E-invoicing decoded
5 indispensable terms
No one can ignore the rise of e-invoicing; a major revolution that transforms the way companies send, receive, process and store invoices. E-invoicing not only ensures security, but also efficiency and clarity. However, the terminology and ongoing developments can quickly become complicated.
Key concepts of e-invoicing
- E-invoicing:
Electronically sending, receiving, processing and storing invoices between companies in a secure network such as PEPPOL. This means that your billing data is no longer stuck in paper documents or as PDF attachments by email but is transferred effortlessly via standardised formats such as XML or UBL. It is crucial to emphasise these standardised formats because although sending an invoice via email or in PDF format is done electronically, it is not considered e-invoicing. After all, this non-structured classification cannot be processed automatically by either the customer or the government.
- XML (Extensible Markup Language):
The standard file format of an electronic invoice. It can be compared to a VAT return file, which ensures a uniform and structured data transfer.
- UBL (Universal Business Language):
The structured format in an XML file with all the information of a manual invoice. UBL standardises business documents such as invoices, making automatic processing possible.
- E-reporting:
The process of electronically submitting tax-related information to the tax authorities. It is often a supplement to e-invoicing and obliges companies to pass on (part of) the data relating to their AP/AR invoicing at transactional level to the tax authorities within a limited time.
- PEPPOL (Pan-European Public Procurement Online):
A secure international e-invoicing network that connects companies and governments. When we talk about PEPPOL, we inevitably also hear the concepts of interoperability and the 4-corner model.
Interoperability ensures that different systems and companies around the world, regardless of their location, currency or ERP or accounting software used, can communicate seamlessly with each other. This interoperability is in turn facilitated by (PEPPOL) access points, which we explain below.
4-corner model: This model supports the issuance, exchange and receipt of e-invoices via four parties:
- Corner 1 (C1): Invoice sender sends the e-invoice to their PEPPOL Access Point.
- Corner 2 (C2): The sender's PEPPOL Access Point forwards the e-invoice to the recipient's PEPPOL Access Point.
- Corner 3 (C3): The recipient's PEPPOL Access Point forwards the e-invoice to the recipient.
- Corner 4 (C4): Invoice recipient receives the e-invoice from their PEPPOL Access Point.
An important aspect of this model is the PEPPOL Access Point. These facilitators ensure the safe and reliable exchange of electronic documents within the PEPPOL network. All companies registered on PEPPOL have gone through a "Know Your Customer" (KYC) procedure. This increases the security and reliability of transactions.
Importance of these concepts
We all know by now that e-invoicing will be mandatory in Belgium as of 1/1/2026. The legislator will focus on this again in the coming weeks and months to further develop the details of the Regulations. However, nothing prevents you from getting started now, as e-invoicing significantly improves the efficiency and accuracy of your financial processes. This leads to cost savings and reduces administrative burdens. Understanding these terms can help you navigate the e-invoicing landscape and make the right decisions for your business.
Conclusion
E-invoicing seems simple at first glance, but there are many aspects to consider. It is essential to start preparing for this important change in a timely manner and analyse the impact on your existing processes and systems.
This article also focuses on the Belgian e-invoicing rules. Please note that in the complex e-invoicing landscape, other types of mandates apply in other countries (e.g. France, Poland, Germany, etc.).