Having full control over your Procure-to-Pay (P2P) process is invaluable, and that includes keeping your suppliers informed about the status of their invoices every step of the way. After all, supplier-buyer relationships are key to keeping your supply chain up and running. Even more, the better and more sustainable these relations, the more resilient and prepared your organisation is for challenging business environments in the future. Read on to learn how you can improve supplier-buyer-relationships in practice with Basware and Peppol Invoice Response.
What is Peppol and why is it important?
The Peppol Network is a common global framework for the cross-border exchange of electronic business documents. This means that Peppol is not a platform on which business documents such as invoices are exchanged – it is a network that connects many existing platforms such as government platforms. Through this connection, the Peppol Network facilitates the exchange of business documents between various platforms. But even this description does not entirely do Peppol justice since it’s much more than a mere network; Peppol is an entire set of rules and technical specifications to harmonise electronic business document formats and transmission standards.
In short, Peppol is neither only an e-invoicing format nor an e-invoicing platform, it is the full package when it comes to seamless and efficient B2G and B2B connectivity. Ensuring this connectivity is a challenge for both buyers and suppliers alike, no matter the size of the organisation. Already now, there are many local invoicing and procurement requirements and specifications all around the world, and Peppol plays an important role in this regard. Many transnational organisations sooner or later encounter Peppol access as a requirement.
Peppol is also used in B2B connectivity and its importance here will grow over the years.
While Peppol is known to have a focus in Europe, it has in fact spread globally and is in active use in Australia, New Zealand, and Singapore with OpenPeppol members in 39 countries.
How does Peppol IRM help with better error and status handling?
The Peppol authorities continuously develop and improve the Peppol Network. One important example for this is the realisation of better error and status handling. In fact, with Peppol several mechanisms on error and status handling exist. And within this exact framework, Basware now has implemented the Peppol Invoice Response Message (IRM). But how does the IRM work in practice?
In a nutshell, the IRM is used to inform the invoice sender about the status or outcome of “Corner Four” of processing. As an example, and in the case of invoices, this could mean that the IRM could contain a rejection when the referenced purchase order number in the invoice was invalid.
When processing e-invoices, many such errors can occur simply because e-invoices can be technically incorrect. Even more, there are also scenarios where the invoice is technically in order, but the invoice does not comply with the recipient's rules. Think of errors, such as 'invoice not in accordance with order', 'supplier unknown', etc.
Without an error and status handling mechanism in Peppol, parties need to continue resolving exceptions and errors via email or telephone. This is a time consuming, manual, and error prone process. A reliable and secure error and status handling process ensures that errors can be handled efficiently and securely by end users, in their own software. In some cases, this can even be automated.
What are the benefits of Basware’s Peppol IRM to buyers and suppliers?
Benefits of Invoice Response to suppliers:
Real-time visibility on invoice statuses: by gaining information on whether an invoice is in due process, or whether that process has been disrupted, suppliers can immediately take the right course of action.
Improved cash-flow: by informing themselves on when their invoice has been approved or payment has been initiated, suppliers can manage their cash flows and monitor the reception of funds through payment channels.
Benefits of Invoice Response to buyers:
Improved supplier-buyer relationship: through automated information exchange on the invoice status, suppliers have a much-streamlined invoice verification process. This helps to reduce or eliminate the need for manual status inquiries, saving time and resources on both ends.
On a more technical note, here’s an overview over possible IRMs, sorted by status codes:
An IRM contains three important elements that say something about the invoice status (status details). These are:
ResponseCode (for example: 'Accepted' or 'Rejected')
ClarificationReasonCode (for example: does not comply with VAT legislation, reference is missing)
ClarificationActionCode (example: send credit note for full amount)
For more information, please follow this link to learn more.