Peppol for Beginners: E-Invoicing Simply Explained

What Is Peppol? A Plain-Language Explanation

If you have been hearing about Peppol and e-invoicing but feel overwhelmed by the technical jargon, you are not alone. Many business owners, especially those running small and medium-sized enterprises in Germany, find the topic confusing. This guide explains everything in plain, simple language.

Peppol stands for Pan-European Public Procurement Online. Despite the name, it is no longer limited to public procurement. Peppol is a network for exchanging business documents electronically, most commonly invoices. Think of it as a postal system for digital business documents.

Just like email allows you to send messages to anyone with an email address regardless of whether they use Gmail, Outlook, or another provider, Peppol allows you to send invoices to any business on the Peppol network regardless of which software they use.

How Does Peppol Work?

The Peppol network operates through a system of access points. Here is how it works, step by step:

1. Registration: Your business registers on the Peppol network and receives a unique Peppol ID (usually based on your VAT number)
2. Access point: You connect to the network through an access point provider (like Peppol Box). This is your gateway to the network.
3. Sending: When you send an invoice, your access point delivers it to the recipient's access point
4. Receiving: When someone sends you an invoice, it arrives in your inbox through your access point

The beauty of the system is that you do not need to know which software your trading partner uses. As long as they are on the Peppol network, the invoice arrives automatically.

What Is an E-Invoice?

An e-invoice (E-Rechnung) is not simply a PDF sent by email. It is a structured electronic document that can be read and processed automatically by software.

Think of the difference this way:

• A PDF invoice is like a photograph of an invoice. A human can read it, but a computer sees it as an image and cannot extract the data without special processing.
• An e-invoice is like a spreadsheet. The computer can immediately read every field: invoice number, date, amounts, VAT, payment details, and line items.

In the country, the two main e-invoice formats are XRechnung (pure data, no visual representation) and ZUGFeRD (a PDF with embedded data). Both comply with the European standard EN 16931.

Why Is Peppol Important for Your Business?

Since January 1, 2025, all B2B businesses here must be able to receive e-invoices. This is mandated by the Wachstumschancengesetz (Growth Opportunities Act). The obligation to send e-invoices follows in 2027 for larger businesses and 2028 for all businesses.

Peppol provides the most practical way to handle this obligation because:

• Universal compatibility: One connection reaches thousands of businesses across Europe
• Automatic delivery: No need to manage email addresses or file transfers for each trading partner
• Standardized format: Every invoice follows the same structure, simplifying processing
• Secure transmission: The Peppol network uses encryption and authentication
• European reach: As your business grows, Peppol connects you to partners across the EU

Common Myths About Peppol

Myth: Peppol is only for large companies

Reality: Peppol is designed for businesses of all sizes. Small businesses, freelancers, and sole proprietors can all join the network. In fact, small businesses often benefit the most from the automation Peppol provides, as they have fewer resources for manual invoice processing.

Myth: You need technical expertise

Reality: With a platform like Peppol Box, joining the Peppol network is as simple as creating an email account. You do not need any technical knowledge, programming skills, or IT infrastructure. The platform handles all the technical complexity behind the scenes.

Myth: Peppol is expensive

Reality: Peppol Box starts at €5/month. When you consider the time saved on manual invoice processing, postage costs eliminated, and errors prevented, the investment pays for itself quickly.

Myth: Peppol replaces your accounting software

Reality: Peppol is a delivery network, not accounting software. It works alongside your existing tools. You continue using your preferred accounting program, and Peppol handles the invoice exchange. With Flexina Sync, your accountant automatically retrieves your invoices from Peppol Box — free of charge and with no effort on your part.

Getting Started with Peppol: A Simple Checklist

1. Choose an access point provider: Select a Peppol-certified platform like Peppol Box
2. Register your business: Provide your company name, VAT number, and basic details
3. Receive your Peppol ID: This unique identifier is how other businesses find you on the network
4. Share your Peppol ID: Let your suppliers and customers know you can receive e-invoices via Peppol
5. Start receiving: Incoming e-invoices will appear in your inbox automatically
6. Connect your accountant: Use Flexina Sync to forward invoices to your tax advisor

The entire process takes less than 5 minutes. There is no hardware to install, no software to configure, and no training required.

Why Peppol Box Is Ideal for Beginners

Peppol Box was designed with simplicity as its core principle. If you can use email, you can use Peppol Box:

• Inbox interface: Invoices appear like emails in an inbox. Click to open, view details, download, or forward.
• No jargon: The interface uses plain language, not accounting terminology
• Guided setup: Step-by-step instructions walk you through every feature
• Support in your language: Help available in German and English
• Mobile apps: Manage invoices on your iPhone or Android device