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Invoicing maturity

Last updated 24 July 2023

Over the past 20 years, the evolution of invoicing between organisations has developed from paper invoicing to Peppol, an open eInvoicing network. Typically, organisations have a combination of different delivery methods. In this assessment, the mix of channels and formats, and proportion of invoices sent via each channel, determine your level of invoicing maturity.

  1. The first generation (1G) of modern invoicing is where businesses are sending paper invoices via post to their buyers.
  2. The second generation (2G) of modern invoicing is where businesses send the invoice to their customer via email as a PDF.
  3. The third generation (3G) of invoicing, that is also referred to as eInvoicing, is where businesses develop system-to-system integrations with suitably sized buyers and customers to send and receive invoice and order data directly via electronic data interchange (EDI). This is also referred to as the 2-corner model where the supplier and buyer are integrated on a one-to-one relationship.
  4. The fourth generation (4G) of invoicing is where system integrators, involved in the implementation of point-to-point EDI integrations for large businesses, build their own closed networks to scale up EDI integrations in a way that suppliers and buyers can integrate easier using the same service provider as opposed to requiring a new 1-1 integration each time.
  5. The fifth generation (5G) of invoicing is where existing procurement systems are enabled for eInvoicing via open networks like Peppol. An open network, with regulated and standardised formats, addresses the issues of fragmented standards, security, reliability, scalability, affordability, adoption, and innovation. Peppol eInvoicing is the most common, interoperable standard for eInvoicing today across the globe.

Most organisations will maintain multiple channels that each fit within different maturity levels – that is, an entity at the 5G level using Peppol may still maintain point-to-point EDI connections (3G) and receive some vendor invoices as PDF via email (2G). Over time, these legacy channels can be migrated to more efficient and mature channels as appropriate. In some cases, it can be beneficial for an entity to skip the 3G and/or 4G levels entirely because open interoperable networks and standards like Peppol can substitute or replace EDI direct connections or networks.

The table below provides a detailed comparison of the relevant features by maturity level, highlighting the potential opportunities and savings that Peppol can unlock for your business.

FEATURE

1G

2G

3G

4G

5G

Data Entry

Manual

Semi-Automated

Automated

Automated

Automated

Accuracy

Low

Low

High

High

High

Data Structure

Unstructured

Semi-Structured

Structured

Structured

Structured

Sustainability

Poor

Good

Good

Good

Great

Risk of Fraud

High

High

Low

Medium

Low

Reach

High

High

Low

Medium

High

Complexity

Low

Low

High

Medium

Medium

Setup Costs

Low

Low

High

Medium

Low

Maintenance Cost

Low

Low

High

Medium

Medium

Risk of losing invoices

High

High

Low

Low

Low

Risk of late payments

High

High

Low

Low

Low

QC73067