Description
e-invoicing refers to the use of standardised electronic documents for the exchange of invoice information between trading partners in a supply chain. It allows businesses to efficiently generate and track electronic bills (e-bills) in real-time, reducing fraud and minimising data entry errors. However, it also introduces challenges such as compliance with rapidly changing regulations, cross-border issues, data heterogeneity, and error identification in complex systems. Its popularity has been rising thanks to e-invoicing mandates around the world and initiatives such as EU’s ViDA initiative. To implement e-invoicing many companies need to ensure upstream processes and systems are compliance-ready, identify and prepare for upcoming e-invoicing obligations and develop a comprehensive e-invoicing strategy & invest in scalable technology solutions.
Traditionally, e-invoicing has been supported by Electronic Data Interchange (EDI) systems, which have shown significant limitations. Despite the demand for flexible and reliable EDI solutions, decision-makers often lack awareness of the key differences between EDI systems. Most EDI solutions are on-premises, where an ERP system is connected to local converter software that handles mapping, adding signatures, routing, and monitoring messages. These on-premises systems typically require significant internal effort to maintain and cannot directly connect to partners without EDI capability or external networks like VANs and PEPPOL. As businesses’ partner networks grow, their internal EDI landscapes often become more complex, with teams managing multiple point-to-point connections and connections to other networks and platforms.
Cloud-based EDI solutions offer a more cost-effective and sustainable option by enabling firms to outsource the routing and mapping of messages to a provider. This provider then manages the exchange of messages with their partners, either directly or through their partner’s provider. Cloud-based EDI significantly simplifies internal processes and can connect to smaller suppliers who lack EDI capability. For companies, the most critical connection is between their ERP system and their provider—referred to as the “last mile”—as this affects data visibility and system usability. Connection options include AS2, OFTP2, SFTP/FTPS, and APIs.
Resources
A short video introduction to e-invoicing can be found here: Introduction to E-Invoicing.
FAQ
What is the connection between PEPPOL and UBL invoicing?
PEPPOL define a communication protocol for exchanging e-invoices and adopts UBL as the preferred data format to represent the content of these invoices.