allow the exchange of invoices and other documents with others on the network. Another type of Peppol service provider known as service metadata publishers (SMPs) ensure the addresses and capabilities of businesses on the network can be looked up. Most, but not all access points are also SMPs.
If you are interested in becoming an accredited Peppol service provider in Australia visit our software developers websiteExternal Link.
Peppol's origins and growth
Peppol began more than 10 years ago and is used mainly in Europe, where OpenPeppol is based – it is core to the European Union's VAT in the Digital Age (ViDA)External Link initiative.
Its use is growingExternal Link with more than 3.5 million businesses across more than 100 countries now registered on the Peppol network. It's increasingly being seen across Asia and the Pacific region with Singapore, Malaysia, Taiwan and Japan having joined Australia and New Zealand who adopted the Peppol framework in tandem in 2019.
Peppol in Australia
OpenPeppol gives authority to various countries to manage Peppol within their borders – over 50 countries are members of OpenPeppol. The Australian Government nominated the ATO to be the Australian Peppol AuthorityExternal Link. In this role, we:
- define Australian requirements for use of the Peppol standards – for example, the Australian-New Zealand invoice specification supports GST and ensures eInvoices are valid tax invoices
- administer accreditation of Peppol service providers for Australia
- educate, promote and support the adoption of Peppol across government and the business community
- work with digital service and software providers, and the business community to ensure Peppol is suitable and implemented consistently across Australia.
The ATO does not receive a copy of eInvoices – we are not able to view the contents of any eInvoices being transmitted between businesses.
Connecting to the Peppol network
To use eInvoicing, your business and your trading partners need to connect to the Peppol network.
Many of the commonly used small business accounting packages already offer eInvoicing. You may be connected as part of your existing subscription or if not, then registering to use Peppol is quick and easy. To find out more see Getting started with eInvoicing for small business.
Medium and large businesses may also have pathways within their software. To select the right option for your business, see Getting started with eInvoicing for medium and large businesses.
The Peppol Directory can help you find which of your trading partners are ready to receive eInvoices from you. Some software products have automated this process. To find out more read Identifying Australian businesses on the Peppol network.
Peppol and electronic data interchange
Businesses have exchanged electronic documents such as invoices for decades through different channels, including:
- electronic data interchange (EDI)
- data entry portals
- data file transfers.
These systems are efficient and streamline the buying process, but they aren't universal (they use 3-corner models not 4) and are usually proprietary. This means suppliers must connect to multiple systems used by different buyers, creating inefficiencies and trade barriers.
The Peppol framework complements EDI and other channels and represents a common global standard for exchanging digital business documents. This helps businesses that transact with trading partners through multiple EDI networks, to avoid multiple connections and associated high costs.